RUSSIAN MOB CONTROLLED BANK AT THE
HEART OF MONEY LAUNDERING SCANDAL
Bank error: Russia's awful banks: Russia's corrupt and unreformed banks are
ensuring that the country's economy deserves the same adjectives
The Economist, 09/30/2000
EVERYBODY agrees, but nobody acts. That familiar theme from Russian literature
echoes through the tragi-comedy of the country's crippled and poorly supervised banking
system, which consists largely of grandly named but tiny outfits that conduct murky
treasury operations for their owners... In particular, the central bank has
hamstrung the feeble efforts of ARKO, the bank-restructuring agency, to deal with the
aftermath of the 1998 crisis. More than two years later, the authorities have been unable
to close down even such spectacularly bust banks as Inkombank ...
Russian TV describes new balance of
power in country's business elite
BBC Monitoring 09/24/2000
Two of 13 captains of Russian business who led Boris Yelstin to power in 1996,
Stolichnyy bank head Aleksandr Smolenskiy and Inkombank head Vladimir Vinogradov,
have completely disappeared from the scene.
"Fallen Comrades" in
Russiangate Drama. Have Bank of New York Officials Received Payoffs to
Help Launder "Russian Dollars"? Moscow Telegraph August
29, 2000 by Emily Topol
Documents obtained by MT show that top officers of the
Bank of New York, including its chairman Thomas Renyi, may have received hefty payoffs
through an elaborate network of offshore companies. One such document is a chart of
various offshore entities used in a grand scheme of funneling "Russian dollars"
into the pockets of the members of BONY Olympus.
Russian bank declared bankrupt
02/02/2000 BBC Worldwide Monitoring Moscow, 2nd February: The Moscow Arbitration
Court on Wednesday declared Inkombank bankrupt.
Truth is Still Uncertain
BRIDGE NEWS, December 23, 1999,
By Heather MacGregor
Reports are coming from all directions in the looming Russia money laundering
scandal with no end in sight. Just last week, Segodnya, a Russian daily known for its
Communist stance, alleged a former CIA bureau chief, Fritz Ermarth, masterminded the
scandal surrounding the Bank of New York and then cleverly led people from around the
world to pursue that twist.
Judge OKs subpoena
of BONY exec in suit
BRIDGE NEWS November
23, 1999. RUSSIA LAUNDERING Judge OKs subpoena of BONY exec in suit --By Heather
A US federal judge agreed to allow plaintiffs to
subpoena former senior executive Natasha Gurfinkel Kagalovsky to give her deposition. The
plaintiffs, a group of depositors of the now-insolvent Russian bank Inkombank, allege the
Bank of New York aided the Russian bank in a money laundering scheme.
Rose Fast, Fell Hard at Bank of New York
THE WALL STREET
JOURNAL, 11/23/99 By ANN DAVIS and PAUL BECKETT
People familiar with the matter say some of Ms. Kagalovsky's own executives
knew about the transfer system. Authorities also are examining whether she became too
close to one of her biggest clients, Inkombank, which she supported in an application to
open a U.S. office shortly before Russian regulators criticized the bank's bookkeeping.
bank regulator 'warned about bribes'
The Times of London Nov. 05, 1999
Inkombank chief says
US officials bribed
Moscow Telegraph, November 5, 1999 by Victor Simony
A former head of Russia's now-insolvent Inkombank told a confidante last summer
that the bank routinely paid bribes to US official in Washington and used a mesh of
offshore accounts to cover the tracks. The confidante, who asked to be referred to by his
first name Mikhail, said US officials were not mentioned by name or agency.
Fresh Claim About
Banker in 'Dirty Cash' ...
The Times of London, November 4, 1999. By JAMES BONE IN
AND DAVID LISTER
A KEY executive at the Bank
of New York appears to have been granted "power of attorney" over an offshore
company linked to part of a suspected money-laundering scandal. An investigation by The
Times has established that Natasha Gurfinkel Kagalovsky, who recently resigned as the
head of the Bank of New York's Eastern Europe division, was given authority in 1995 over a
Liechtenstein company, Tetra Finance Establishment.
Bank of NY Scandal
Widens; Senior Exec Implicated
Bridge News By Heather
MacGregor, November 1, 1999
The Russia money-laundering scandal is expanding to
link former top Bank of New York executive Natasha Gurfinkel Kagalovsky directly to
Inkombank, a Russian bank with alleged organized crime ties, according to documents given
to Bridge News. The Bank of New York was Inkombank's correspondent bank since 1992, and
continued to do business with it despite years of accusations against the Russian bank
dating back at least to 1995.
allegations of money laundering through the Bank of New York CNN-Moneyline
News Hour October 28, 1999 Italian prosecutors say they've discovered evidence
that Russian criminal organizations washed millions through the bank.... "And who
knows where it's going to end up" says Emanuel Zeltser, Director of American Russian
Law Institute, "it's certainly not going to stop at Natasha Gurfinkel's level."
World Bank Probes Russian Member's Ties to
Inkombank Memos Suggest Grigoriev Gave
Private Bank Tips On Debt Investments
THE WALL STREET JOURNAL, October 22, 1999, By Wall Street
Journal staff reporters Andrew Higgins in Moscow, Paul Beckett in New York and Michael M.
Phillips in Washington.
The World Bank is investigating whether a senior Russian representative to the
international financial organization provided inside information and other assistance to a
private Moscow bank. The World Bank began its inquiry after reviewing documents indicating
that Leonid Grigoriev , a senior member of Russia's World Bank mission in Washington from
1992 to 1997, provided Moscow-based Inkombank with tips on debt-market investments and
acted as its liaison in the U.S. Inkombank was one of Russia's largest banks until it lost
its license last year.
Inkombank Used US Accounts for Sham Office
BRIDGE NEWS, October 13, 1999
Russia's now-insolvent commercial bank
Inkombank used front companies and US bank accounts to run an unlicensed banking operation
in New York between 1994 and 1996, according to documents obtained by Bridge News. The
alleged operations closely resemble other transactions that are the target of an
indictment unsealed here last week as part of the international investigation into alleged
money laundering by Russian organized crime.
on Bank Transfers Could Grow
The Wall Street Journal Europe By Paul Beckett and Michael Allen,
... Bank of New York is facing a $1 billion lawsuit from depositors of Russia's
defunct Inkombank, who allege that the New York bank helped Inkombank managers loot
hundreds of millions of dollars from their institution by serving as a business connection
to the West. ... Emanuel Zeltser , one of the plaintiff's attorneys, said,
"Over a hundred thousand people, primarily old people, lost their life's savings, and
the purpose of this lawsuit is to retrieve at least some of it."
Russian bank clients sue BoNY. Depositors claim
New York bank knew about fraud
USA Today 10/08/1999 by James Kim
Depositors of a failed Russian bank sued the Bank of New York on Thursday, charging
that BoNY helped the Russian bank defraud customers. The Russian bank, Inkombank, had its
banking license revoked by Russian officials in Moscow a year ago. ... ... The depositors'
attorney team includes Emanuel Zeltser , who has tangled with Inkombank in another
lawsuit. That suit produced reams of evidence that might be used in this action.
in Money-Laundering Probe...
The Wall Street Journal By Paul Beckett and Michael Allen
... Bank of New York is facing a $1 billion lawsuit from depositors of
Russia's defunct Inkombank, who allege that the New York bank helped Inkombank managers
loot hundreds of millions of dollars from their institution by serving as a business
connection to the West. ... ... Emanuel Zeltser , one of the plaintiff's attorneys,
said: "Over a hundred thousand people, primarily old people, lost their life's
savings, and the purpose of this lawsuit is to retrieve at least some of it."
Russia's Inkombank Depositors Sue Bank Of New York
For $500 Million
THE WALL STREET JOURNAL, October 7, 1999
Several depositors of Russia's Inkombank
filed a lawsuit Thursday against Bank of New York Co. alleging the U.S. bank assisted the
Russian bank's principals in embezzling $1.5 billion in assets. The depositors' suit,
filed in federal court in Manhattan, seeks $500 million in damages. Inkombank, which
collapsed in October 1998, was one of the Bank of New York's (BK) most profitable
customers. Bank of New York has suspended Natasha Gurfinkel Kagalovsky, the executive who
helped Inkombank in the U.S., in connection with a federal investigation into possible
money laundering through accounts at Bank of New York.
attorney now heads bank agency
BRIDGE NEWS, Oct 1, 1999 By Heather
The head of the legal department of the
now-defunct Inkombank--a bank proclaimed as being fraudulent by the Central Bank of Russia
is now heading Russia's Agency on Restructuring of Credit Organizations (ARCO). Alexander
Turbanov led Inkombank's legal department in 1993 before being appointed Central Bank
deputy chairman, according to Inkombank's telephone directory at the time and those who
knew him. The Central Bank of Russia revoked Inkombank's license in October 1998 for
violating several laws and the rules of the Central Bank.
CNN Aired September 28, 1999 - 6:30 p.m. ET
New allegations of money laundering through the Bank of New York tonight.
"... who knows where it's going to end up? It's certainly not going to stop at
Natasha Gurfinkel's level" says Zeltser, Director of the American Russian Law
TIME MAGAZINE, page 1. BY JOHANNA
MCGEARY, SEPTEMBER 27, 1999
On April 23, 1996, under the
letterhead of the venerable bank founded by Alexander Hamilton, which made the very first
loan to the fledgling U.S. government in the 1780s, Gurfinkel wrote a fulsome letter to
Federal Reserve chairman Alan Greenspan, urging the Fed to let Inkombank open a
representative office in the U.S. Never mind that 14 months earlier some of the bank's
largest shareholders had filed suit charging Inkombank with outright theft of $40 million
in capital. Or that just a month before, the Russian central bank had issued a harshly
critical audit of Inkombank irregularities.
Allegations help topple once
elite Russian bank
USA TODAY By James Kim Sept. 24, 1999
Inkombank, once an elite Russian bank that many hoped would lead
the nation into a new era, had its license revoked by banking officials in Moscow last
year. Some felt it was simply a victim of the country's financial crisis. But Inkombank --
which was a top client of the Bank of New York (BoNY) -- also was derailed by allegations
that it defrauded shareholders, aligned itself with organized crime groups, engaged in
money laundering, operated illegally in New York and threatened witnesses.
Full Speed Ahead
in Fog of Russian Economy, Bank of New York Hit a Shoal
The New York Times, September 23, 1999 By MICHAEL R.
GORDON and NEELA BANERJEE
... the Bank of New York was one of a number of banks that did pick up the account,
displaying an aggressiveness that has made it the leading American bank in Russia. There
is no data available that establishes a clear link between the success of the bank's
settlement business in Moscow and the money that flowed through bank accounts in London
and New York that are under investigation. What is clear is that the Bank of New York led the field, with clients that included major Russian
banks like Inkombank, Menatep and Sberbank, which is owned by the Government.
Inkombank's Questionable Past
USA Today by James Kim 08/30/1999
BoNY helped one of its top Russian clients, Inkombank, win regulatory
approval to sell its stock in the USA as American depositary receipts (ADRs) in 1996. At
the time, however, Inkombank's financial status was being challenged in Russia.Then,
Russian bank regulators were investigating the bank. A 1996 report by Russia's central
bank found that Inkombank had violated numerous laws and accounting rules. The report said
the bank inflated its income in 1995 by "tens of billions of rubles."
Tape: Bank of N.Y. Bigs Knew of Russian Scam
The New York Post 8/28/99
By AL GUART and JESSE ANGELO
A Bank of New York veep indicated
in 1996 that he and his bosses knew Russian bank officials were using BNY to steal from
their depositors, according to a transcript of secretly taped conversation. BNY has been
at the center of a massive money- laundering probe as agents from the FBI, IRS and
three foreign countries to try to determine if the Russian mob laundered up to $15 billion
through its accounts. According to the transcript, which is to be part of a planned suit
against BNY, bank VP Vladimir Galitzine apparently knew officials at the now-defunct
Inkombank were ripping off its depositors.
time for money launderers
USA TODAY By Tom Lowry Fri., Aug. 27, 1999
Explosive allegations that the Russian mob laundered as much as $15 billion here
through two leading banks underscores troubling fissures in the U.S. banking system. ...
... Inkombank, once one of Russia's largest banks that allegedly had ties to organized
crime, had correspondent banking relationships with Citibank, Bank of New York, Republic
National Bank and Bankers Trust among others, according to court documents filed in a
lawsuit brought by the bank's Western shareholders against the bank and its lawyers.
Russian regulators declared the bank insolvent last year.
Probe Into Bank of New York Accounts Includes
Links to Russia's Inkombank
THE WALL STREET JOURNAL,
August 24, 1999 By PAUL BECKETT
Federal authorities probing possible money-laundering through accounts at
Bank of New York Co. are examining the U.S. bank's longstanding relationship with Russian
bank Inkombank, people familiar with the matter say. Inkombank, now in liquidation, was
one of Bank of New York's most profitable customers. Bank of New York established itself
as Inkombank's correspondent bank in 1992 to facilitate international wire transfers.
Killing on Mob
The New York Post 08/21/99 by Al Guart
The Bank of New York raked
in up to $240 million a month in fees as its crime-ridden counterparts in Russia used the
bank to loot depositors and launder billions, documents show. ... ... Meanwhile, BNY will
be slapped with a massive class-action lawsuit in the next few weeks for "aiding and
abetting" Russian organized crime in ripping off shareholders and depositors of up to
100 Russian banks, lawyer Emmanuel Zeltser said.
Laundering Laundering Puts Focus on Bank Insiders
Chicago Tribune. 08/20/1999
Despite a government requirement that banks report suspicious account
activity, bank insiders bent on money-laundering or other criminal pursuits can
still beat the system, experts say. Bank of New York Co., the nation's 15th-largest, has
suspended two executives following an investigation into accusations that Russian mobsters
holding accounts may have laundered billions of dollars.
Bank in Laundering
Inquiry Courted Russians Zealously
The New York Times. August 20, 1999. By TIMOTHY L.
O'BRIEN with RAYMOND BONNER
The Bank of New York, in an effort to expand a lucrative
business in Eastern Europe over the last several years, aggressively pursued relationships
with Russia's largest banks, a strategy that might have led to the embarrassing questions
about money laundering now being posed by Federal investigators. ... ... One of
[Kagalovsky's] best customers was Inkombank, a fast-growing Russian bank that handled more
than 250 payments a day through the Bank of New York. Inkombank brought its business to
the Bank of New York from the Republic New York Corporation in 1992 because Ms. Kagalovsky
promised to be less vigilant than Republic about the way Inkombank's accounts were
handled, according to Emanuel E. Zeltser, once ...
Lawyers Hired as Spin Doctors for Russian Mob
Moscow Telegraph, April 30, 1999
A New York law firm, Christy & Viener, is
being sued in US District Court (Southern District) by western shareholders and creditors
of a Russian bank, Inkombank. Plaintiff-shareholders allege that the firm's senior, 75
year old Arthur Christy, helped Inkombank's management to defraud the Western investors
and launder their funds through an elaborate network of offshore companies. The motive?
The best of them all - Inkombank's boss, V. Vinogradov, grumbled that last year alone
Inkom paid Christy over 1.5 million USD ...
Neutralizing Whistle Blowers
Moscow Telegraph April 11, 1999 by Maria Berdnikova
RUSSIAN MOB-NEW YORK BAR, JOIN FORCES?
THE DECLINE AND
FALL OF VLADIMIR VINOGRADOV
Radio Liberty December 22 1998; by
Julie A. Corwin. The rise of former Inkombank President Vladimir Vinogradov to the top of
Russia's financial and political circles was rapid, but his fall was even quicker. In a
little over two months, Vinogradov went from being one of Russia's handful of
"oligarchs," a small elite of powerful businessmen and financiers who reportedly
rule the nation, to the disgraced former head of a financial institution on the brink of
Gag Order of Judge Duffy
Moscow News December 17, 1998 by: EMILY TOPOL
Is this really a "crisis or a gigantic theft camouflaged as
Testimonial With a Rope Around one's Neck. Inkombank's
Ex-Boss Strikes the Deal of his Life
Moscow Telegraph July 6, 1998 by Emily Topol
For the past three years Doudkin, who was named amongst defendants
in the proceedings in US Federal Court, despondently avoided participation in this
litigation. According to an Inkombank source, who understandably requested to remain
incognito, Inkom's bosses were not too eager to expose their shame, allowing Doudkin to
remain silent. No longer - this is a do or die situation - for Doudkin that is. He must
now officially deny all that he ever said, signed, did or was. An alternative? Doudkin
knows the alternative too well, the source says - this is a testimonial with a rope around
one's neck - he says what he must or forever holds his peace ... in a better world.
Duping US Companies?
Thursday, June 5, 1997, Intercon International. Intercon has recently
obtained documents from legal offices representing the rights of aggrieved shareholders of
Inkombank, one of Russia's largest commercial banks. The documents allege that the
management of Inkombank has been engaged in massive fraud and embezzlement against
shareholders, creditors, and various Western companies, as well as being involved in drug
How Inkombank Duped
Russia Bulletin. May 30, 1997 By Natalia Vdovina
Pending in the Federal Court of the United States in the
stage of pre-trial discovery is civil matter No. 95 ___ , a lawsuit of Foreign Investors
Portfolio Management, Inc. (FIPM) against the Russian bank, Inkombank. FIPM, which
represents the interests of three Western firms, the shareholders of Inkombank, accuses
the latter of unlawful conduct described as fraud.
KILLED ON THE EVE OF
MARCH THE 8TH DAY
ITAR-TASS. March 10, 1997
Ms. Kompasova was shot five times point blank on the eve of the March the
Eighth Day which caused a turbulent resonance in this city. ... ... Petition
emphasizes that behind the hired killers stand the private interests of the confectionery
factory "Babayevskaya" and Inkombank.
In Bed with a Banker
MK Daily September 25, 1996, by: Olga Kedrin
The life paths of a Byelorussian prostitute and a Russian banker crossed on the
other side of the ocean, in America. Had they not, Janna Boulakh would still be soliciting
clients on Brighton Beach and Inkombank's First Vice-President, Alexei Kouznetsov would be
spending all of his time thinking of his bank's prosperity. Today both can say "We've
made it!" The "sweet couple" has the world at their whim, from extravagant
villas to lavish limousines. This opulence is founded upon the moneys of Inkombank's
clients, even though the clients themselves are not exactly aware of that
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