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ZURICH (Reuters) - Swiss prosecutors have frozen 10 million Swiss francs (7 million pounds) in assets linked to Greek former Defence Minister Akis Tsohatzopoulos and are investigating whether Swiss-based individuals assisted him in laundering money.
In its annual report, the Swiss federal prosecution service said it was investigating numerous money laundering allegations reported by banks after Tsohatzopoulos's arrest, adding this showed the Swiss banks could be abused to aid corruption.
"This poses significant reputational risks not only for the banks involved but for Switzerland as a whole," the report said.
A prosecution spokeswoman said 10 million francs had been frozen in connection with the investigation.
A Greek court sentenced Tsohatzopoulos in March to eight years in prison for failing to disclose the source of lavish wealth that made him a symbol of the corruption that has plagued the country.
Once a powerful Socialist politician who almost became prime minister in the 1990s, Tsohatzopoulos has denied wrongdoing and plans to appeal. He faces a further trial on charges of money laundering and using offshore companies to buy a luxurious mansion in Athens.
Switzerland is trying to improve its image as a haven for ill-gotten gains, blocking nearly 1 billion francs in stolen assets linked to dictators overthrown by the Arab Spring revolts - Egypt, Libya, Syria and Tunisia.
(Reporting by Emma Thomasson; Editing by Jon Hemming)