A BANK which Celtic’s biggest shareholder Dermot Desmond partly owns faces an £80 million fine if convicted for its part in an alleged vast tax avoidance scam.

French prosecutors have also called for Alexander Pankov (below), the chairman and president of the Rietumu Banka of Riga to get a four year jail sentence.

The Herald:

The National Financial Prosecutor (PNF) called for the penalties during what is one of Europe's highest profile financial crime cases known as the France Offshore Affair.

The penalty if imposed would be enough to wipe out the bank's entire net profit for 2016 leaving the Latvian lender still with £9 million to find.

Irish-born tycoon Dermot Desmond holds a near one third stake in Rietumu Banka, having been a shareholder for 12 years and sits on the institution’s ruling council.

French judges have begun hearing the prosecution case which alleges that the France Offshore website system helped launder €700 million euros for "simple fraudsters" and avoid some €300 million in tax.

PNF has called for a seven year jail sentence and a fine valued at £8 million to be imposed on the so-called 'king of offshore' and the main accused in the case, Nadav Bensoussan (seen at Riga airport below) who it is alleged organised the "industrial" system tax avoidance and money laundering.

The Herald:

The PNF also called for the court to send a "signal" by issuing a warrant for his immediate commital to prison.

Details of the penalties came during his trial which opened last Monday and which is expected to end on March 30.

Fourteen people, two lawyers, one banker, salesmen and clients and two companies include the bank were all due to appear at Le Tribunal Correctionnel De Paris, during the case.

Prosecutors Patrice Amar and Ulrika Delaunay-Weiss said said Rietumu was an indispensable link on the floor of the "offshore for all" system between 2008 and 2012, despite warnings from the tax authorities.

The Herald:

France Offshore assured at the time that these practices were perfectly legal.

Established in the early 2000s, France Offshore promised, until 2012, that many taxpayers would avoid tax by creating companies in tax havens.

For rates ranging from € 2,500 to € 6,000 per year, France Offshore, which had been on-line since 2001, was allegedly responsible for setting up screen companies and financial packages to protect their funds from taxation in France.

The court heard that Bensoussan founded a company in real estate before embarking on the alleged large-scale tax avoidance, exploiting the beginnings of the internet and in particular associating himself with the Latvian bank.

"I told myself that it was tolerated," said the 38-year-old self-taught financier almost a month ago, at the beginning of his trial.

The Herald:

Last year, when asked on the Latvia’s public broadcaster LSM's De Facto programme if Rietumu willingly collaborated with money laundering rather than doing so inadvertently, Ms Delaunay-Weiss replied: “That’s the position of the investigating judge.”

She added: “That’s why he charged them. He thinks because of different elements that the bank and some of the responsible persons there knew that it was... how can I say ... a system of money laundering.”

The bank, which is also used by owners of Scottish limited partnerships, has previously been fined for breaches of money-laundering legislation.

Mr Desmond, who has a 31 per cent shareholding in Rietumu Banka, would not make any comment on the latest developments. There has been no suggestion Mr Desmond, as a shareholder or board member, had any knowledge or involvement in wrongdoing.

The Herald:

Mr Desmond, a tax exile who owns his shares in Celtic through an offshore structure in Gibraltar, has been a Rietumu shareholder since 2005. His initial investment in the bank was understood to be about €100 million.

The bank were approached for comment but did not respond.