Police has searched several offices of Germany’s biggest bank, Deutsche Bank AG, in connection with a carbon credit tax evasion case. The Bank’s Co-CEO Fitscheand and CFO Krause are currently under investigation.

Five hundred police officers raided Deutsche Bank offices and other private residences in Frankfurt, Berlin and Duesseldorf on Wednesday.

Five arrest warrants for bank employees were issued following the major Frankfurt office raid, in which the building was surrounded by more than 20 police cars.

According to the prosecution, 25 Deutsche Bank employees have been suspected of serious tax evasion, money laundering and attempted obstruction of justice, including Co-Chief Executive Officer Juergen Fitschen and Chief Financial Officer Stefan Krause.

The raid was a part of the CO2 tax evasion probe, Deutsche Bank confirmed in a statement, adding that it was“cooperating fully” with the prosecution.

The investigation of CO2 emission certificates trade by Deutsche Bank employees has been going on since early 2010, with six people sentenced to jail by a German court last year.

Those already convicted in the 300 million euro tax fraud case bought the CO2 emission permits abroad without paying taxes on them.  They then went on to  resell of the certificates among themselves, skimming off the total value in unpaid taxes.

The prosecution is now investigating if Deutsche Bank employees assisted the fraudsters’ trade.

The EU law limiting CO2 emissions for companies allows for the selling of some carbon tax certificates if the company doesn’t emit its total limit of CO2. Other companies that need to increase their CO2 limit can then buy these excess certificates, opening a potential loophole for fraud.

Policemen stand at the entrance of the headquarters of German bank Deutsche Bank in Frankfurt am Main, western Germany, on December 12, 2012. (AFP Photo / Frank Rumpenhorst)

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