Two partners from Skadden, Arps, Slate, Meagher & Flom are among the lawyers whose clients are scheduled to appear Thursday before a Senate subcommittee investigating whether and how some of America's wealthiest citizens hide billions of taxable income in illegal shelters abroad.
The hearing stems from a U.S. Department of Justice investigation of Swiss banking giant UBS and a royal bank in Liechtenstein that allegedly have helped U.S. citizens hide taxable income for years. As part of its investigation, the government is seeking the names of thousands of U.S. citizens who may have cheated the IRS.
A group of those citizens are scheduled to appear Thursday before the Senate's Permanent Subcommittee on Investigations, chaired by Carl Levin, D-Mich. The hearing starts just hours after the subcommittee released a report Wednesday night detailing its investigation and the evidence against the individuals it has called to testify.
They include Peter Lowy, of Beverly Hills, Calif., whose family controls Westfield Group, an Australian shopping mall developer. Skadden partner and former federal prosecutor Robert Bennett is representing Lowy. Bennett's colleague, Skadden partner David Zornow, is representing the witness who holds perhaps the most damning information: Martin Liechti, head of UBS's Wealth Management Americas group.
Zornow declined to comment on the hearing. Bennett says Lowy's appearance will be rescheduled for July 25 since his client is out of the country; he add that Lowy has done "nothing improper."
The agenda will include testimony from Steven Greenfield, whose family owns Commonwealth, a toy company based in Manhattan; Shannon Marsh, the Fort Lauderdale, Fla. heir to a sizable family fortune; and William Wu, a wealthy Chinese businessman based in Queens, New York.
Greenfield and his father, Harvey, did not return calls or e-mails seeking comment or the names of their legal advisors; Wu could not be reached.
Baker & McKenzie has represented the Marsh family in the past, but a firm spokeswoman says they are not representing Shannon Marsh at Thursday's hearing. Instead, Marsh has turned to lawyers from Miami's Bierman, Shohat, Loewy & Klein, including name partner Edward Shohat. Shohat did not return calls and e-mails seeking comment.
His partner, Sharon Kegerreis, says Marsh will invoke his Fifth Amendment right when questioned Thursday. She says Marsh is cooperating with the IRS and has already repaid $2.9 million in back taxes linked to accounts his father, James, set up in Liechtenstein.
The tax evasion investigation blew open when Heinrich Kieber, a former employee of LGT Group, a bank in Liechtenstein with prominent foreign clients, turned over reams of account data to authorities here and in Europe. Federal investigators have also extracted evidence from former UBS banker Bradley Birkenfeld, who pleaded guilty last month to helping U.S. clients evade tax laws. He apparently told prosecutors the Swiss bank holds about $20 billion for U.S. clients in undeclared accounts.