UPDATE 2-Credit Suisse clients, staff face German tax probe

* Credit Suisse staff probed for aiding alleged tax evasion

* Prosecutors launch probes into 1,100 customers

* Credit Suisse shares down 0.36 pct, lagging sector .SX7P

(Adds background, Credit Suisse comment)

DUESSELDORF, Germany, March 19 (Reuters) - German prosecutors have launched 1,100 tax evasion probes against clients of Swiss bank Credit Suisse (CSGN.VX) and are investigating bank staff on suspicion of aiding evasion, authorities in Duesseldorf said on Friday.

"Unfortunately we cannot comment on this at the moment," a Credit Suisse spokesman said.

The probe, first reported by the Frankfurter Rundschau newspaper, is related to a CD with client data offered to the German state of North Rhine-Westphalia.

Tax authorities are going after some 400 million euros ($544.5 million) worth of undeclared taxes and have compiled 1,100 cases involving suspected evaders, Sueddeutsche Zeitung said in an advance copy of its Saturday edition.

The suspects are from Bavaria, Baden Wuerttemberg, Hessen, Rhineland Palatinate and North Rhine-Westphalia, Sueddeutsche said.

Prosecutors will also investigate bankers on suspicion of "systematically aiding" clients to avoid taxes, it said.

Investigators searched the property of Credit Suisse clients in Baden-Wuertemmberg in the past few days, Sueddeutsche said.

Ignoring protests from Switzerland, Germany has said it would pay 2.5 million euros for the stolen data said to have details about some 1,500 tax evaders that could, according to media reports, yield at least 400 million euros in tax revenues. [ID:nLDE61M05Z]

Media coverage of looming action against tax evaders whose names may be on the data has prompted many to come clean.

Across Germany more than 10,000 people have confessed evading taxes to state authorities, Sueddeutsche said.

Under German law those who report undeclared income themselves and pay back tax plus interest owed before an investigation is started are exempt from prosecution.

Swiss private bankers said attacks on the country's treasured bank secrecy law turned 2009 into an "annus horribilis" and 2010 doesn't look much better as international offensives on its multi-trillion-dollar wealth management industry continue. [ID:nLDE6110ZM]

The Swiss government is trying to rescue a deal brokered between UBS (UBSN.VX) and the U.S. to hand over client data to end a legal case that has damaged the banking giant's reputation, prompting clients to pull billions of Swiss francs from accounts.

HSBC's (HSBA.L) Swiss private banking operations have also fell foul of a data thief. Europe's biggest bank admitted last week that a former employee had taken details of up to 24,000 client accounts, which wound up in the hands of authorities in France, where the ex-worker fled. [ID:nN12126018]

In 2008, Germany paid for stolen data from Liechtenstein's top bank LGT. Former Deutsche Post chief Klaus Zumwinkel's Liechtenstein trust was uncovered in that data and he admitted to tax evasion in a spectacular case.

Germany's willingness to buy stolen bank data once again has shaken Switzerland's large private banking industry and stirred emotions in both countries. Germans hold an estimated 200 billion euros in undeclared funds in Switzerland.

(Reporting by Matthias Inverardi in Duesseldorf and Jason Rhodes in Zurich; writing by Edward Taylor; editing by Sharon Lindores) ($1=.7346 Euro)