Societe Generale on trial in French-Israeli scam

4th February 2008, Comments 0 comments

Embattled French bank Societe Generale faces trial in Paris involving a vast mone laundering scam between France and Israel

   PARIS, Febraury 4, 2008 - Embattled French bank Societe Generale faces
fresh troubles Monday when a trial opens in Paris involving a vast money
laundering scam between France and Israel.
   Four banks, including Societe Generale, and 138 people, including the
bank's chairman Daniel Bouton, are on trial over the multi-million dollar scam
that allegedly ran from 1996 through 2001.
   The other banks include Societe Marseillaise de Credit, Barclays France and
the National Bank of Pakistan.
   Societe Generale revealed late last month it had lost a staggering 4.8
billion euros (7.1 billion dollars) in the biggest rogue trading scandal in
   Takeover talk is now swirling around France's third largest bank, with two
French banks eyeing a possible bid on Societe Generale.
   Allegations of a money laundering network stretching between France and
Israel initially surfaced during an investigation into a separate fraud
involving companies in the Sentier garment-making district of Paris.
   Cheques trafficked from France were allegedly cleared in money exchange
offices or banks in Israel, where a third party can clear a cheque by paying a
cash sum, making it difficult to trace the origin of the funds. The sums were
then repatriated to French banks.
   Among the 138 individuals charged in the France-Israel scam were six
rabbis, a former French prosecutor and 57-year-old Bouton, along with other
banking managers. They face 120 years in prison and stiff fines.
   In the case of Societe Generale, investigators cite one example in which
the bank received seven million euros (10.4 million dollars) in stolen cheques
from the Israel Discount Bank between 1997 to 2001, "knowing these influxes
had a criminal origin."
   All four banks are charged with contributing to money laundering and
profiting from the deals. All deny the charges.
   "Societe Generale and its representatives did not -- either knowingly or
unknowingly -- participate in this system and in no way committed the crime of
money laundering they are charged with," the bank's lawyer Francois Martineau
   Bouton is accused of turning a blind eye to the cheque system, though his
lawyers insist he knew nothing about it.
   Investigators have gathered 600 tonnes of paperwork and evidence for the
trial which is expected to last until July.
   Eighty five people have already been found guilty over the case in 2004.
Some of those defendants are back on trial facing new charges.


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