Authorities said banks, including Societe Generale, BNP Paribas and HSBC, faced a compensation request of more than $1bn.

French authorities have searched the Paris offices of five banks, including Societe Generale, BNP Paribas and HSBC, on suspicion of fiscal fraud, part of a broad European probe into the dodging of dividend tax payments.

The French prosecutors’ actions on Tuesday are the latest to hit global banks over the dividend tax fraud scheme as similar investigations have been conducted in Germany and other European countries.

The National Financial Prosecutor’s Office (PNF) said in a statement the probe was linked to so-called “cum-ex” dividend stripping, a trading scheme whereby banks and investors swiftly trade shares of companies around their dividend payout day. The practice aims to blur stock ownership and allow multiple parties to illegally claim tax rebates on dividends.

Societe Generale and BNP Paribas confirmed the searches, declining further comment. The PNF, confirming an earlier report in Le Monde newspaper, said Tuesday’s searches had also targeted Exane, which is part of BNP Paribas, and Natixis, the investment bank arm of French banking group BPCE.

A French financial prosecution office spokesperson said it was impossible to put an exact figure on the scale of the fraud but said the banks together faced an overall compensation request of more than $1bn, including fines and late interest payments.

The oldest case being investigated dates back to 2014, and it was not possible to say when the practice had ended.

In December, a German court sentenced tax lawyer Hanno Berger to eight years in prison after he was alleged to have masterminded one of the country’s biggest post-war frauds through a dividend-stripping scheme that some estimates said cost German taxpayers around 10 billion euros ($10.7bn).

It was the highest-profile prosecution and longest sentence to date in a series of trials that have also convicted British bankers.

“The ongoing operations, which have required several months of preparation, are being carried out by 16 investigating judges and over 150 investigation agents,” the PNF said in its statement. It said six German prosecutors were also assisting the investigations.

The searches come as the global banking sector is in turmoil following this month’s collapse in the United States of Silicon Valley Bank and Signature Bank, and the government-orchestrated takeover of Credit Suisse by rival UBS.