Company News
April 6, 202111:17 AMUpdated 5 days ago
EXCLUSIVE-Italy prosecutors seek mass trial in diamond fraud probe
By Emilio Parodi
"MILAN, April 6 (Reuters) - Milan prosecutors have asked for four Italian banks, diamond broker IDB and 105 individuals to be sent to trial in a probe into alleged fraudulent diamond sales, two sources with direct knowledge of the case said on Tuesday.
In a long-running scandal, Banco BPM and its subsidiary Banca Aletti, UniCredit and Monte dei Paschi (MPS) are accused of colluding with diamond brokers to scam their own customers, the sources told Reuters on condition of anonymity.
They are alleged to have sold diamonds to unwitting clients at vastly inflated prices while marketing them as sound financial investments.
Banco BPM, UniCredit and MPS all declined to comment. A lawyer for IDB did not immediately reply to a request for comment.
A fifth bank, Italy’s number one lender Intesa Sanpaolo , has agreed a settlement with prosecutors to close its case, the sources said. Diamond brokerage DPI also reached a settlement deal to avoid possible trial.
Intesa had no comment. A lawyer for IDB did not immediately reply to a request for comment.
According to the prosecutors’ indictment request, the five banks and two brokers are suspected of having made inflated profits of around 500 million euros ($590 million) until 2016, leaving savers out of pocket.
From 2017, all the banks involved started reimbursing clients. Intesa, UniCredit and MPS have bought back the diamonds from customers at the original selling price.
Banco BPM instead has paid back the difference between the price clients paid for the diamonds and their fair market value.
Under the terms of its settlement, Intesa Sanpaolo has agreed to pay a 100,000 euro fine and hand over an additional 61,000 euros, which was the profit it made from the alleged offence, the sources said.
They said the second diamond brokerage firm, DPI, agreed to pay a 34,000 euro fine and hand back 88 million euros in alleged profit. A judge must still ratify these settlements.
Plea bargains in criminal cases in Italy do not involve any admission of guilt or responsibility.
Under Italian law, companies in this case are only criminally liable for alleged money laundering, while the individuals face a wider range of possible charges.
The 105 defendants are former executives, officials and employees from the five banks and the two brokerage firms.
They face charges of fraud and bribery. In the case of Banco BPM and one of its former managers, there is also a charge of obstructing the regulatory authorities, the sources said.
In addition to allegedly defrauding customers, the sources said prosecutors suspect some brokers and bank managers are guilty of money laundering, by using proceeds of diamond sales to boost profits.
A judge will have to set a preliminary hearing to decide whether to order a trial.
In their trial request, prosecutors listed 575 “offended parties”, all bank clients who had claimed to be scammed, as well as the Bank of Italy, antitrust authority AGCM and two ... "
https://www.reuters.com/article/italy-d ... SL8N2LZ3HX
