Oil tycoon John Deuss has gone on trial in the Netherlands for alleged illegal banking, more than five years after he was arrested in Bermuda.

The 69-year-old appeared in court in Arnhem, according to Dutch newspaper De Telegraaf, where he denied membership of a criminal organisation, not reporting unusual transactions and illegal banking involving his First Curacao International Bank (FCIB).

Mr Deuss is standing trial with his sister Tineke, 66, of Berg en Dal, in Holland, who also pleaded not guilty to the charges. She told the court: “We don't see any ground for the accusation.”

Dutch businessman Mr Deuss has a home in Bermuda and was arrested here in October 2006 before being voluntarily extradited to his homeland.

He denied any wrongdoing and later returned to the Island while investigators continued to probe allegations about FCIB.

His trial is before three judges and is expected to last 18 days, with a judgement in May.

Prosecutors allege that FCIB was at the centre of a complicated tax swindle known as carousel fraud, which loses the UK billions of euros in tax every year.

They have told the trial that Mr Deuss was arrested in 2006 based on British intelligence reports showing that FCIB's turnover grew from 180 million to 653 million euros in one month and that some of its clients were involved in carousel fraud.

Lawyers for Mr Deuss say FCIB's activities took place in the Dutch Antilles, where he had a banking licence. But the prosecutors allege that almost all activities came from his castle in Berg en Dal.

The case continues.

* Harry van Gelder is a reporter on De Telegraaf newspaper in Amsterdam.