updated 1/19/2004 4:01:32 PM ET 2004-01-19T21:01:32

A banker who had served on Parmalat's board of directors was jailed Monday on charges of criminal association and fraudulent bankruptcy, widening the fallout from the food company's fraud scandal.

Franco Gorreri became the 10th person arrested in the case. Because of the Parmalat investigation, Gorreri had recently temporarily stepped aside as chairman of Banca Monte Parma, said Cmdr. Maurizio Raponi, head of the tax police office in Bologna.

Raponi said Gorreri was being investigated for his former role on Parmalat's board and not for his role at Banca Monte Parma. The bank, founded in 1488, is the main local bank in Parma.

Meanwhile Monday, two jailed former Parmalat officials returned to company headquarters to help investigators shed light on the fraud. Fausto Tonna, the former chief financial officer, and Gianfranco Bocchi, an accountant, were escorted by police from prison in Parma and entered the company headquarters in nearby Collecchio from a back entrance.

Tonna, once the right-hand man to founder Calisto Tanzi, is considered key to disclosing the intricacies of the fraud and the massive manipulation of the company's balance sheets. He has been cooperating with prosecutors since his arrest on Dec. 31, and interrogated at length over the past days.

In Milan, prosecutors said 25,000 complaints have been filed by angry investors holding Parmalat securities, and a court there rejected a request by Tanzi to be released from jail and placed under house arrest.

Tanzi, who was arrested Dec. 27, was moved to the medical unit of his Milan prison earlier this month. But the court refused to grant him house arrest, citing the danger that he might flee or tamper with evidence. Tanzi's lawyer said he would appeal.

Also on Monday, Italian news agencies said that Parmalat auditors, Deloitte & Touche's Italian branch and the former Italian branch of Grant Thornton, have been formally placed under investigation.

At Parmalat headquarters, Tonna and Bocchi were expected to spend several hours helping prosecutors pore over documents.

Tonna insists he was an instrument in Tanzi's hands. Bocchi, too, has reportedly said he was following orders. Early on, he made one of the most startling revelations in the case, telling prosecutors that a top official ordered that a computer used to falsify documents be smashed with a hammer.

The Parmalat scandal exploded one month ago, when it was revealed that Bank of America wasn't holding about 3.95 billion euros ($4.9 billion), as the Italian company had reported in September.

Italian prosecutors say Tanzi has admitted to a 8 billion euro ($10 billion) gap in the firm's balance sheet, and that over the years up to 500 million euros ($640 million) had been diverted from Parmalat to cover losses by his family's tourism businesses.

Last month the company entered bankruptcy protection.

The scandal at the company, once seen as a model of Italian capitalism, has shocked the financial world and prompted outcries that existing investor-protection rules are inadequate. Premier Silvio Berlusconi's government has said it wants to reform the nation's financial regulators.

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