Police probe fraud scandal targeting Italian MPS bank

Italy's financial police searched premises in several cities Wednesday as part of a probe into an association accused of defrauding Banca Monte dei Paschi di Siena, media reports said. Searches were carried out in Milan, Monza and Siena, including at the headquarters of Centrosim, a financial intermediary society headed by the central institute of Italian popular banks. Police are looking for documents which may help trace transactions between the world's oldest bank and broker company Enigma, sent through Centrosim. Eleven people were placed under investigation last month, including former managers of Monte dei Paschi, as well as brokers from the London-based company Enigma Securities. They are accused of defrauding Italy's third biggest bank for tens of millions of euros (dollars) as members of the so-called "five percent gang", in reference to the suspected five percent payoffstaken on banking operations. Monti dei Paschi was thrown into crisis last year when it emerged that a shady series of derivative and structured-finance deals produced losses of 720 million euros ($987 million). In November, the troubled Italian lender approved a restructuring plan which it said will create a "profoundly different" bank by 2017.