Tax cheat wins US$10m in damages from bank
A court has ordered a former subsidiary of Liechtenstein's LGT bank to pay over €7.3 million (US$10 million) to a client for failing to inform him that his confidential details had been stolen and handed to authorities, thereby harming his chances of escaping criminal penalties for tax evasion.
Fiduco Treuhand AG, previously known as LGT Treuhand AG, said Monday it would appeal against the decision by the principality's district court ordering it to pay Elmar Schulte compensation for a fine of the same size that he was given in place of prison time by a German court after being found guilty of tax evasion.
Schulte was among hundreds of German citizens exposed as tax cheats when German authorities obtained a CD-ROM containing the names of LGT Treuhand clients more than two years ago.
He was convicted of tax evasion in 2008 by a German court.
The ruling was keenly anticipated, as several other former clients of Fiduco Treuhand are reportedly considering suing the company for failing to inform them early enough that they risked being exposed. Under German law, a person who files an amended tax return before being investigated by tax authorities can escape more severe penalties - such as a prison sentence.
A spokesman for LGT, which will pay the fine on behalf of Fiduco Treuhand if the ruling isn't overturned, said the bank doesn't expect a wave of lawsuits.
"We view this as an exceptional case," said Christof Buri of LGT.
The court rejected three other claims by Schulte that he had received bad counsel by Fiduco.