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Three top clerks from the Groupe Societe Generale, the second-largest bank in France, were arrested last night by the finance division of the Paris police department. The three are suspected of co-operating with an Israeli money laundering network, the French Le Parisien is reporting this morning.

The investigation is no longer focused on the Paris activities of Bank Leumi, a top clerk of which was arrested last week, but is now encompassing the activities of "several Israeli banks on French soil", claims the newspaper.

One of the French clerks that was arrested is the legal advisor for Societe Generale. The clerk signed an internal bank document seized by the investigators, in which he warns the bank's management that the amount of Israeli checks that undergo "compensation" in the bank is so high, it may arouse the suspicions of the French police.

The said compensation procedure, the clearing of French bank checks in Israel, entails high commission fees to the French bank that issued the check. The bank is investigating suspicions according to which thousands of stolen French checks were cashed in banks in Israel. Hundreds of these checks were French social security checks stolen out of the post boxes of retired and needy citizens.

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The investigators believe three French banks, Societe Generale, the French branch of Barclays and la Bred were aware of the fact the commissions received from Israel were linked to stolen checks, yet they preferred to overlook the matter.

The fact the investigation is expanding now, a month before the next convention of the international steering committee of the war against money laundering, will hardly improve Israel's chances of getting off the watchdog group's black list.