Italian police searched an office of Bank of America and the home of a former bank executive yesterday as authorities extended their investigation of insolvent food group Parmalat's business partners.
A Reuters correspondent saw tax police enter a Bank of America office in Milan, the latest in a series of searches of Parmalat, its auditors and banks since one of the world's biggest corporate scandals erupted last month.
The search of the US bank's offices was still going on at 1700 GMT, seven hours after it began.
Another major bank, Deutsche, was questioned by Italian prosecutors earlier this week, about its role in underwriting a Parmalat bond sale last September, and sources in Germany familiar with the situation said another meeting might be called for "clarification of some points."
Nine people including Parmalat founder Calisto Tanzi and two outside auditors have now been arrested in the fraud case that has thrown a spotlight on the multinational's dealings with auditors and banks that lent it money and underwrote bonds.
The former head of Parmalat's operations in Venezuela and a Cayman Islands unit at the heart of the scandal yesterday turned himself in to justice authorities in the northern city of Parma.
Magistrates are investigating suspected fraud, market rigging and false accounting and say the hole in Parmalat's accounts could surpass €10 billion. No charges have been filed.
Authorities in Italy, the United States and Luxembourg have launched investigations into suspected crimes that Italian prosecutors say stretched back more than a decade.
And with Tanzi in jail and his business empire in ruins, Parma's soccer club said on Friday its board - including Tanzi's son Stefano, a daughter and third family member - was resigning.
Under Parmalat's big-spending ownership, Parma became one of Italy's most succesful soccer teams in recent years. The government has authorised Parmalat's new administrators to sell the club later this year.
Milan prosecutors have now widened their investigation to 25 people, including former Bank of America executive Luca Sala and two executives of auditors Deloitte & Touche SpA.
Sala worked for Bank of America until mid-2003 when he became a Parmalat consultant, a judicial source said.
Investigators say he was linked to a $500-million Parmalat bond placed by Bank of America. Sala could not be reached for comment yesterday.
"We expected a visit and are cooperating fully with their inquiry and assisting in providing all requested documents," said a Bank of America spokeswoman in London.
Parmalat's crisis exploded last month after Bank of America declared as false a document purporting to show Parmalat's Cayman Island's unit Bonlat Financing Corp had some four billion euros in cash and securities with the bank.
Offshore units are at the heart of the case which the US Securities and Exchange Commission has called "one of the largest and most brazen corporate financial frauds in history."