February 05, 2008	Tuesday	Muharram 26, 1429

PARIS, Feb 4: French bank Societe Generale and its embattled chairman went on trial today along with three other lenders over a vast money laundering scam between France and Israel dating back to the 1990s.

Four banks and 138 people, including Societe Generale chairman Daniel Bouton, who was present in the Paris court, are on trial over the multi-million dollar scam that allegedly ran from 1996 through 2001.

The other banks are Societe Marseillaise de Credit, Barclays France and the National Bank of Pakistan.

Societe Generale revealed late last month it had lost a staggering 4.8 billion euros (7.1 billion dollars) in the biggest rogue trading scandal in history, leaving the lender a likely target for a takeover.

This unrelated trial concerns allegations of a money laundering network linking France and Israel, which surfaced during a massive fraud investigation involving companies in the Sentier garment-making district of Paris.

Traders from the Sentier are suspected of laundering ill-gotten funds, the proceeds of tax evasion, embezzlement or stolen cheques, via banks or money exchange offices in Israel.

Cheques were allegedly trafficked from France to Israel, where a third party can pay a cash commission to clear a cheque. The sums were then repatriated to French banks, making it difficult to trace the origin of the funds.

All four banks are charged with contributing to money laundering and profiting from the deals. All deny the charges.

Among the 138 individuals charged in the France-Israel scam were six rabbis, a former French prosecutor, along with Bouton and other banking executives.

Accused of aggravated money laundering, Bouton risks up to 10 years in prison and a 750,000-euro fine.

Prosecutors informed the 57-year-old chairman that he is accused of participating in the laundering of 210 million francs (32 million euros) of fraudulent funds between 1998 and 2001, by turning a blind eye to the system.

His lawyers insist he knew nothing about it.

Investigators have gathered 600 tonnes of paperwork and evidence for the trial which is expected to continue until July in a specially-built courtroom.—AFP