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Digital Identity, Security & Online Fraud

Five banks and two companies investigated over diamond scam

Thursday 21 February 2019 | 12:46 PM CET

Banco BPM, UniCredit, Intesa Sanpaolo, MPS, and Banca Aletti, along with companies IDB and DPI, have been involved in an investigation for fraud and money laundering.

Thousands of savers bought precious stones on the advice and encouragement of bank staff, little knowing that if they then tried to sell them, they would lose up to 50% of their investment. Investigations into the scam by prosecutors in Italy are focusing on 75 suspects from the five banks and two companies. They have led to the seizure of over EUR 700 mln, with alleged victims including celebrities.

The situation so-called ‘investment diamonds’ was initially brought to light in 2016, and the major players were Intermarket Diamond Business Spa in Milan, which operated through UniCredit, Banco BPM and Banca Aletti, and Diamond Private Investment di Roma Spa, which relied on MPS and Banca Intesa Sanpaolo. As such, under the agreements, the banks had to make the advertising material of the two companies available in their branches. However, according to investigations by tax police, the bank’s managers and financial advisors proposed the investment into the diamonds to appear as a ‘store of value’, guaranteeing a constant annual yield of 3-4%.

Moreover, the victims were not clearly explained that half of their money went on VAT, bank fees, and company profits, and that if they wanted to disinvest, they would have to pay an additional 10%. So far, around 100 victims have been identified, even though there are thousands of customers who have already taken steps to bring a class action.

More: Link
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