Paris bank boss in China cash scam case
Agence France-Presse, France, May 27, 2003

PARIS - A Paris judge has ordered a manager at the French bank Societe Generale to stand trial on charges of laundering dirty money through China, sources close to the case said Tuesday.

Jean-Pierre Pichard, former regional director for the bank in eastern Paris, will stand trial in a Paris criminal court on charges of "aggravated money laundering", the sources said.

Pichard is suspected of having ties with currency exchange firms that laundered money obtained illegally - through embezzlement of public funds, customs fraud or from illegal workers - by sending it via China. Contacted by AFP, Societe Generale declined to comment on the case.

Fifteen other people, all Chinese nationals, have been ordered to stand trial along with Pichard. Prosecutors have appealed the judge's decision to bring the case to trial.

The decision to try Pichard capped an investigation begun nearly four years ago in August 1999, when the French finance ministry's task force on money laundering pinpointed possible criminal activity. Three currency exchange companies - Baotong Financier, Moncomptoir and Ruitong Change - allowed several million French francs to pass through their offices per day, and took bribes in return for their silence.

The system protected the identities of the senders and recipients of the money, much of which was obtained through the illegal trafficking of clothing and leather goods.

Investigators started looking into the banks where the three firms had opened accounts, ostensibly through which to transfer the dirty money.

They eventually discovered that between 1997 and 2000, Moncomptoir and Ruitong Change deposited some 1.2 billion francs (EUR 183 million, USD 218 million) in cash in their accounts at Societe Generale.

Based on internal memoranda from Societe Generale, examining magistrate Isabelle Prevost-Desprez determined that the French bank had allowed the laundering to continue, despite being fully aware of the illegal activity.

The Pichard affair has no link with another money laundering scandal linking France and Israel in which several high-level officials at Societe Generale have been placed under investigation, including chairman Daniel Bouton.