Offshore Banking Scandals affecting U.S. citizens resulting in new international Whistleblower Protection laws and exchange of data worldwide

tax havenA whistleblower by the name of Rudolf Elmer claimed that during his work as a private banker and internal auditor for the Swiss financial institution, Julius Baer Bank & Trust Company Ltd., he discovered actions that he found to be deceitful when relocated to the Cayman Islands. When Elmer acted as a whistleblower in this situation, instead of being supported in his efforts, he was fired, removed from the financial world, given time in prison, and even suffered a mental breakdown.

Whistleblower is a legal term that signifies anyone who chooses to report a person or organization for illicit activity. A large portion of whistleblowers are insiders and have directly interacted with the company in question as an employee.

Whistleblowers have the right to take legal action in the government’s name while the government may choose to step in at any point of the process to handle the allegations they find particularly detrimental or unlawful. The United States has a set of laws in place that are designed to protect whistleblowers known as the Whistleblower Protection Act, which has been around for over 30 years with the last major update being in 2012.

Since the 80s, Elmer worked as a private banker for Julius Baer Bank & Trust. During his long and loyal career there, he was given a promotion to internal auditor in 1994. This new position with Julius Baer required him to move from Zurich to the Cayman Islands.

The Cayman Islands has been known by many to act as an offshore tax haven for a large number of big companies that are attempting to use this flexible system as a way to keep their finances secure and as lucrative for themselves as possible. The islands carry a dark history in financial mishandling, excessive loopholes, and shadowy banking. It took these islands until 2015 to introduce whistleblower protection laws to assure security for those who desire to uphold the law without major consequences. However, the introduction of whistleblower protection to the islands came too late for Elmer’s claims, and so he was dealt many penalties.

Elmer’s first punishment started in 2002 when he was asked to take a “routine” lie-detector test, which he later claimed was unlawful. He failed this test and was fired abruptly without any compensation such as severance pay. This was just the start to a series involving treats, claims, and arrests that would lead to Elmer’s whistleblowing predicament.

‘‘They threatened that if I take the bank to court, they’re going to finish me off: a clear message,’’, Elmer states in reference to his former employers when recounting the situation once he returned to Switzerland. Elmer also stated that he and his family felt terrorized by those associated with his former bank after he was fired.

Elmer decided the best course of action was to send the Swiss tax authorities confidential data he had on back-up in hopes that would be enough to raise some concern. This instead lead to him being arrested in 2005 and held for 30-days for breaching the confidentiality laws by leaking this information.

Two years following these events, this situation progressed to him threatening to make the data public. Allegations then claimed that those still with the former employer set out to discredit Elmer and remove him from his current position. He was fired from his new employer and failed to gain entrance into any other job in his field.

He then in 2011 sent CDs to WikiLeaks’ Julian Assange, who has his own story within the world of whistleblowing, with alleged names of countless important figures who were implicated in unlawful financial handlings. Elmer was, once again, arrested for this, and spent 220 days in solitary confinement.

‘‘The disks were empty…I’m not that stupid to hand over CDs publicly when the UK police is next door,’,’ Elmer explains.

Elmer has made it clear through reports that he has a major moral issue with the Swiss judicial system when it comes to protecting whistleblowers such as himself and Assange. There are countless examples of the flaws in the Swiss system that go beyond Elmer’s punishments, including HSBC paying French prosecutors 300 million euros to end a probe, and the refusal of Spain to extradite someone to them on unlawful charges of ‘aggravated financial espionage.’

Elmer states, “Has justice been served? In my case, justice no, on the contrary, life is punished.’’ While many have suffered worse, Elmer’s punishment of arrest and professional suicide for revealing illegal information is still a difficult blow to handle, and is the main reason creating, updating, and upholding whistleblower law is essential for maintaining order in a society where corporations are fueled by greed.

Those who are interested in gaining more information about situations like this and whistleblower law can find more details at Jeffrey Newman Law!