DATE=8/24/1999
TYPE=BACKGROUND REPORT
TITLE=RUSSIA MONEY LAUNDERING
NUMBER=5-44126
BYLINE=BARRY WOOD
DATELINE=WASHINGTON
INTERNET=YES
CONTENT=
VOICED AT:
/// re-running w/correct the Speaker in first act and
first line 8th graph from text ///
INTRO: The U-S Federal Bureau of Investigation, the
Russian state prosecutor, British and Swiss
authorities, and the International Monetary Fund are
investigating alleged fraud involving the deposit of
up to ten billion dollars of criminally obtained
Russian funds in a New York bank. V-O-A's Barry Wood
reports the money laundering investigation is likely
to have far-reaching consequences.
TEXT: Money laundering refers to the criminal
practice of taking ill-gotten gains and moving them
through a sequence of bank accounts so that they look
like legitimate profits from legal businesses. The F-
B-I is trying to determine if criminal operations were
behind the deposit over two years of up to ten billion
dollars of Russian deposits in the Bank of New York.
The bank, one of New York's oldest, has already
suspended two Russian born women who were in charge of
developing new business in Eastern Europe. Neither has
been charged with a crime. One of the women, Natasha
Gurfinkel Kagalovsky, is married to Konstanin
Kagalovsky, who was Russia's representative at the
International Monetary Fund in the mid-1990s.
Ariel Cohen, an analyst on Russian affairs at
Washington's Heritage Foundation, says the allegations
are very serious.
//first Cohen act//
The allegations involve connections to a major
international bank, Menatep, based in Russia and
some top people including the former executive
director of Russia at the International Monetary
Fund, Konstanin Kagalovsky, were also mentioned
in the report.
//end act//
Mr. Kagalovsky is now the vice-chairman of Yukos, a
major Russian oil company.
News of the investigation first surfaced (last week)
in the New York Times newspaper. British investigators
last year alerted U-S authorities to suspicious
transactions through the Bank of New York's London
office that was headed by the second suspended bank
employee, Lucy Edwards. She was born Lyudmila Pritzker
in Leningrad in 1958. She had married an American, Mr.
Edwards and emigrated to the United States in 1977.
British officials traced the suspicious deposits to
Semyon Yukovich Mogilevich, a Russian who Western law
enforcement officials say is a major figure in Russian
organized crime.
There are now suspicions that the Russian central bank
may have deposited some of the loans it obtained from
the I-M-F with the Bank of New York. The I-M-F has
lent Russia about 20 billion dollars, only four
billion dollars of which has been paid back.
Researcher Ariel Cohen says the current investigation
will take time to conclude.
//second Cohen act//
Listeners need to know this is very difficult
and complex investigation. This is not a murder
case or a traffic case. This requires what are
called forensic auditors to go to work, people
with very specific skills. People who know how
to read documents and understand accounting
rules.
//end act//
Most Western banks employ experts to watch for
suspicious transactions that could involve money
laundering. Bank of New York manager Lucy Edwards has
reportedly been regarded as an expert on the subject
and presented papers on money laundering at
international conferences before she was suspended.
(signed)
NEB/BDW/PT
24-Aug-1999 18:34 PM LOC (24-Aug-1999 2234 UTC)
NNNN
Source: Voice of America
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