Humpty Dumpty has a great fall

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Vorig jaar werden documenten onthuld via internet, gevolgd door veel
gegrom van Julius Baer. Daarna werd het stil.

Nu gaat het weer verder, en kennelijk op een manier die niet meer te
stoppen is.

Groet / Cees

Swiss Banker Blows Whistle on Tax Evasion
http://www.nytimes.com/2010/01/19/business/19whistle.html
By LYNNLEY BROWNING
Published: January 18, 2010

 From his home in the quiet village of Rorbas, outside Zurich, Rudolf M.
Elmer is chipping away at the centuries-old traditions of Swiss banking
secrecy.

Mr. Elmer, who ran the Caribbean operations of the Swiss bank Julius
Baer for eight years until he was dismissed in 2002, moved to Mauritius
in the Indian Ocean and began parceling out to global tax authorities
what he said were the secrets of his former employer.

Now back in his native country, he continues to disclose the inner
workings of Julius Baer — one of many Swiss institutions that
investigators say help clients evade billions of dollars in taxes by
routing money through offshore havens in the Caribbean and Switzerland.

“It is a global problem, and I am only the messenger who provides the
bad news, or even better, the truth,” Mr. Elmer, 54, wrote in a recent
e-mail message. “Offshore tax evasion is the biggest theft among
societies and neighbor states in this world.”

He said that he would fly on Tuesday to Düsseldorf, Germany, where the
tax authorities are putting him up in a five-star hotel as he prepares
to divulge client secrets.

Mr. Elmer joins a group of whistle-blowers that includes Bradley
Birkenfeld, the former UBS private banker who disclosed the bank’s
secrets, pushing it toward a settlement with the United States
government, and Heinrich Kieber, a former data clerk at the LGT Group,
the Liechtenstein royal bank, who stole client data and funneled it to
American and European authorities.

Mr. Elmer’s disclosures are attracting particular interest as the
Internal Revenue Service and the Justice Department embark upon a
strategy of “it takes a rogue to catch a thief” to encourage insiders
who engaged in wrongdoing to reveal the secrets of their employers.

Lawyers and Congressional investigators who have begun to review Mr.
Elmer’s claims say that his internal bank and client documents provide
fresh ammunition for American authorities as they take their crackdown
on offshore tax evasion beyond UBS to clients of other banks.

Mr. Elmer has given documents to the I.R.S., a Senate subcommittee
investigating tax evasion and investigators for Robert M. Morgenthau,
then the Manhattan district attorney, his lawyer Jack Blum said. They
cover more than 100 trusts, dozens of companies and hedge funds and more
than 1,300 individuals, from 1997 through 2002, Mr. Blum said.

Mr. Elmer contends that his documents detail the undisclosed role of
American investment management companies in funneling American, European
and South American clients who wished to avoid taxes to Julius Baer; the
backdating of documents to establish trusts and foundations used to
evade taxes; and the funneling of trades for hedge funds and private
equity firms from high-tax jurisdictions through Baer entities in the
Cayman Islands.

“What he has is the confirmation of something very important: that a
number of other banks in the voluntary disclosure process are turning
up,” Mr. Blum said, referring to 14,700 wealthy Americans, many of them
UBS clients, who came forward to disclose their secret accounts last
year. The I.R.S. declined to comment on Mr. Elmer’s case but said in a
statement that it was “investigating other banks that have enabled
Americans to evade taxes.”

Nothing indicates that Julius Baer, a 120-year-old private bank, is
under I.R.S. investigation. The bank is known for intense privacy. Its
board chairman, Raymond J. Baer, told shareholders last April that “the
fiction of citizens being fully transparent must never become reality.”

Julius Baer, based in Zurich, had profits of more than $245 million in
the first half of 2009 on more than $200 billion in client assets. In
2004, it sold its American wealth management business to UBS, whose
offshore private banking operations for Americans came under federal
scrutiny and led the bank to pay a $780 million fine in 2009 and admit
to criminal wrongdoing. The acquired business was folded into a group
led by Raoul Weil, the top UBS private banker who fled to Switzerland in
2009, after being indicted in the UBS case touched off by Mr. Birkenfeld.

Mr. Elmer worked for Julius Baer nearly two decades, the first 15 years
in Switzerland and then as chief operating officer of Julius Baer Bank
and Trust in Grand Cayman, beginning in 1994. As far as his own role in
helping clients evade taxes, he said, “I didn’t realize what was going
on.” Mr. Elmer said he discovered the tax evasion in 2002 and decided to
expose Julius Baer’s operations.

Julius Baer denies that version of events. It contends that Mr. Elmer
stole internal documents and client data around 2002, the year he was
dismissed after raising concerns about the bank in the wake of being
passed over for a promotion. He moved to Mauritius a year later.

“Shortly after leaving the employment of the Julius Baer Group in 2002,
Cayman-based Elmer, clearly annoyed at having been dismissed and unable
to secure a financial settlement to his satisfaction, engaged in a
campaign to seek to discredit the Julius Baer group and certain of its
clients,” the bank wrote by e-mail in December.

“This campaign has included threats against individuals and the use of
documents inappropriately obtained and/or retained by Elmer following
the termination of his employment, many of which were altered to create
a distorted fact pattern or supplemented by forged documents, the
creation of which Elmer has since admitted,” the bank wrote.

Swiss authorities, who briefly held Mr. Elmer in jail in 2005 on charges
of breaching Swiss bank secrecy laws, are investigating whether he stole
the documents.

In 2008, Mr. Elmer posted some of his documents on Wikileaks, a Web site
that publishes whistle-blower information about government and corporate
activity. In court papers the bank filed in February of that year,
seeking unsuccessfully to prevent the disclosure of the records, the
bank revealed the names of certain clients that Mr. Elmer had accused of
tax evasion. They include Jonathan Lampitt, the president and chief
executive of the Jupiter Investment Group, in Rancho Santa Fe, Calif.;
Winston B. Layne, a wealthy resident of New York; and Anna Kanellakis,
an owner of a shipping company, Alpha Tankers and Freighters, based in
Athens. A spokesman for Mr. Lampitt did not respond to requests for
comment. Messages left at Mr. Layne’s Upper East Side home were not
answered. A spokesman for Alpha Tankers said that it knew nothing about
accounts at Julius Baer.

Elements of the dispute between Mr. Elmer and Julius Baer resemble a spy
thriller. He said that Julius Baer had him followed by private
investigators in Zurich and that superiors told him “it might be a good
idea to go for a deep dive in the sea” — assertions that the bank denies.

The bank said it suspected Mr. Elmer of having mailed a suspicious white
powder to its offices, which he denies. It also said that he forged a
2007 document on Julius Baer letterhead notifying Chancellor Angela
Merkel of Germany that the bank was closing her accounts because they
“hid funds in offshore accounts.” Mr. Elmer says the letter, which he
has posted on Wikileaks, is authentic.

His actions are “symptomatic of a generalized breakdown of bank
secrecy,” said Christopher S. Rizek, a tax lawyer at Caplin & Drysdale
in Washington who has represented scores of wealthy American clients of
Swiss banks.

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