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Monday, 14 January, 2002, 20:12 GMT
French bankers held in laundering probe
International bank notes
The money was allegedly deposited in Israel
French bank Societe Generale has said there is no indication that any of its staff have laundered money.

The French bank's president was detained on Monday by police in connection with a money laundering network stretching between France and Israel.

Daniel Bouton and two senior colleagues - Didier Alix and Philippe Citerne - appeared before a judge on Monday.

"There is no indication in the documentation pertaining to the investigation that an employee or a department of the bank have knowingly committed a money-laundering transaction," the bank said in a statement on Tuesday.

The executives can be held for questioning for up to 48 hours.

The bank is suspected of clearing several thousand cheques drawn on bank accounts in France and deposited in Israel in what investigators believe was a large money-laundering network.

Six employees of Societe Generale - France's second largest publicly-traded bank - are already under formal investigation, which is one step short of being charged.

'Appropriate procedures'

Investigators suspect that cheques were either stolen or written in the name of fictitious companies by fraudsters who then allegedly obtained the money by swindling insurance companies or issuing false invoices.

They suspect the bank failed to carry out preliminary checks on the transactions before clearing them.

Best practice relating to money laundering puts the onus on banks and other financial institutions to flag suspicious transactions to the authorities.

Daniel Bouton
Mr Bouton: angered by the probe
In an official statement last week, the bank reiterated its confidence in its staff.

"Societe Generale rigorously respects its legal obligations and implements the appropriate procedures to prevent cheque processing from being used for money-laundering purposes," it said.

On Thursday, Mr Bouton told French radio that it appeared the authorities expected the bank to "go beyond" its official obligations, deploring the fact that his employees were being investigated.

The bank has also argued that with 3m cheques deposited abroad each year, it lacks the resources to run checks on all of them.

An estimated $600bn in illegal money passes through banks in major financial centres every year.

Societe Generale was one of 11 major international banks which recently agreed to beef up internal procedures to crack down on money laundering in the wake of the 11 September terror attacks.

 WATCH/LISTEN
 ON THIS STORY
The BBC's James Coomersamy in Paris
"This is one of these very long-running investigations we have in France"
The BBC's Theo Leggett
"The affair...dates back to 1997"
See also:

20 Nov 01 | Business
Barclays in money laundering probe
06 Sep 01 | Business
Credit Lyonnais probe widens
22 Jun 01 | Business
Battle on dirty money steps up
23 Oct 00 | Business
Clampdown on money laundering
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