The French national financial prosecutor’s office (Parquet Financier National – PFN) announced today that it has engaged in multiple search operations at five banking and financial services firms located in Paris and La Defense (a suburb of Paris).
According to the prosecutor, the actions are part of five preliminary investigations opened on December 16 and 17, 2021, regarding allegations of aggravated money laundering, aggravated tax evasion, and for some of the banks, aggravated tax evasion relating to the so-called CumCum fraud scheme.
The CumCum fraud ploy involves a shareholder transferring control of shares to a bank just prior to the issuance of a dividend. After the dividend has been paid, the shares are returned to the investors without having to pay any tax on the payment.
The ongoing investigation, which is said to have required several months of preparation, is being carried out by 16 magistrates from the national financial prosecutor’s office and more than 150 investigators from the financial judicial investigation service, along with 6 German prosecutors from the Cologne public prosecutor’s office involved in the context of European judicial cooperation. Previously, a German lawyer was incarcerated for 8 years as a result of the CumCum scam that apparently cost German tax authorities over €270 billion.
According to France24, both Societe Generale, HSBC, and BNP Paribas were under scrutiny by the regulators. Bloomberg stated that the banks may have to pay over €1 billion in penalties.
