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European tax scandal reaches U.S.

BERLIN, Feb. 27 (UPI) -- Dozens of Germans have confessed to massive tax fraud via Lichtenstein as the affair widens to other countries, including the United States.

Besides Washington, the governments of Australia, Britain and France have announced they are checking whether their citizens were involved in the tax scandal, which got under way when Germany last week arrested Deutsche Post head Klaus Zumwinkel on charges that he funneled large sums of money to a Lichtenstein bank.

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Germany, with the help of its spy agency, the Federal Intelligence Service, or BND, had paid a secret informant some $7.3 million in exchange for a CD containing incriminating data on hundreds of rich Germans who transferred several hundred millions of dollars to nearby Lichtenstein to avoid taxes.

Berlin has since said it would make the CD, which apparently also includes foreign nationals, available to other governments free of charge.

Prosecutors in the western city of Bochum, who are leading the probe, said 72 individuals have since confessed to tax fraud, with dozens of millions in back payments. Employees at three German banks are also under investigation, officials said.

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On Tuesday, U.S. officials said they were investigating more than 100 American citizens for tax fraud via Liechtenstein bank accounts.

"Combating off-shore tax avoidance and evasion are high priorities for the IRS," Linda Stiff, the Internal Revenue Service's acting commissioner, said in a statement on Tuesday. "It should be clear from recent events that there is no safe hiding place for the proceeds of tax avoidance and evasion."

Australia is probing 20 citizens, while France said it had received a list of "several hundred" people suspected of having evaded taxes via Lichtenstein.

Switzerland and Luxembourg, two major European nations with protectionist bank secrecy laws, have denied being involved in the scandal.

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