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BoNY executive resigns
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October 12, 1999: 4:59 p.m. ET
Natasha Kagalovsky quits amid ongoing money-laundering allegations
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NEW YORK (CNNfn) - One of the central figures in the ongoing investigation into alleged Russian money laundering at the Bank Of New York tendered her resignation Tuesday, indicating she was the target of "baseless rumor."
Natasha Gurfinkel Kagalovsky, a senior vice president of the Bank of New York's Eastern European division, had been on paid leave since Aug. 18 shortly after accounts of the alleged money laundering became public.
Her departure comes one week after the U.S. Justice Department unsealed six indictments related to the continuing investigation into allegations of money laundering - and the use of Bank of New York as one of several destinations for as much as $10 billion of the ill-gotten gains. Bank of New York itself has not been accused of any wrongdoing.
Among those charged in the case are Peter Berlin, a Russian émigré who ran the Benex and BECS corporations, and Lucy Edwards, his wife and a vice president in the bank's Eastern European division. Edwards was fired by the Bank of New York in early September.
The indictment charges that 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.
Kagalovsky's attorney Stanley Arkin told CNNfn Tuesday that "the Bank of New York let her twist in the wind." Neither the Benex account nor Lucy Edwards who oversaw that account were in Natasha's division. Natasha had no involvement with the Benex accounts."
In her letter of resignation Kagalovsky wrote that since going on leave she has been "living in professional limbo, being subjected to painful baseless rumor. Not once during this investigation...has the Bank seen fit to publicly or privately defend and let it be known that there is not one negative thing to say about me or how I performed my job."
In a brief statement, Bank of New York spokesman Frank Scarangella said "the bank acknowledges her resignation and we wish her well." He did not elaborate on any other details of the investigation.
Natasha Kagalovsky is the wife of Konstantin Kagalovsky, a former International Monetary Fund representative in Moscow and one of the central figures under investigation for the alleged money- laundering scheme. She was suspended with pay in August after the money-laundering allegations were made public.
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Bank of New York
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