5 major banks raided by French authorities in €100 billion fraud probe

The French capital has seen multiple raids on major banks on its territory as authorities are leading an investigation into a possible fiscal fraud and money laundering case that may have cost the French and German governments over €100 billion ($108 billion).

Indeed, French and German prosecutors and investigators have conducted searches in and around Paris, targeting four French and one international bank, according to the spokesperson for France’s Financial Prosecutor’s Office (PNF), as Deutsche Welle (DW) reported on March 28.

Investigations

Specifically, the PNF representatives said that the banks in question were Société Générale, BNP Paribas, Exane, Natixis, and HSBC, as well as that the investigations were linked to the legally questionable ‘cum/cum’ (Lat. ‘with/with’) practice, in which banks create complicated legal structures to allow wealthy clients get around the taxation of dividends.

For the moment, Société Générale, BNP Paribas, its subsidiary Exane, Natixis, and HSBC are suspected of aggravated tax fraud laundering, while BNP and Exane, in particular, are facing suspicions of aggravated tax fraud, the authorities said, adding that the related investigations began in December 2021.

In a public statement cited by Deutsche Welle, the PNF stressed:

“The ongoing operations, which have required several months of preparation, are being carried out by 16 investigating judges and over 150 investigation agents.”

As the report adds, “some six prosecutors from the western German city of Cologne also took part in the raids” connected with the practices that became more widely known after the 2018 ‘CumEx files’ – a reporting project led by the German investigative newsroom Correctiv, and named after the Latin words for ‘with’ and ‘without’ to describe the nature of the vanishing dividends.

Banks in trouble

Meanwhile, the banking sector around the world is still struggling with the aftermath of several major banks collapsing within days of each other or coming close to their demise, only to be rescued by emergency mergers, and José Manuel Campa, the current chairperson of the European Banking Authority (EBA), has warned that the banking industry was still very vulnerable.

As a result of the widespread contagion, which the CEO of Euro Pacific Asset Management, Peter Schiff, compared to the 2008 financial crisis and described it as a “sequel” that was going to be worse than the Great Recession, the flagship cryptocurrency Bitcoin (BTC) has received a significant inflow of capital, surpassing Visa (NYSE: V) and JPMorgan Chase (NYSE: JPM) in market capitalization.