Portuguese Police Raid Novo Banco and KPMG in Fraud and Money Laundering Probe

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On Wednesday, October 29, Portuguese authorities raided Novo Banco’s Lisbon premises as well as the local offices of auditing firm KPMG as part of “Operation Hairpin.” This is part of an investigation into suspected corruption, money laundering, and fraud linked to the sale of the bank’s assets.

According to a Public Prosecutor’s Office statement, the operation involved over 100 officers and IT specialists who executed searches at bank premises, private residences, a law firm office, the auditor’s unit, and 16 additional companies. 

While KPMG confirmed its Lisbon offices had been investigated, the firm highlighted that one of its clients is the target of the investigation, not KPMG itself, and that it is cooperating fully.

The investigation is said to center on alleged “active and passive corruption in the private sector, aggravated fraud, and money-laundering in the context of the sale of Novo Banco’s assets since 2018.” Novo Banco was created in 2014 out of the collapse of Banco Espírito Santo (BES), and this year it was bought by France’s BPCE.

The raid serves as a reminder of both the ubiquity of fraud and the importance of compliance with escalating AML regulatory scrutiny across Europe.