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Charges in Russia probe
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October 5, 1999: 7:39 p.m. ET
Justice unseals six indictments after probe into money laundering scheme
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WASHINGTON (CNNfn) -- The Justice Department Tuesday unsealed six indictments stemming from its investigation of alleged Russian money laundering through the Bank of New York, the first charges filed in connection with the probe.
The three count indictment -- filed under seal in federal court in Manhattan on Sept. 16 and unveiled Tuesday -- charges three individuals and three companies with illegally moving about $7 billion through accounts at the bank.
The endictments themselves stem from an ongoing, highly publicized investigation into allegations of money laundering, where as much as $10 billion in illicit funds was funneled from Russia through business accounts at the Bank of New York and other financial institutions in the U.S. and abroad.
Among those charged in the case is Peter Berlin, a Russian emigree who ran the Benex and Becs corporations. He was married to Lucy Edwards - a vice president in the bank's Eastern European division who was also indicted. Edwards was dismissed from Bank of New York last month.
Serious accusations
The indictment charges in 1996, Berlin opened separate accounts in the name of Benex and BECS at a Manhattan branch of the Bank of New York. The indictment accuses Berlin and Edwards of being signatories on the BECS account.
Also charged is Aleksey Volkov, president of Torfinex Corporation. The indictment alleges Volkov and Berlin were the signatories on the Benex account. The indictment charges that the defendants conspired to illegally transmit funds and receive deposits through the Benex and BECS accounts at the Bank of New York (BK).
If convicted on all charges, Berlin and Volkov face maximum prison terms of 15 years and fines of $750,000 or twice the gain resulting from the offenses. Edwards faces a maximum of five years in prison and fines. The corporations face fines of up to $1.5 million each, or twice the gain or loss resulting from the offenses.
Additional charges?
U.S. Attorney Mary Jo White, in announcing the indictments, said the investigation is "very intense and broad," adding that additional charges will be brought in the future. "Many questions about the various sources of the monies flowing through the accounts at the Bank of New York remain to be answered," White said.
Assistant FBI Director Lewis Schiliro said the probe "is in its early stages. As this investigation has progressed, cooperation from the Russian authorities has been forthcoming and has been helpful," Schiliro said.
Reached late this afternoon, a spokesman for the Bank of New York said the company has not been charged with any wrongdoing and "continues to cooperate with investigators."
Barry Kingham, a lawyer for Berlin and Edwards, said the couple who live in London will "appear in whatever court they're required to appear in.''
"We cannot comment on the indictment except to state that we will respond at the appropriate time in the appropriate forum,'' he said.
He said he could not comment on whether the couple will fight extradition. It could not immediately be determined who represents Volkov; prosecutors believe he is not in the United States.
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.
-- from staff and wire reports
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