(Adds Cassa Lombarda statement)
MILAN, Nov 7 (Reuters) - Eighteen managers of Swiss private bank PKB Privatbank SA Lugano are under investigation in Italy for fiscal fraud and money laundering, Milan's Chief Prosecutor Francesco Greco said on Wednesday.
The managers under investigation are mostly resident in Italy, where PKB owns Cassa Lombarda, Greco said.
Tax police had searched managers and were inspecting the Cassa Lombarda headquarters in Milan, the prosecutor added.
PKB confirmed in a statement on Wednesday that the bank and some of its employees were under investigation.
"As far as we know, the investigation tends to assess the way the bank has operated on the Italian market in past years and does not concern its customers," it said.
"We believe that the bank and its partners have always acted according to the existing regulation," it added.
In a separate statement Banca Lombarda said its headquarters had been searched by order of the Milan prosecutor on Wednesday in relation to a criminal investigation it was not directly involved in.
"The bank is fully cooperating with the judicial authority and affirms it has always operated according to existing regulation," it said.
The prosecutor said managers allegedly collected money from 198 Italian clients since 2015, which they knew came from tax evasion, and transferred the cash to PKB in Switzerland.
Some 409 million euros ($469 million) resurfaced in Italy through a voluntary disclosure scheme that allows Italian residents to repatriate capital held abroad, Greco said, adding that about 50 clients living in the Milan area had been questioned.
"We have made checks on one and a half million telephone calls and mapped the whole activity of these managers, proving the existence of a stable and hidden organisation," the prosecutor said.
In a separate case, the Swiss financial watchdog FINMA said in February that PKB committed serious breaches of money laundering regulations in business linked to Brazilian groups Petrobras and Odebrecht.
($1 = 0.8729 euros)
Reporting by Manuela D'Alessandro Writing by Giulio Piovaccari; Editing by Edmund Blair and Kirsten Donovan