The “Russian mafia” was not imprisoned

The scandal surrounding money laundering at the Bank of New York is over

A long-standing high-profile trial involving one of the oldest American banks, the Bank of New York, related to money laundering for the “Russian mafia,” ended last Wednesday in the United States. A Manhattan federal court found the bank's former vice president for Eastern Europe, Lucy Edwards (a native of Leningrad, aka Lyudmila Pritsker) and her husband, the head of BECS International LLC Peter Berlin, guilty of money laundering and concealing information from law enforcement agencies. They received five years' probation and six months of house arrest. In addition, they will have to pay a fine of 20 thousand dollars and transfer 685 thousand dollars for two to the US Tax Service. “We are and will continue to pay for our mistakes,” Mr. Berlin said in his court appearance.

The investigation into the case began in 1998 after the Russian Ministry of Internal Affairs contacted the US Federal Bureau of Investigation. Then, at the Bank of New York, law enforcement agencies found payment orders for $300,000, which were paid as a ransom for the release of Russian lawyer Eduard Olevinsky, who had been kidnapped by criminal organizations. The FBI became interested in suspicious electronic transfers of funds from Russia and several Eastern European countries through Bank of New York accounts. Investigators were especially drawn to transfers made from Lucy Edwards' accounts.

In 1999, Vladimir Putin, as prime minister, said that Russian investigators were investigating the case, but information about Russian money laundering through the Bank of New York was not confirmed: “Our senior law enforcement officials met with their American colleagues. But, unfortunately or fortunately for us, the information that was in the media was not confirmed.”

But already in February 2000, Edwards and Berlin confessed and were found guilty as accomplices in creating a bank account fraud scheme. They reported that they collaborated with two Russian banks - Sobinbank and DKB-Bank. This scandal was widely discussed in the Western press, but the Russian government rejected the accusations against Russian banks. According to unofficial information, $7 billion was laundered through the New York bank. A significant part of this money was not of criminal origin. Importers hid their funds in BONY accounts to avoid taxes and duties. But Edwards and Berlin admitted to accepting $1.8 billion in bribes from a Russian criminal group, part of which was used to develop and implement fraudulent schemes.

American journalists, by the way, associated the scandalous transactions with the names of not only Lucy Edwards and Peter Berlin, but also the vice-president of BONY Natalya Kagalovskaya (Ms. Edwards was subordinate to her), whose husband Konstantin Kagalovsky was a top manager of YUKOS and for exactly two years ago proposed to Vladimir Putin to agree that American investors would pay off the company’s debts and the damage caused by Mikhail Khodorkovsky and Platon Lebedev in exchange for Yukos shares. After the scandal, Ms. Kagalovskaya was forced to resign from BONY, and her name no longer appeared in the proceedings.

At a court hearing on Wednesday, Edwards and Berlin fully admitted their guilt and apologized for following the “wild customs of Russian business.” The prosecutor's office, in turn, emphasized that the former bankers actively helped the investigation and gave all the necessary answers. “In every way it was an open collaboration. The state is fully satisfied with their participation in the investigation,” the assistant prosecutor told the judge.

Bank of New York eventually managed to avoid sanctions. Initial accusations that his employees did not promptly report suspicious financial transactions of some of their clients to law enforcement agencies were not followed up. The bank's reputation was preserved largely due to the fact that its management entered into negotiations with the US Department of Justice in a timely manner. In November 2005, the bank, in order to avoid bringing the case to trial, offered the authorities $38 million (26 million to the government, and 12 million to other banks that had lost money as a result of transactions at the Bank of New York), and promised full cooperation to the prosecutor's office in the investigation, assisting independent inspectors in conducting a thorough review of the implementation of the program to strengthen measures against illicit financial transactions, and also committed to appoint an independent controller to monitor the activities of the financial structure for three years.

Denis UVAROV