LONDON, England (CNN) -- Britain's Serious Fraud Office and London police are investigating an alleged $81 million (£56 million) fraud on the corporate banking department of Allied Irish Banks (AIB).
Allied Irish Banks has allegedly been the subject of a $81 million fraud.
The SFO said it had searched a business and two residential addresses in London and believed AIB was not the only financial institution deceived by the suspects.
It said that between 2003 and 2007 AIB, Ireland's largest bank by market value, loaned money for the purchase of UK investment properties to companies controlled by an individual who was now the main suspect.
The SFO said the main suspect operated with the assistance of others.
However, in 2008 AIB identified problems with one element of its security interests over the investment properties.
"Following an internal review it became apparent that the guarantees of certain lease payments on these properties by an investment grade counterparty (a blue chip property company) were fraudulent," the SFO said.
AIB referred the matter to the authorities and also took control of and sold the relevant properties, which resulted in a write down of the outstanding loan balances by £56m, the SFO said.
The office said the alleged fraud involved the borrowing companies creating "overriding" leases.
"These leases were generally for longer periods and at higher rents than the existing occupational tenants' leases.
"The apparent existence of these additional leases increased the values of the properties, with lease payments being a direct obligation of the investment grade counterparty," the SFO said.
AIB is considering legal action over the $81 million loss.