A whistle-blower responsible for uncovering one of the biggest cases of tax avoidance in Germany is now prosecuted by Swiss authorities for industrial espionage, the daily financial newspaper Handelsblatt reported on Monday.
Echart Seith is a lawyer that contributed to uncovering a Swiss bank mechanism that deprived German taxpayer of €12bn. Seith testified on how Swiss banks advised customers to buy shares in a company on borrowed money just before it pays out a dividend, selling it shortly afterwards, and recovering losses and making a profit due to a series of tax exemptions.
The 61-year old Seith has now been charged with industrial espionage e and his case goes to trial on March 26. If found guilty, he is facing three-and-a-half years in prison. His testimony closed the tax loophole exploited by the Swiss banking industry in 2011.
The testimony has exposed the Swiss industry to litigation in Cologne, Munich, Stuttgart, Frankfurt and Düsseldorf, where Swiss bank customers made a profit at the expense of the German taxpayer. As part of the ensuing investigation in Germany and Switzerland, there have been hundreds of arrests in Germany and other jurisdictions.
The question at hand is how Seith got internal bank documents that allowed him to make the case against the Swiss banking system. In 2013, the Swiss bank J. Safra Sarasin filed a criminal complaint to Swiss authorities, alleging espionage, which led to the arrest of one of the bank’s employees, the customer adviser Bernhard V., accused of leaking internal company documents. He is to face the stand with Echard Seith.