Police are probing possible links between a multi-million dollar swindle and Bermuda.

Smooth-talking conmen in the UK are thought to have siphoned off cash from their scam to offshore tax havens.

And, according to British Police, these could include Bermuda, the Cayman Islands, the Bahamas, Netherlands Antilles, St. Martin, and the Leeward Islands.

Now Bermuda's Police Service have launched their own inquiries.

Said Police spokesman P.c. Gary Venning: "We haven't been asked to investigate anything, but we are checking through Interpol to find out if Bermuda is involved in any way.'' British Police fear the fraud which targeted wealthy investors across Europe could hit the banking system worldwide.

The scandal has already set alarm bells ringing in Bermuda, prompting inquiries by local bankers.

Executive vice-president of the Bank of Bermuda, Mr. Louis Mowbray, said yesterday checks had been made with the Police -- but no evidence of any connection between the scam and the Island had been unearthed.

"We have also checked through the bank to find out if it rung any bells, but came up with nothing.'' Mr. Mowbray added the Bank of Butterfield was in the same predicament.

"The whole thing is mystifying.'' Yesterday, a German in Britain was charged in connection with the fruad, which could amount to $155 million or more.

Ten people, mostly Germans, were arrested on Wednesday when police launched raids in the southwestern English seaside resort of Torquay after an international investigation by Interpol, the Federal Bureau of Investigation in the United States and Britain's Serious Fraud Office.

"We are just at the tip of the iceberg,'' said Assistant Chief Constable John Albon as fraud squad officers began sifting through stacks of documents and computer equipment.

German national Gerhard Martens appeared before Torquay magistrates charged with dishonestly obtaining $622,500 from an investor, and with various offences under the Companies Act.

He was accused of falsely representing that Allgemeine Handels und Effectenbank AG, of which he said he was a director, had agreed to credit $450 million to the account of the investor.

Martens, married with two children, was remanded in custody until September 14. The other nine arrested on Wednesday were released on police bail to appear in court on October 25.

Police allege the ring, operating out of a former bank building in Torquay, had set up several hundred companies.

Key "shell'' companies at the centre of the alleged scam were BancEurope and Allgemeine Handels und Effectenbank, registered in the US state of Delaware, police said.

Both have been involved in a number of attempted "advance fee'' frauds, investigative sources say.

These often involve worthless securities called "standby letters of credit'' or "prime bank notes'' which are supposedly traded in a secret, but non-existent, inter-bank market.

The fraudster makes off with an initial fee paid up front for a bank loan or line of credit that never materialises.

If the fraud is totally successful, the con-men disappear with the whole of the victim's investment in the fake certificates that are supposed to generate fantastic returns.

Yesterday, Sgt. Jon Weal, a spokesman for Devon and Cornwall Police in southern England, told The Royal Gazette the ring had set up an estimated 200 companies.

Sgt. Weal said clients were promised high returns on investments but their cash was probably moved through the companies into accounts in offshore centres such as the Bahamas and Bermuda.

It is thought the ring may also have been involved in money laundering and drug trafficking and could face further charges.

Sgt. Weal said the fraudsters' victims were probably blinded to possible risks involved by the large sums of money involved.

Britain's Serious Fraud Squad told The Royal Gazette it was unclear what connection the scam had with other countries.