UPDATE 1-Italy tax police seize $132 mln from Nomura in alleged fraud case

Mon Jul 28, 2014 8:58am EDT

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MILAN, July 28 (Reuters) - Italy's tax police said on Monday they had seized 98 million euros ($132 million) from the British subsidiary of Japan's Nomura Holdings for alleged fraud against the Sicily region in relation to past financial deals.

Police said in a statement Sicily's finances had suffered a damage estimated at around 175 million euros due to a deal involving the securitisation of healthcare bills managed by Nomura and three derivatives contracts signed with the Japanese group to restructure the region's debt.

Nomura said in a separate note it was aware of the action taken by prosecutors in Sicily, which it said related to trades it had entered with the region between 2000 and 2006.

"We are reviewing the situation fully and will cooperate with the prosecutor in this matter," the bank said.

Several local governments in Italy have taken to court their disputes with international banks over complex derivatives deals that turned sour.

In a landmark case, a Milan appeals court in March acquitted four international banks, including JP Morgan and UBS , overturning an earlier verdict which had found them guilty of mis-selling derivatives to the city of Milan.

Police said they were investigating seven people - four Nomura bankers and three local consultants - and had seized assets from them worth around 6.5 million euros. ($1 = 0.7442 Euros) (Reporting by Valentina Za; editing by Agnieszka Flak and Louise Heavens)

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