Unicredit’s Italian Diamond Fraud Case Begins Again By Reuters

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©Reuters. FILE PHOTO: A logo of UniCredit is seen in downtown Milan August 18, 2014. Picture taken August 18, 2014. REUTERS/Stefano Rellandini

MILAN (Reuters) – The trial involving Italian bank Unicredit (MI:) over alleged fraudulent diamond sales will start anew, court sources said on Friday, raising the risk that many of the allegations will be dropped due to time limits could.

An Italian judge decided to refer the case, which involves Italy’s second largest bank and seven of its employees, to the court in the city of Trieste, a company lawyer told Reuters.

The case centers on allegations that banks and brokers sold diamonds at grossly inflated prices to unwitting customers while marketing them as sound financial assets.

All banks involved have already reimbursed the majority of their customers.

The decision, based on the location of the alleged crimes, means Unicredit’s case will have to start over.

“We are pleased that the judge granted our transfer request,” Unicredit attorney Giuseppe Iannaccone told Reuters.

“But I think the allegation is unfounded and we regret that the bank and its employees have had to wait longer to prove their innocence,” he added.

Judge Manuela Scudieri on Friday also ordered diamond broker IDB and 15 people to appear in court at the end of June, court and legal sources told Reuters.

A lawyer for the IDB, which collapsed in 2019, was initially unavailable for comment.

The judge also accepted the settlement proposed by Banco BPM and its subsidiary Banca Aletti at the end of a preliminary closed hearing that began in July 2021.

Banco BPM had proposed paying 240,000 euros ($260,856) as a settlement while another 293,119 euros would be seized, while Banca Aletti would propose 56,000 euros as a settlement.

Intesa Sanpaolo (OTC:) was settled on July 1, while the case against Monte dei Paschi has already been referred to the court in Siena, where it is based.

Many of the fraud allegations to be prosecuted are at risk of being overturned as these types of offenses have a statute of limitations of up to seven years under Italian law.

According to the prosecutor’s application for indictment, the five banks and two brokers, one of whom closed the case last year, are said to have made inflated profits of around 500 million euros from 2014 to 2016 and pulled savers out of their pockets.

Intesa, UniCredit and MPS bought back the diamonds from the customers at the original selling price, while Banco refunded the difference between the price the customers paid for the diamonds and their fair market value.

($1 = 0.9200 euros)

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