LGT routinely routed clients' money through networks of shell companies in the British Virgin Islands, Panama, and Nigeria, Heinrich Kieber told the US Senate's Permanent Subcommittee on Investigations in a videotaped statement. Mr Kieber said he learned about the bank's secretive practices when he worked from 2000 to 2002 on a project to scan LGT documents into computers.

The comments come in a continuing US Congressional probe into how LGT and UBS allegedly helped US citizens to evade US taxes. The affair has put the spotlight on the traditionally secretive banking regimes in the Alpine states and their relations with nations such as the US.

"I began to realize the very questionable business that LGT was often involved in and the dubious clients they were serving,'' said Mr Kieber. In addition to tax evasion, Mr Kieber said the files showed a "strong indication to corruption, links to dictators, or business deals to avoid a US embargo”.

Mr Kieber, a computer technician, sparked a global tax scandal in February after selling confidential bank records on 1,400 accounts to German authorities for as much as €5 million. He testified at a Senate hearing on offshore banking practices by LGT and UBS. Offshore tax evasion deprives the US treasury of $100 billion a year, the committee says.

Mr Kieber gave Senate investigators 12,000 pages of documents, which provided much of the information in a 114-page panel report released last night. 

LGT spokesman Michael Robinson was quoted as saying that the bank questions Mr Kieber's credibility and "strongly rejects any allegations of conducting, or assisting in, illegal activities.'' Mr Kieber stole confidential client data from the bank and has been convicted of fraud in an unrelated case, said Mr Robinson, whose Washington public relations firm represents LGT.