Credit Suisse clients and staff face tax probe

German prosecutors said Friday they were investigating around 1,100 customers and staff of Swiss bank Credit Suisse's local operations on suspicion of hiding money from German tax authorities.

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"The Credit Suisse clients have investments in total of around €1.2 billion ($1.6 billion)," Dirk Negenborn, spokesman for prosecutors in Düsseldorf told the news agency AFP.

He said the total amount of tax owed was unclear. According to several sources, the Credit Suisse information should allow German tax authorities to recover up to €400 million.

The probe stems from a CD with confidential banking data sold to the German state of North Rhine-Westphalia, Germany's most populous state, the Frankfurter Rundschau newspaper reported.

In February, the state bought stolen information on 1,500 suspected German tax cheats holding bank accounts in Switzerland.

German press reports have said the state shelled out €2.5 million for the CD. The federal government of Chancellor Angela Merkel in early February gave the green light for North Rhine-Westphalia to buy the Swiss CD.

The Süddeutsche Zeitung daily reported in its Saturday edition that over 10,000 people have surrendered to authorities since the purchase. The decision prompted a high-profile debate in Germany about paying for illicit data as well as a souring of its relations with its Alpine neighbour Switzerland.

In 2008, a similar deal netted a long list of names and bank accounts in the principality of Liechtenstein which let officials recover around €200 million in unpaid taxes and led to the arrest of the head of the logistics group Deutsche Post. That episode put Liechtenstein and other tax havens including Switzerland in the firing line of international efforts against offshore banking havens and tax dodgers.

Fellow Swiss banking giant UBS has found itself in hot water for allegedly helping rich Americans hide money from the taxman.

In a state-brokered settlement in August 2009, UBS warded off a bruising US government lawsuit by agreeing to hand over secret details on about 4,450 clients and US taxpayers.