woensdag 20 augustus 2008

Banking Scandal Unfolds Like a Thriller

August 15, 2008

By LYNNLEY BROWNING

In 2004, Heinrich Kieber told a Viennese criminal psychologist that he no longer held the keys to the kingdom of Liechtenstein, one of the world’s leading purveyors of a shadowy private banking services to the wealthy.

But Mr. Kieber’s promise — that he had returned all of the confidential client data he had stolen in 2002 from LGT Group, the financial fortress owned by the Liechtenstein royal family — was not true.

“At the time, we all trusted him,” said Wolfgang Mueller, his lawyer in Vaduz, the capital of Liechtenstein, at the time, whose fees were paid by a worried LGT. “But he made a copy.”

Mr. Kieber, who is in hiding after selling copies to several foreign governments, is now wanted by Interpol. A former data entry clerk at LGT, he has spawned one of the biggest private banking scandals in years.

Nearly a dozen global tax authorities, including the Internal Revenue Service, are now using the treasure trove to ramp up their scrutiny of former LGT clients.

But the Kieber affair is not just peeling back layers of banking secrecy and exposing a tiny Alpine country blacklisted by the Organization for Economic Cooperation and Development as a money-laundering haven.

It has also brought to light a group of characters worthy of a spy thriller.

The widening investigations threaten to bring to light more LGT client names, including those of convicted felons and foreign officials, as well as the roles of other banks and their United States-based employees, according to a person briefed on the matter.

Mr. Kieber’s treasure trove, which he sold secretly to authorities in Germany, Britain and the United States, details billions of dollars in tax evasion by 1,400 LGT clients, 150 of them American, according to officials who have seen the documents.

“He’s hunted, he’s wanted — this is not what I would call living the good life,” said Jack A. Blum, Mr. Kieber’s lawyer.

Mr. Blum said he “has no idea” where Mr. Kieber was or what country had put him in what he said was a witness protection program. “I know when I should dial down and not ask,” Mr. Blum said.

His client, Mr. Blum said, “is not a criminal. He was bothered by what he saw at the bank.”

Mr. Blum declined to say how Mr. Kieber had come to him as a client, adding that Mr. Kieber hoped to reap a monetary reward under the I.R.S.’s new whistle-blower program. He said all communication with Mr. Kieber was “being blocked by the government,” though he declined to say which one.

All that baffles Robert Wallner, the chief prosecutor in Liechtenstein, who said he was “somewhat puzzled that he is now considered a whistle-blower.”

In spy-thriller fashion, Mr. Kieber’s data theft was linked to a Spanish real estate deal gone awry.

Mr. Wallner said his office charged Mr. Kieber in November 2002 with fraud after he bought an apartment in Barcelona in 1996 owned by a German business executive and paid for it with a check for the equivalent of about $250,000 that bounced.

That same year, Mr. Wallner said, Mr. Kieber told him “a dramatic story” in which he met what Mr. Wallner called the unnamed “German victims of the Spanish fraud” — referring to the bounced check — at a ranch in Argentina. Mr. Kieber complained that the Germans had held him captive and tortured him.

While Mr. Wallner said his office believed that Mr. Kieber had indeed met some Germans in Argentina, it could not determine whether the allegations of mistreatment were true.

Mr. Kieber was upset that the authorities did not believe his story. In January 2003, Mr. Wallner said, Mr. Kieber sent a four-page blackmail letter and audio cassette to Hans-Adam II, the ruling monarch of Liechtenstein, and his son, Crown Prince Alois, complaining of unjust prosecution over the Spanish deal.

In the letter, Mr. Kieber revealed for the first time that he had copies of LGT client data, and threatened to make them public unless Liechtenstein gave him new passports and a new identity, and dropped the Spanish fraud charges. The prosecutor refused, and indicted Mr. Kieber on data theft charges in February.

“Is he motivated by revenge?” Mr. Blum wondered. “Possibly, but I don’t want to psychologize.”

Mr. Kieber’s data trove has already claimed several victims. Last month, the investigation by United States authorities exposed a top LGT client, Peter Lowy, a billionaire Australian real estate magnate on suspected tax evasion. In February, German tax authorities used Mr. Kieber’s data to raid the home of Klaus Zumwinkel, a corporate pillar who is the former chief of Germany’s postal system.

In recent months, Mr. Kieber made a videotape, face darkened, for investigators for a United States Senate subcommittee. He described LGT’s inner workings and hinted of other global clients, including an unnamed “head of a social government department” in “a third world country” with $5 million in income from unexplained sources.

But a spokesman for LGT said of Mr. Kieber that “no matter how you slice it, he’s a thief.” Referring to the whistle-blower in the Enron case, he added, “We’re not talking about a Sherron Watkins here.”

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