Sunday, 10 February 2008

135 people and four French banks including already embattled Societe Generale went on trial in Paris on Monday on charges they abetted a money laundering operation between France and Israel. The case reached court as Societe Generale is reeling from billions of dollars in trading losses announced last month. Those losses are the subject of a separate, unrelated investigation. "It will be intresting to see in which direction the court goes on this." said Michael Hearns an anti money laundering specialist from
In the money laundering trial, the defendants include 142 people or entities including Societe Generale, the French unit of Barclays PLC, the National Bank of Pakistan and Societe Marseillaise de Credit. Societe Generale CEO and Chairman Daniel Bouton and other senior bank executives are among the defendants.
The case centers on five networks, four made up of shopkeepers and companies and the fifth various Israeli associations.
Prosecutors say the banks failed to properly monitor checks drawn on French accounts that were subsequently cashed in Israel. The cash was then returned to France. Suspicious transactions reportedly rarely exceeded 2,250 euros (currently worth $3,335).
While charges vary, individuals, if convicted, could face up to 10 years in prison and heavy fines. The banks risk heavy fines.
Societe Generale is accused of having laundered some 32 million euros, Barclays France close to 24 million euros, National Bank of Pakistan and Societe Marseillaise de Credit about 2.6 million euros.
Societe Generale issued a statement saying that bank employees never "knowingly participated" in any money laundering. The alleged scheme came to light in 1997 when seven banks, including Societe Generale, filed complaints against some of those suspected of involvement. Dozens of people were convicted in that case



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