Fraud accusations: Retail billionaire used Liechtenstein bank account to hide $68m, says US tax inquiry

Fraud accusations: Retail billionaire used Liechtenstein bank account to hide $68m, says US tax inquiry

Lowy, the biggest individual shareholder in listed property firm Westfield, is one of eight individuals named in the investigation into tax evasion, estimated to cost the US $100bn (£50bn) each year.

He refutes the allegations but in a 110-page report released at a Senate investigations committee hearing, Lowy and his three sons are accused of using LGT to hide $68m from tax authorities between 1996 and 2001 via a complex structure of trusts and accounts spanning Delaware in the US, the British Virgin Isles and Liechtenstein.

Senate investigators have accessed dozens of sensitive bank documents and memos which reveal Lowy's account was one of the largest at LGT. Lowy was considered so valuable a client that he was not required to visit Switzerland to sign off instructions. Instead, LGT officials flew out to meet him in London.

Lowy founded Westfield 50 years ago. It is now the world's largest retail property firm. The Czech-born former Reserve Bank of Australia board member is building a shopping centre in Stratford, east London - a major part of the Olympic Park. He successfully persuaded the government to contribute tens of millions of pounds to ensure the mall will be.....continued below

Advertisement starts

Advertisement ends

LGT, the biggest bank in Liechtenstein, is owned by the principality's royal family. In February, it emerged that details of thousands of wealthy account holders were passed to international tax investigators by disgruntled former bank employee Heinrich Kieber. Now in hiding, Kieber will give evidence at the hearing via video.

"It is simply unacceptable that some individuals are using offshore tax havens and secrecy jurisdictions to shelter trillions of dollars from taxation, forcing working families to shoulder the tax burden," said Republican senator Norm Coleman, co-head of the investigation committee.

But Lowy denies he knowingly evaded taxes. In a statement, he said: "The report from the US sub-committee relies on certain documents originally stolen from a Liechtenstein bank. It draws inferences from the documents and states them as facts, without verifying their contents or inquiring into the real facts. Under the Australian tax system the use of Liechtenstein structures to hold assets is not illegal or improper.

"Before publishing the report the US sub-committee failed to give Frank Lowy or his family any meaningful opportunity to be heard or otherwise have the true position stated. This amounts to a denial of natural justice." Lowy said the beneficiaries of the funds were charities in Israel. Others revealed as Liechtenstein account holders include Harvey Greenfield, a US businessman who has donated to senior Democrat and Republican politicians.