* Assange says Swiss should probe alleged tax fraud

* Arrest puts Swiss banking in spotlight

In an interview published in the Swiss weekly Der Sonntag, Julian Assange, whose website has angered Washington by releasing confidential U.S. diplomatic cables, said Switzerland’s actions were drawing renewed international attention to its controversial banking practices.

On Friday the Swiss prosecutor’s office said former banker Rudolf Elmer would be detained over the weekend after police questioned him about breaking Swiss banking secrecy laws. A judge will decide on Monday whether to remand him for longer.

Police took Elmer into custody on Jan. 19 after he handed computer discs to Assange for WikiLeaks at a news conference in London earlier in the week. Elmer indicated the CDs contained details of as many as 2,000 offshore bank accounts. [ID:nLDE70G1FU]

“Mr. Elmer is in prison because he has revealed a criminal offshore system of tax evasion in which Swiss banks play a leading role,” Assange was quoted as saying in an interview.

“Instead of investigating these offshore structures and going after the tax evaders, the authorities are going after Mr. Elmer,” he said.

The newspaper, quoting Assange in German, said it had received his comments via a WikiLeaks intermediary.

In a separate case, Elmer was also convicted on Jan. 19 of breaching banking secrecy by passing on private client data to the tax authorities and of threatening employees at his former firm Julius Baer BAER.VX. [ID:nLDE70J1RI]

Elmer has appealed against this verdict.

Swiss media have speculated that the data Elmer handed to WikiLeaks on Wednesday concerned Julius Baer operations in the Cayman Islands, where Elmer had headed its operations, and are therefore not covered by laws protecting Swiss banking secrecy.

Switzerland’s bank secrecy helped it build a $2 trillion wealth management industry but the laws have come under intense global attack in recent years, with neighbouring Germany buying secret data from informants to track down tax evaders.

“Elmer’s arrest makes it more urgent to examine his banking data and publish them as soon as possible,” Assange said.

“Switzerland is putting itself into the spotlight with its actions,” he said.

Assange said Switzerland was not the only country involved in the offshore banking structures that were depriving tax authorities worldwide of some $22 billion.

Assange himself is under a form of modified house arrest in England, awaiting an extradition hearing to Sweden for questioning over alleged sex offences that he denies.

WikiLeaks has previously said it plans to release documents relating to a major U.S. bank, believed to be Bank of America BAC.N. (Editing by Tim Pearce)