The seizure of 22  million euros from six lenders represents the alleged illicit profit the banks made from selling derivatives swaps to the city of Florence, the region of Tuscany and three other municipalities in the region, The local governments have lost about 123 million euros on the swaps 

Italy's finance police seized 22 million euros ($29 million) from six lenders including Bank of America Corp. amid allegations of fraud in a probe focusing on the sale of derivatives to five municipalities in central Italy. 

Police said they took 15 million euros from Bank of America, and 1.7 million euros each from Deutsche Bank AG and UBS AG, according to an e-mailed statement. The remainder was seized from Natixis SA, Dexia Crediop SpA and Banca Monte Paschi di Siena SpA. 

The amount represents the alleged illicit profit the banks made from selling derivatives to the city of Florence, the region of Tuscany and three other municipalities in the region, the police said. The local governments have lost about 123 million euros on the swaps that adjusted payments on 1.4 billion euros of debt, the police said. 

Losses on derivatives from Puglia, on the heel of Italy, to Liguria, the region that borders France along the Mediterranean, are prompting local governments to review their arrangements, while lawmakers have proposed rules that limit the use of swaps. Four banks are on trial in Milan for alleged fraud in the sale of derivatives to the city. 

A spokesman for Bank of America in London and a spokeswoman for Deutsche Bank in Milan declined to comment, while a spokeswoman for UBS in Milan didn?t have an immediate comment. Officials for Natixis, Monte Paschi, and Dexia couldn?t be reached immediately. 

The banks misled the municipalities by saying that the deals would be economically advantageous, Florence?s finance police said. The homes of some bankers and council officials were also searched today, the police said. 

The city of Florence on Dec. 9 suspended payments to Bank of America, UBS and Dexia on swaps in a separate measure led by the local government. In that case, the municipality is using a clause that enables public administrations to cancel contracts without seeking legal recourse. 

To contact the reporter on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net 

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bank-of-america-deutsche-bank-assets-seized-
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