ITALIAN striker Roberto Baggio has lost up to £2.5 million in an alleged investment swindle, it was reported yesterday.

The former international was one of at least 200 people who placed money in a finance company based in the Adriatic resort of Rimini, which promised enormous returns on foreign investments in tax havens, Italian newspapers said.

But the money has vanished and 16 people from a finance firm in Rimini were arrested just before Christmas.

"There is not much to say about this. It's all in the hands of my lawyers," Baggio, who plays with Italian champions AC Milan, was quoted as saying.

Reports said magistrates in Rimini were investigating a firm which promised to place client funds in a bank based in the West Indies. Some of this money was used to buy shares in a Peruvian marble quarry.

"There would now seem to be no trace of the billions of lire invested," the newspaper Lab Stampa said.

Judicial sources were quoted as saying that other Italian soccer players had put money into the fund but said Baggio was the single biggest investor, with up to 6 billion lire entrusted to the firm.

Corriere della Sera said the finance police were considering opening their own inquiries to see if investors had paid taxes on the funds.

Forbes magazine said that in 1995 Baggio was the world's most highly paid soccer star, earning £3.25 million a year.