Posted on 02/13/2008 11:49:06 AM PST by Ivan the Terrible
MOSCOW, Feb 13 (Reuters) - Lawyers for The Bank of New York (BK.N: Quote, Profile, Research) on Wednesday insisted on questioning a close ally of President Vladimir Putin who heads Russia's customs service, which is pursuing a $22.5 billion lawsuit against the bank.
The move to quiz customs chief Andrei Belyaninov -- which the service's top lawyer said was "absurd" -- threatens to further politicise the highly charged case as BoNY seeks to turn the tables on the plaintiffs.
The customs service is suing the bank for damages related to a U.S. money-laundering case from 2000, in which a rogue employee at the bank helped launder $7 billion from Russia -- thought to be the biggest such crime in history.
Last week a BoNY lawyer claimed in court that the head lawyer for the customs service had falsified the documents that gave him power of attorney.
"Because the document bears the signature of the head of the service, it is only appropriate that he shows up to answer for this," BoNY attorney Ivan Marisin said in court.
Customs service's head lawyer Yekaterina Dukhina said outside the court that the claim was absurd and that it was unrealistic to call up a person of such standing.
Belyaninov worked as a KGB agent in East Germany alongside Putin, who is thought to be his close friend. Before being assigned to head the customs service in May 2006, he served four years as director of Russia's weapons export monopoly.
The falsification claims centre on a document dated April 27, 2007 that gives U.S. lawyer Steven Marks, who represents the Russian side, power of attorney.
Marisin said it is printed on letterhead that the service only put into effect in October.
The judge insisted last week on seeing the original of the document. But customs lawyers failed to produce it and Marks said in a letter read to the court that he was unable to attend the hearing.
Andrei Strukov, head of the customs service's legal department, confirmed that his service had given Marks power of attorney, but said he could not remember approving it, and declined to say who in the service could have approved it.
Asked whether the document was printed on letterhead that only existed five months after it was dated, Strukov said, "I don't understand the question...and don't bother repeating it, because I'm afraid I still won't understand."
Judge Lyudmila Pulova did not call on Belyaninov to personally appear at the next hearing, scheduled for Feb. 27.
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.
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