NEW YORK (CNNfn) - The Bank of New York Friday fired Lucy Edwards, one of the two senior executives it had suspended following allegations that Russian mobsters had funneled billions in illegal funds through U.S. and European banks.
Edwards, the wife of Peter Berlin who allegedly opened accounts at the Bank of New York on behalf of Benex Worldwide Ltd. -- the company suspected of receiving and depositing the illicit funds -- had been suspended last week along with Natasha Kagalovsky, the wife Konstantin Kagalovsky, former deputy of the now-defunct Menatep Bank, which closed its doors after Russia's ruble crisis erupted in August 1998.
Cary Giacalone, a Bank of New York spokesman, didn't elaborate on the action, only confirming that the bank had indeed relinquished Edwards from her duties. "We can confirm she was let go," he said. According to a Dow Jones Newswire story, sources close to the investigation said Edwards was fired for alleged gross misconduct, violations of the bank's internal policies, falsification of bank records and failure to cooperate.
Bank of New York's swift move on Edwards is the latest in a bizarre series of convoluted and confusing stories about a money laundering sham from Russia in which billions of illegal funds were diverted into U.S. and European banks. So far no one has been charged with any wrongdoing in the affair, in which as much as $15 billion funds was reportedly diverted, then "cleaned" by Russian mobsters. Much of the money is said to have come from aid given by the International Monetary Fund.
Money laundering typically involves taking large cash deposits from individuals or businesses when the money is either suspected or known to have been obtained from illegal activities or for illicit purposes. The Bank Secrecy Act requires all U.S. banks to report cash deposits of $10,000 or more, as does the Money Laundering Act of 1986.