Tax Fraud Conviction

Zumwinkel, 65, confessed last week to using a Liechtenstein bank to evade 966,000 euros ($1.2 million) in taxes. On Monday, Jan. 26, a court found him guilty and handed down a two year suspended sentence and a fine of just under 1 million euros.

Zumwinkel's arrest for tax evasion in 2008 sent shockwaves through Germany's close-knit business world. Authorities made an example of Zumwinkel, leading him out of his posh villa near Cologne as television cameras rolled.

Arrest rattled German tax scofflaws

Zumwinkel was one of hundreds of wealthy Germans executives, sports stars and entertainers exposed when a Liechtenstein bank employee betrayed them by selling a stolen DVD with details of their accounts to Germany's foreign intelligence service (BND).

Since then, German prosecutors have recovered more than 150 million euros ($194 million) from taxpayers hoping to avoid being taken to trial. German tax authorities believe that more than 4 billion euros was being hidden in Liechtenstein.

Prosecutors said Zumwinkel concealed money in trust funds managed by the LTG Bank in Liechtenstein. He set up a trust fund for himself in Liechtenstein in 1986 with money he inherited, but failed to disclose earnings and dividends from it to German tax authorities, as required by law.

Zumwinkel fell hard

Released on bail after a search of his villa, Zumwinkel resigned shortly afterwards as head of Deutsche Post, one of the world's leading logistics companies with a global workforce of more than 350,000. Later, he stepped down from positions on the boards of other leading German companies such as Deutsche Telekom, Lufthansa and retailer Arcandor.

Zumwinkel, named Manager Magazine's 2003 "Executive of the Year" for his work at transforming Deutsche Post from a bloated state monopoly into one of the world's largest logistics companies, admitted that he had made the "biggest mistake of my life."

"I am not going to beat around the bush: I am guilty of what I am accused of," Zumwinkel told the court on the trial's first day. "My career had a bitter end. My job was my life."

Zumwinkel barely avoided jail. In December, the Federal Court of Justice ruled that tax crimes of more than 1 million euros would automatically land an offender in jail. Zumwinkel was originally accused of hiding 1.2 million euros, but the court in Bochum announced it would only bring charges on activities since 2002, meaning the sum involved came in just under the one-million euro mark.

Liechtenstein under scrutiny

Germany reportedly paid 4.5 million euros for the DVD. The brouhaha also caused Britain and the United States to launch their own investigations. It also brought Liechtenstein and other tax havens under heavy international criticism.

German Finance Minister Peer Steinbrueck vowed to "to put the screws" on Liechtenstein, while Chancellor Angela Merkel threatened to isolate it from the rest of Europe unless it cooperated on ending banking secrecy.

Liechtenstein is considered an "un-cooperative tax haven" by the Organization for Economic Cooperation and Development (OECD).