Many wealthy taxpayers might have dodged a bullet following the IRS settlement agreements with UBS and Deutsche Bank… but they might be getting their day in the press after all courtesy of WikiLeaks. Rudolf Elmer, a whistleblower, has reportedly turned over the banking details of about 2,000 “high net worth individuals” and corporations to Julian Assange and the WikiLeaks team. Said to be included in the list of Americans, Brits, Germans, Austrians and other internationals, are about forty politicians – no names have yet been mentioned publicly.
Elmer is a Swiss citizen and former banker at Julius Baer, a Swiss private bank with origins dating to 1890. According to Julius Baer’s web site, the bank employs over 3500 in more than 40 locations, including Zurich, Dubai, Frankfurt, Geneva, Hong Kong, London, Lugano, Milan, Monaco, Montevideo, Moscow and Singapore. Elmer used to count himself as one of those mployed by the bank; he was the Chief Operating Office of their branches in the Caribbean until he was fired in 2002.
Elmer turned over the information to WikiLeaks earlier this year, just before his return to Switzerland. Elmer had previously been in exile in Mauritius, an island nation off the southeast coast of Africa. Upon his return to Switzerland, he will face charges of breaking Swiss bank secrecy laws, forging documents and sending threatening messages to bank officials. Elmer claims, through his attorney, that he is not guilty. Specifically, his attorney noted that much of the information Elmer is accused of providing is from the Cayman Islands – and not Switzerland – thus making the claims of breaking Swiss secrecy laws invalid.
When asked about his motives, Elmer claims that release of information is being done “in order to educate society” about those “using secrecy as a screen to hide behind in order to avoid paying tax.” He further claims that his time at the bank made him realize how pervasive fraud – especially for purposes of committing tax evasion – is and wants to hold those who are committing financial crimes accountable. His lawyer has indicated that Elmer had previously approached Swiss and other government officials who refused to act on the information.
Julius Baer, of course, rejects the allegations that it has assisted any taxpayers in the commission of tax fraud.
Reportedly, the names on the list won’t all be made public. Assange has promised to vet the list first before releasing any information. That has to be worrying for those who hold accounts at Julius Baer. While the IRS has reportedly drawn the line at buying the names of tax evaders (rumor has it that the UBS list was shopped around to UK and US tax officials), I’m not so sure that it wouldn’t balk at taking a peek if the information were made available to them for free.
Of course, just being on a list isn’t such a bad thing. Simply having an offshore account isn’t a crime for US taxpayers. But failing to report income or file timely informational returns (like FBAR returns) can be a crime or, at the least, subject the taxpayer to hefty penalties.
I checked the Wikileaks site today and there aren’t any names from the most recent leak. But there are quite a number of documents including a list of account holders (and related documentation) which was released previously. I’ve seen them and they’re pretty detailed – trust documents, distribution notes and the like. That certainly has to be give Julius Baer account holders pause.
So now the taxpayers need to be more careful from the WikiLeaks team rather than the IRS. The Switzerland citizen and banker of Julius Baer, Mr. Elmer has actually made a very large number of people in trouble now. People need to be more careful with their filing of returns and reporting the actual incomes now!