Renewed searches of foreign premises linked to the investigation had led to further arrests, including the head of Virgin Islands-based investment fund K1 Global Ltd and K1 Invest Ltd, as well as the head of a related trust company, prosecutors in the southern German city of Wuerzburg said.

The case highlights how cases of alleged fraud have come to light amid the financial crisis around the world. By far the largest fraud case to date concerns the $65 billion Ponzi scheme scam that was operated by Bernard Madoff, jailed in the US last year after confessing his crimes. Meanwhile, in the UK, US and elsewhere, a number of insider dealing crimes have been unearthed, leading in some cases to successful prosecutions.

K1's founder, Helmut Kiener, was arrested last year and remains behind bars.

Lawyers for Kiener denied he committed fraud and had sought his release on bail, arguing he was a diplomat for the West African nation of Guinea-Bissau, the report said, citing documents connected to the case.

Kiener is suspected of fraud and breach of trust in a case in which Barclays and BNP Paribas may have lost millions of dollars and which prosecutors say featured lavish personal spending on planes, a helicopter and luxury properties.