Hong Kong companies challenge search for evidence

The lawyer alleged that the Italian prosecutors had seized privileged documents from the companies during their search in 2007.

HONG KONG, March 22, 2010 (AFP) - An Italian prosecution team unlawfully searched four companies to investigate fraud charges against Italy's Prime Minister Silvio Berlusconi, a Hong Kong court heard Monday.

The team seized documents during a search of the companies' offices in Hong Kong on January 2007 as part of an investigation into allegations of tax fraud, embezzlement and false accounting by Berlusconi.

They also conducted similar raids in the US and Ireland around the same time, the High Court was told.

Gerard McCoy, a lawyer for the Hong Kong companies, which have sought a judicial review of the search's legality, said the Italian prosecutors had exaggerated Berlusconi's alleged offences in order to persuade the Chinese and Hong Kong governments to authorise their searches.

McCoy told the court a letter sent by Italian prosecutor Fabio de Pasquale to the Hong Kong government requesting legal assistance "was disfigured by misrepresentations, omissions, and inconsistency."

McCoy said De Pasqale had falsely claimed that the allegations against Berlusconi involved as much as 170 million US dollars, when the sum was actually less than one million dollars.

The lawyer also alleged that the Italian prosecutors had seized privileged documents from the companies -- Harmony Gold, Wilshire Trading, CS Secretaries, and Loong Po Management -- during their search in 2007.

Just weeks before their operation in Hong Kong, the prosecutor directed a raid of "strikingly similar" pattern in Los Angeles, according to documents the Hong Kong companies filed earlier with the court.

The US raid, on the home and office of Frank Agrama, founder of television programming company Harmony Gold USA, was to investigate claims that Agrama, Berlusconi and others had been involved in inflating prices for TV rights so kickbacks could be paid to executives in the prime minister's media empire.

A US court later withdrew the search warrants for the raid, declared their execution unlawful and ordered the return of the seized properties. It also ruled that the Italian prosecutors "deliberately and wilfully searched through legally privileged materials in contravention of US law."