It is hard for me to believe 7 billion could flow from mother Russia without many people getting a cut.
• About that time, Russian banks, some under the control of government officials, were tipped off to the Kremlin's plan to devalue the ruble.
• The banks and government officials, who had purchased high-interest, short-term treasury notes issued by the government and known as GKOs, began selling them before the devaluation would drastically reduce their value.
• The banks took their ruble proceeds from the sales of the notes - including the proceeds earned by the government officials - and exchanged them for dollars from Russia's Central Bank. Some of the dollars in the Central Bank's reserves were from that IMF deposit.
• The banks then transferred the dollars to overseas banks.
• On Aug. 17, 1998, the ruble collapsed, leaving the GKOs held by the Central Bank nearly worthless. Meanwhile, the IMF money was effectively gone.
"These people were tipped off, (they) speculated, cashed out and pocketed the difference," a U.S. investigator said. "It was not an accident." Since the IMF funds, as is standard practice, were directly deposited into a general account at the Russian Central Bank and mingled with existing currency, it is impossible to distinguish IMF funds from other dollars. Still, a senior IMF official in Washington said he had "no doubt" that IMF money was effectively transferred out. "Most certainly, IMF money was involved," the official said. "Everyone knows it. There is no doubt."
As part of the probe, investigators obtained more than 3,500 pages of records from the Bank of New York showing that "several billions" of dollars were transferred out of Russia just days after the IMF monies were allocated and before the ruble crash took place. Money flowed into at least 20 accounts at the London office of the Bank of New York, investigators said. It was then transferred to small banks in the Isle of Man in the Irish Sea, the island of Antigua in the Caribbean and several other locations, they added.
Russian Mob May Have Laundered Billions At Bank Of New York
Alerted more than a year ago by British authorities investigating Russian organized crime, the accounts at the Bank of New York have been linked to Semyon Yukovich Mogilevich, believed to be a top boss in the Russian mob. The activities of Mogilevich, 53, whose fortune is estimated by British intelligence at $100 million, have been watched closely by the U.S. Central Intelligence Agency and European counterparts for the past five years.
Reputed organized-crime figure may never face U.S. charges
(AP) A reputed Russian organized-crime figure arrested there in connection with an alleged tax-evasion scheme may not be returned to the U.S. to face fraud charges, American authorities said. Semyon Mogilevich, 61, had been wanted in the United States for nearly five years after being named in a federal indictment in Philadelphia. But there is no extradition treaty between Russia and the U.S., said Suzanne Ercole, the lead federal prosecutor in the case.