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MILAN (Reuters) – Prosecutors have wrapped up a probe into alleged fraudulent diamond selling by some of Italy’s top banks, having investigated high profile executives working for UniCredit (MI:) and Intesa Sanpaolo (MI:), a prosecutor document showed.
The document, seen by Reuters on Wednesday, showed the number of people involved in the probe had risen to 87 from 68 originally under investigation, along with five banks and two diamond brokerages.
In a long-running scandal in a sector already tarnished by controversy, Italy’s biggest banks are suspected of colluding with diamond brokers to scam their own customers.
They are alleged to have sold diamonds at vastly inflated prices while marketing them as sound financial investments.
The wrapping up of a preliminary investigation is usually the final step before prosecutors request a trial. There was no indication from the prosecutors whether a trial would be requested in this case, nor is there any certainty a judge would grant one.
According to the document, notifying the closure of the probe, those under investigation included former UniCredit country chairman for Italy Gabriele Piccini — today a top manager at Intesa Sanpaolo.
UniCredit manager Remo Taricani, head of Sales & Marketing Retail until 2016 and today co-head of the bank’s Commercial Banking Italy division, and Renato Miraglia, Unicredit’s head of Investment Products in Italy until 2016, were also being probed, the document showed.
Lawyers for the three managers, contacted by email, did not comment.
In February prosecutors ordered the seizure of more than 700 million euros ($766 million) in assets from two diamond brokers, Italy’s top lender UniCredit, Banco BPM (MI:) unit Aletti, Intesa Sanpaolo and Monte dei Paschi (MI:).
Prosecutors suspect the banks of fraud and, in some cases, of money-laundering for using the proceeds of diamond sales to boost profits.
Officials from Banco BPM are also suspected of corruption because broker Intermarket Diamond Business (IDB) invested some of its profits from the diamond sales in the banks’ shares, according to evidence gathered by prosecutors.
All the banks involved, with the exception of Banco BPM, started reimbursing clients by re-purchasing the diamonds at the original price.
Banco BPM recognized the difference between the price paid for the diamonds and the fair value of the stones.
Intesa Sanpaolo, Monte dei Paschi and Banco BPM did not comment.
A spokesman for UniCredit said the lender never commented on ongoing proceedings. “We are confident that the competent authorities will recognize the impunity of the Bank and of our colleagues,” he said.
Lawyers representing the two diamond brokers did not reply to a Reuters email requesting comment.
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