NEW YORK (CNNfn) - U.S. authorities suspect that Russian organized crime groups are actively trying to infiltrate the U.S. financial system by placing "moles" in key positions at major Western banks and securities firms.
In a report by the Wall Street Journal Thursday, the authorities said the criminals set people up with jobs to help them launder money and conduct other illegal transactions.
"They'll put people in sensitive positions in the bank so they can utilize them at some later point," a law-enforcement official who investigates Russian rings in the United States told the paper.
Money laundering is an act intended to disguise the origins of the money procured from illegal activities. Part of the process involves depositing the money in numerous legitimate bank accounts, making it difficult to trace. U.S. law mandates that banks report cash transactions of $10,000 or more.
The U.S. authorities based their concerns on information from informants and other confidential sources but not on public evidence, which they said is scant. The probe is part of a broader investigation into a number of alleged money-laundering cases at prominent U.S. banks.
Most recently, authorities have been investigating whether Russian immigrant Peter Berlin's accounts at the Bank of New York were used to launder as much as $10 billion. Berlin was married to a Russian-born vice president of the bank, Lucy Edwards, who was fired last week for alleged "gross misconduct," including the falsification of bank records and failure to cooperate with investigators, people close to the case told the Journal.
They said Edwards may have vouched for Berlin, who allegedly opened accounts related to Benex Worldwide Ltd., a private company through which Russia's International Monetary Fund representative, Konstantin Kagalovsky, allegedly arranged to funnel billions in IMF money earmarked for Russia's transition to a capitalist economy.
Authorities also are investigating whether the marriage between Berlin and Edwards, of which the Bank of New York may not have been apprised, was arranged for the purpose of furthering the alleged money-laundering scheme, a person familiar with the investigation told the Journal.
Edwards and Berlin have not been charged with any crime and both deny any wrongdoing.
In another case, a BankBoston customer-services representative was indicted on charges that she helped a group of Russian businessmen launder what undercover agents posing as narcotics traffickers represented to the Russians as drug money, the Journal reported.
The agents gave more than $2.7 million in cash to the businessmen, who were based mostly in New York. In return, they sent the agents checks from more than 64 bank accounts, a number of which were from the West Newton, Mass., BankBoston branch where the customer-services representative, Oksana Galchanskaya, worked, according to court documents, the paper said.
The lawyer for Galchanskaya said she wasn't involved in the alleged scheme and didn't know the alleged launderers.
A number of accounts at other U.S. banks are believed by authorities to be connected to the case, the paper said. These include business or individual accounts at Citigroup Inc.'s Citibank, First Union Corp.'s CoreStates Bank, Chase Manhattan Corp.'s Chase Manhattan Bank.