Prosecutors are preparing for a new phase in their investigation into a multi-billion-euro fraud Italian food group Parmalat that has triggered one of the world's biggest corporate scandals.

Parmalat's founder Calisto Tanzi is being questioned over the scandal.

After a sudden widening of the probe on Wednesday when police arrested seven people including two former Parmalat finance directors and two outside auditors, the prosecutors tracking Parmalat's missing billions were due to launch fresh questioning on Friday, after the New Year's Day holiday.

The investigators in Parma, near the group's headquarters, also want to hear from U.S. and South American banks which have been asked for information.

Long-standing concerns about Parmalat's opaque finances exploded into a full-blown crisis two weeks ago when Bank of America rejected as fake a document purportedly showing a Caymans Island unit of Parmalat held four billion euros ($5 billion) of cash and securities with the U.S. bank.

Since then, Parmalat's founder Calisto Tanzi has been arrested, followed up by Wednesday's seven detentions. They included the chairman and a partner of the Italian affiliate of global accounting group Grant Thornton which certified the accounts of the Cayman Island unit.

Prosecutors say they have uncovered a scheme of systematic fraud involving the auditors going back years which was used to cover up the true state of Parmalat's finances.

Grant Thornton Spa in Italy has denied any wrongdoing.

Tanzi resigned as the crisis came to the boil this month and he has admitted to funneling 500 million euros from the publicly listed company -- now declared insolvent -- into firms owned by his family.

He has also estimated the hole in Parmalat's accounts to be about eight billion euros, according to court documents.

Prosecutors say the hole could surpass 10 billion euros.

As the search for missing money intensified, Tanzi's lawyer said on Wednesday "there is no treasure trove" but added that "if there some resources out there somewhere, they must return to the group."

Doctors on Friday were due to begin a medical examination of 65 year-old Tanzi, who has previously suffered a heart attack, to determine whether he should stay in Milan's San Vittore jail.

'Brazen fraud'

The U.S. Securities and Exchange Commission this week launched its own investigation into what it called one of the "most brazen corporate financial frauds in history."

On Wednesday, a SEC representative met Italian prosecutors and investigators in Parma checked accounts at Bank of America, a police source said, following the seizure of documents and computer data at a Parmalat subsidiary.

As well as blowing the whistle on the non-existent bank account in December, the U.S. bank's involvement with Parmalat includes putting together a deal for outside investors to take a stake in a Brazilian unit of the group.

As well as the seven people arrested on Wednesday, an arrest warrant was also issued for the head of Parmalat's operations in Venezuela, Giovanni Bonici. Italy's envoy to Caracas said he was probably in the United States. Italian judicial sources have said they expect he will return soon to Italy.

No one has been charged in the case.

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