Russia Customs sues Bank of New York
In the middle of May, a USD 22.5 billion lawsuit against the Bank of New York for money laundering was filed by Russia, which reopened a scandal rocking the world of finance in the end of the 1990ies.Â
According to Federal Customs Service lawyer Maxim Smal, from 1996 to 1999 the Bank of New York took part in a money laundering scheme. This caused Russia suffer USD 22.5 billion worth of harm.
A series of Russian money-laundering scandals began in 1998, when the tax authorities of the United States and the Federal Bureau of Investigation (FBI) launched a probe into the laundering of USD 7 billion through a Bank of New York account.
Russian-born American residents, former Bank of New York vice president Lucy Edwards and her husband Peter Berlin, opened the bank account in 1996 to allow billions of USD in funds to be channelled out of Russia escaping paying taxes. The investigation led to vast media coverage and a series of related money-laundering probes all over the world.
The Bank of New York rejected the new case and claimed that it had not seen the complaint. It also said that, taking into account its knowledge and experience, the suit is totally without merit, and even frivolous, therefor the bank is going to defend it vigorously.
It also should be taken into consideration that the events related to the lawsuit happened more than 10 years ago and were resolved by the company. In November 2005, the bank paid USD 38 million in order to settle the case in a US court – USD 12 million was a compensation to victims and USD 26 million was a fine.
In July 2006, Berlin and Edwards pleaded guilty to conspiracy in money laundering and other crimes, and they were sentenced to half of a year of house arrest and fines that accounted for USD 725 000.
The Russian customs service’s lawyer Smal confirmed that the new case was based on money laundering activities caried out by Berlin and Edwards via their account in the Bank of New York account with the damage of USD 7 Billion. As to the origin of the figure of USD 22.5 billion, Smal made little comment saying just that this is how they evaluate the damage.
The Bank of New York is the oldest bank in the USA with assets of USD 103.4 billion.