Ottawa takes flak over tax scandal

September 2, 2008 by Dan White.

Ottawa takes flak over tax scandal

No action taken on stolen account information

John Greenwood, Financial Post  Published: Tuesday, September 02, 2008

The lawyer for the man who touched off an international scandal after he stole information about account holders at a secretive Liechtenstein bank and sold it around the world has criticized Ottawa for failing to take action on information it received about 100 Canadians on the list.

“What I’m appalled about is that nothing has happened in Canada,” said Jack Blum, a Washington-based lawyer, speaking in a telephone interview. “There’s been no sign of any action or activity [by Canada Revenue Agency] and I don’t know why.”

Mr. Blum’s client, Heinrich Kieber, is reportedly living in a witness-protection program in an unidentified country after receiving death threats.

Earlier this year, Mr. Kieber made headlines after he sold data on more than 1,400 clients of LGT Group, a secretive tax-shelter bank owned by members of the Liechtenstein royal family, to authorities in Germany, the U. K., the United States and several other countries. The Canada Revenue Agency confirmed in February it had received information on about 100 Canadian account holders and was looking into the matter.

But in the six months since then, no action has been taken and the agency has been silent on the matter.

A spokeswoman for the Canada Revenue Agency said on Friday the inquiry is ongoing.

“There is no new information,” said Beatrice Fenelon.

The incident touched off a major political row in Germany, sparking the resignation of several high-ranking officials, including the head of the country’s post office, who were found to have been sheltering millions of euros in Liechtenstein.

In Italy, the names of Italians on the list were released to the media.

Meanwhile, in the United States the matter was investigated by a subcommittee of the U. S. Senate, which found among other things that wealthy Americans — several of whom were asked to give testimony — were using offshore banks such as LGT to avoid paying US$100-billion a year in taxes.

Swiss bank UBS AG was also implicated following testimony it was marketing tax-avoidance services to wealthy clients in the both the United States and Canada.

Rocked by fallout from the case, UBS announced in July that it was halting its offshore banking services for U. S. citizens.

“Tax havens are engaged in economic warfare against the United States, and the honest, hardworking American taxpayer is losing,” said Carl Levin, the Michigan senator who spearheaded the investigation.

As a result of the revelations from the Senate probe, the U. S. government is expected to end up with significant tax revenue that it wouldn’t otherwise have had.

However, there is little evidence Canadian tax officials are paying attention.

For instance, despite evidence that tax shelter banks are pursuing Canadians as well as Americans, Ottawa has yet to pick up the ball by launching an investigation of its own.

“Why hasn’t somebody in Canada held the banks’ feet to the fire and said, ‘What the hell are you doing here looking for customers?’ ” said Mr. Blum. “The question is, where is the political will to deal with it. What has your Parliament done? Has anybody raised these issues there?”

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 Dan’s notes; Makes you wonder EXACTLY WHO is on the list of Canadians…. anyone from CRA? Anyone from the Canadian Government, anyone who does not want this to be public.

This is another reason that people will avoid using the US Dollar.

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