Briton arrested in Las Vegas in carbon trading probe

FRANKFURT (Reuters) - U.S. officials have arrested a 56-year-old Briton in Las Vegas in connection with suspected tax fraud worth 136 million euros ($189 million), deepening a European carbon trading probe that has also drawn in Deutsche Bank. A German prosecutor on Monday said the man was under investigation for participating in a scheme to evade taxes through trading European Union carbon emission certificates using a business based in Dubai. German authorities issued an international warrant for his arrest on May 2 and the man was arrested on May 4. The suspect's identity was not revealed. He is now being held in custody in Las Vegas awaiting extradition, the Frankfurt prosecutor said in a statement. "The accused had flown from Dubai to a boxing event in Las Vegas where he was sponsoring one of the boxers in a fight," the prosecutor said. "He was arrested on the sidelines of the event." The arrest broadens a carbon trading probe that has also affected Deutsche Bank, where prosecutors are investigating 25 staff, including co-Chief Executive Juergen Fitschen and finance chief Stefan Krause, on suspicion of tax evasion, money laundering and obstruction of justice. Deutsche Bank, contacted by Reuters on Monday, referred to its December 2012 statement in which the bank said it was cooperating fully with the authorities. Tax fraud cases rocked the EU Emissions Trading System in 2009 and 2010, and officials warned then that peripheral markets such as power and gas could also become targets. Earlier in April, Frankfurt prosecutors brought charges against two British citizens for suspected tax fraud amounting to 31 million euros in the same trading investigation. The judicial proceedings are being held in Germany because this is where the defendants are suspected of having committed the fraud. At least 14 people have been jailed in three countries so far for their involvement in carbon trading VAT fraud. European police agency Europol has estimated that such crime has cost taxpayers more than 5 billion euros in lost revenue since 2008. (Reporting by Thomas Atkins, Editing by Mark Potter)