By Reuters Staff

       2 Min Read

       MILAN (Reuters) - A Milan judge decided to transfer parts of a probe into alleged fraudulent diamond sales by some Italian lenders to the courts of Rome, Siena and Verona, judicial and legal sources attending a closed hearing said on Friday.

       Other strands of the probe will continue to be dealt with in Italy’s financial capital, the sources added.

       The decision, taken for jurisdiction reasons, splits the trial in different proceedings and means that those sent to Rome, Siena and Verona will have to start over from scratch, the sources said.

       They added that many of the alleged frauds risk being cancelled due to the status of limitation, given that this kind of offences is time-barred after up to seven years, according to Italian law.

       All proceedings transferred to Rome, Siena and Verona will restart from the preliminary investigation, which means that local prosecutors will have to re-submit the requests for a trial and a judge will have to set the beginning of a new preliminary hearing to decide whether to indict or acquit the defendants.

       Milan prosecutors in April 2021 had asked for four Italian banks, Banco BPM, its unit Banca Aletti, UniCredit and Monte dei Paschi (MPS), diamond broker IDB and 105 individuals to be sent to trial for allegedly selling diamonds at inflated prices to unwitting clients.

       Banco BPM, UniCredit and MPS at the time had all declined to comment.

       Among these banks, only the position of MPS was transferred to the court of Siena on Friday, while the other ones remain in the preliminary hearing ongoing in Milan since July 2021.

       From 2017, all the banks involved started reimbursing clients. Intesa, UniCredit and MPS have bought back the diamonds from customers at the original selling price.

       A fifth bank, Intesa Sanpaolo settled the case on July 1.

       Banco BPM instead has paid back the difference between the price clients paid for the diamonds and their fair market value.

       Reporting by Emilio Parodi and Alfredo Faieta, editing by Alistair Bell

       Our Standards: The Thomson Reuters Trust Principles.