Proceedings involving Italian bank Unicredit (CRDI.MI) over alleged fraudulent diamond sales will start again from scratch, judicial sources said on Friday, increasing the risk many of the allegations could be dropped due to time limits.
An Italian judge decided to transfer the case involving Italy’s second biggest bank and seven of its staff to the court in the city of Trieste, a company lawyer told Reuters.
The case centres on allegations that banks and brokers sold diamonds to unwitting clients at vastly inflated prices while marketing them as sound financial investments.
All the banks involved have already reimbursed most of their clients.
The decision, based on where the alleged offences took place, means that proceedings involving Unicredit will have to start over from scratch.
“We are satisfied that the judge has granted our request for a transfer,” Unicredit’s lawyer Giuseppe Iannaccone told Reuters.
“But I consider the allegation baseless and we regret that the bank and its employees will have to wait more time to prove their innocence”, he added.
Judge Manuela Scudieri on Friday also ordered diamond broker IDB and 15 people to stand trial at the end of June, judicial and legal sources told Reuters.
A lawyer for IDB, which collapsed in 2019, was not immediately available for comment.
The judge, at the end of a closed-door preliminary hearing that began in July 2021, also accepted the settlement proposed by Banco BPM (BAMI.MI) and its subsidiary Banca Aletti.
Banco BPM had proposed to pay 240,000 euros ($260,856) as a settlement, while it will have an additional 293,119 euros confiscated, while Banca Aletti would put forward 56,000 euros to settle.
Intesa Sanpaolo (ISP.MI) settled on July 1, while the case against Monte dei Paschi (BMPS.MI) has already been transferred to the court in Siena where it has its headquarters.
Many of the fraud allegations to be prosecuted risk being cancelled given that these kind of offences are time-barred after up to seven years, according to Italian law.
According to the prosecutors’ indictment request, the five banks and two brokers, one of which settled the case last year, are suspected of having made inflated profits of around 500 million euros from 2014-2016, leaving savers out of pocket.
Intesa, UniCredit and MPS bought back the diamonds from customers at the original selling price, while Banco reimbursed the difference between the price clients paid for the diamonds and their fair market value.
($1 = 0.9200 euros)
Reporting by Emilio Parodi and Alfredo Faieta Editing by Keith Weir, Kirsten Donovan