updated 1/20/2004 10:57:59 AM ET 2004-01-20T15:57:59

Bank of America on Tuesday denied allegations that it holds an account containing billions of dollars siphoned from scandal-struck Parmalat.

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Bank of America had been asked by the new Parmalat management last week to look into a lawyer's allegations that the huge U.S. banking company has $7 billion in assets in an account numbered 8660001841.

"We have completed our systemwide search of deposit accounts and that account does not exist and never existed at Bank of America," the bank said in a statement.

In Rome, the head of Italy's stock market regulator, Lamberto Cardia, said he asked Italian magistrates to look into the allegations. He also said the scale of misbehavior at Parmalat made it virtually impossible to detect fraud at the company.

Last week, lawyer Carlo Zauli told the Italian Web site tgfin.it that an alleged multibillion dollar Bank of America account could be traced back to the family of now-jailed Parmalat founder Calisto Tanzi. Zauli said he'd tracked the money with a team of private investigators working in several countries.

Earlier this month, Zauli announced plans to legally contest Parmalat Finanziaria's insolvency, on grounds that it still held billions of dollars in hidden assets. He first gave details of the claimed account Friday.

Parmalat's new management has said it is unaware of any such account.

The multibillion dollar scandal at a company once seen as a model of Italian capitalism has shocked the financial world and prompted outcries that existing investor-protection rules are inadequate.

Cardia, the chairman of stock-market regulator Consob, said his watchdog body should be given more teeth. But, he added, it would have been "impossible to avoid a crisis like Parmalat" even with stronger powers.

"When crime is involved, frauds of this dimension only emerge in the case of default," said Cardia.

In remarks before the a joint parliamentary commission set up to explore the case, Cardia said that Tanzi's behavior and that of his top managers remained fraudulent until the end.

But, he added, "the company's board members, accountants and auditors were either accomplices or remained silent _ one of the two."

He said Consob sent some 60 inquiries to Parmalat between July and early December, but only received "increasingly vague" answers.

Parmalat entered bankruptcy protection last month, after it acknowledged that Bank of America didn't have nearly $5 billion of its funds, as the dairy company had falsely claimed.

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

Estimates of the company's total debts range as high as $16 billion).

Bankruptcy-protection commissioner Enrico Bondi, who is trying to save Parmalat from collapse, is expected to provide a comprehensive analysis of the company's current financial situation by the end of the month, Cardia said.

Meanwhile in Milan and Parma, prosecutors are investigating.

Both Bondi and the investigators have been trying to ascertain whether some of the lost money might still exist.

Tanzi has acknowledged that some money was diverted to save struggling company units, but he has repeatedly denied that he has any hidden accounts with misappropriated Parmalat money.

A total of 10 people have been detained in the case. The latest arrest, that of a banker who had served on Parmalat's board of directors, was carried out Monday.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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