2 Russians Seen in SocGen Fraud Case

Societe Generale, the French banking giant hit by a $7.3 billion trading scandal, has alerted the French authorities to a case of suspected money-laundering through the bank involving two Russian businessmen, a French newspaper said Tuesday.

The bank passed the French Finance Ministry its findings from an internal investigation last week, after it noticed suspicious transactions involving several accounts, which were being used to channel hundreds of millions of euros into real estate projects in and around Paris, Le Parisien reported.

SocGen's investigators found about 800 accounts held with the bank that were registered to front men or companies acting on behalf of two brothers, the paper said.

The French authorities are currently reviewing the evidence, and will investigate whether the bank had adequate anti-fraud controls in place, the paper said.

A spokeswoman for the French Finance Ministry confirmed Tuesday that an investigation was ongoing, but refused to provide further details, citing the confidentiality of the case.

SocGen refused to comment on or confirm the report, citing bank policy.

The paper did not name the two brothers in the case. It said they were of Russian nationality, lived in London, had amassed fortunes in the aluminum industry and had repeatedly rebuffed accusations of being connected to organized crime.

Le Parisien said the two brothers had been informed of the claims, and had denied them.

It was not immediately clear Tuesday to which brothers the newspaper was referring.

Among Russia's most famous sibling duos are the Chyorny brothers, Lev and Mikhail, who came to prominence in the country's aluminum industry with the Rueben brothers' London-based TransWorld Group, and the Zhivilo brothers, who were major shareholders in the Novokuznetsk aluminum plant in Western Siberia.

A Moscow-based spokesman for Lev Chyorny on Tuesday denied that the brothers could be involved in the French investigation. "There are lots of well-known brothers who worked in the Russian aluminum industry," he said. An Israel-based spokesman for Mikhail Chyorny could not be reached for comment Tuesday.

n SocGen and its chief executive, Daniel Bouton, are among the defendants in a Paris money-laundering trial of 150 companies and individuals that began Monday. SocGen is accused of failing to spot $121 million in suspect transfers into Israel in the 1990s.

n Jerome Kerviel, the rogue trader at the center of the SocGen trading scandal, on Monday accepted part of the responsibility for the losses in his first public comments on the affair, but said he refused to be a "scapegoat" for the bank.