French Agents Raid Paris Banks As Tax Fraud Quiz Widens

French authorities searched the Paris offices of five banks late last week, including Societe Generale, BNP Paribas, and HSBC, on suspicion of fiscal fraud.

Photo Insert: Societe Generale is one of the banks suspected of tax fraud.

The search was part of a broad European probe into the dodging of tax payments on dividends, CNN reported.

The French prosecutors’ actions are the latest to hit global banks over the dividend tax fraud scheme. Similar investigations have been conducted in Germany and other European countries.

France’s financial prosecution office, the PNF, said in a statement that the probe was linked to so-called “cum-ex” dividend stripping, a trading scheme whereby banks and investors swiftly trade shares of companies around their dividend payout day, Reuters also reported.

The practice aims to blur stock ownership and allow multiple parties to illegally claim tax rebates on dividends.

The PNF, confirming an earlier report in the newspaper Le Monde, said the searches had also targeted Exane, which is part of BNP Paribas, and Natixis, the investment bank arm of French banking group BPCE.

A spokesperson for the French financial prosecution office said it was impossible to put an exact figure on the scale of the fraud but said the banks faced a total compensation request of more than $1 billion, including fines and late interest payments.

The oldest case under investigation dated back to 2014, and it was not possible to say when the practice had ended.

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