Police raid hundreds in German tax probe

Published on Monday 18 February 2008 21:00

POLICE investigating large-scale tax evasion raided homes and offices across Germany yesterday, and shares in banks in Liechtenstein plummeted on fears that the affair could hurt business there.

The scandal, which threatens to ensnare hundreds of wealthy Germans, came to light when police raided the home of the Deutsche Post chief executive, Klaus Zumwinkel, forcing the firm to announce his resignation.

Police raided homes and offices in Frankfurt, Munich, and Hamburg, sources close to the inquiry said. About 1,000 people were targeted and more than 100 raids were planned for this week.

According to media reports, Germany's intelligence service gave an informant about 4.2 million (3.2 million) for a CD containing data from banks in the Liechtenstein tax haven on more than 1,000 people suspected of tax evasion.

Liechtensteinische Landesbank said it had been blackmailed for years by someone threatening to sell client data.

The Deutsche Steuergewerkschaft tax union said the German state would reap more than 1 billion (750 million) from the probe.

Mr Zumwinkel came under pressure to quit after prosecutors said they suspected him of dodging 1 million (750,000) in taxes.