Russia Wields RICO Law Against U.S. Bank

Racketeering Law Applied In Moscow Court In $22.5B Lawsuit Against Bank Of New York Mellon

(AP)  Russian authorities are hoping to make legal history by applying an American racketeering law in a Moscow court as they seek to recover billions of dollars in damages from the Bank of New York Mellon.

Hearings resume Monday in the Russian Federal Customs Service's $22.5 billion lawsuit against the bank, which was at the center of a major money-laundering scandal in the late 1990s.

The lawsuit couldn't come at a more sensitive time, as U.S. banks are facing substantial writedowns following the subprime mortgage crisis.

In a highly unusual move, Russia has brought the case under a famous U.S. law used to fight organized crime, and both sides have drawn on the expert opinion of some of America's best-known legal minds in preparing their case.

The Russians have brought in Harvard law professor Alan Dershowitz and Robert Blakey, one of the authors of the 1970 statute on racketeer-influenced and corrupt organizations, or RICO. Bank of New York Mellon lawyers are fielding Richard Thornburgh, a former U.S. attorney general and Pennsylvania governor.

The RICO statue has never been successfully ruled on in a foreign court, according to lawyers. If the Moscow court agrees to apply the U.S. law, some lawyers predict it would open the floodgates for a slew of similar claims.

"Corporations would be buried under RICO claims in Russian courts in the next six months," said Ivan Marisin of Clifford Chance, the bank's lead counsel.

Others are less convinced it would set a precedent, given the unique nature of the suit.

In one of the world's best-known banking scandals, Lucy Edwards, a Russian emigre and a vice president at Bank of New York, and her husband Peter Berlin, were accused of illegally moving $7.5 billion of Russian money into accounts at the bank, before sending the money to accounts worldwide.

The pair pleaded guilty to conspiracy to launder money. They were fined, put under house arrest for six months and given suspended sentences.

The Russian authorities are claiming lost tax revenues on those transfers.

Bank of New York, which later merged with Mellon, was never charged with money laundering activities. It paid a non-prosecution fee of $14 million to U.S. federal prosecutors in 2005.

But two years later, American litigation lawyers - working for a 29 percent contingency fee - filed the Russian claim, based on the RICO provision that they can claim treble the amount of estimated damages.

Bank of New York's lawyers argue that RICO can only be applied when there is proof of criminal activity. In this case, they argue, the bank was not charged with a crime, and Edwards and her husband admitted only to conspiracy to launder money.

But Steven Marks of the Podhurst Orseck law firm, one of the U.S. lawyers for the Russian side, claims that the 2005 settlement was an admission of guilt and that the civil RICO law requires a lower burden of proof.

Russian efforts to reach a settlement have been rebuffed, the plaintiffs say. Marisin, the lawyer for Bank of New York, told a hearing in early July that the plaintiffs approached the bank before the case was filed, asking for a much lower amount compared to the damages currently being sought.

Analysts and legal experts are divided on the merits of the case.

Maxim Kulkov, a Russian lawyer not acting for either party, says the Russian side's arguments are "pretty convincing." Others insist the Russian case is weak and was being brought in Moscow because Russian courts often rule in favor of the government.

In any case, Bank of New York says it does not intend to pay out in the event of an adverse ruling, and has not set aside a provision for the claim.

Ken Thomas, an independent economist retained by the Russian side, warned in a recent letter to U.S. Federal Reserve Chairman Ben Bernanke that an adverse ruling could damage the bank's financial standing and pose a serious systemic risk to U.S. financial markets.

[jmurrieta1]

"Bank of New York Mellon executive Thomas A. Renyi topped the Post-Gazette''s Fortunate 50, the second consecutive year an executive from the bank led the list of the region''s highest-paid executives.

Mr. Renyi, the bank''s executive chairman, was paid $28.5 million in 2007, $1.5 million more than the runner-up, Alcoa Chairman and Chief Executive Officer Alain J.P. Belda.

Bank of New York Mellon CEO Robert P. Kelly, the previous year''s champ, fell to No. 4. He and Mr. Renyi were two of five Bank of New York Mellon executives in the Fortunate 50 Top 10."


Nobody can say the lying swindlers don''t pay themselves very nicely!

Let''s hope they get to count the birches in Siberia.

[patriot12436]

It is about time someone started holding the criminals liable. They say they won''t pay up if they lose, let the Russian govt seize their property. Time to hang all these criminals.

[smurfcrusher]

nicezoo1 has been reported for SPAMming in violation of Terms of Service.

[wogerwabbit]

It''s a shame that America is so corrupt we have to count on the Russians to do the job.

[Renegade.Rivers]

It is believable that after all these years, the Russians are doing something that the American prosecutors have never done, that being prosecute the big banks under the RICO act. The federal prosecutors have known for years that big banks, such as the Mellon bank,and Citibank have been laundering money for the mafioso, and various enterprises of the CIA, including arms deals and narcotics trafficking. Yet, to date, no federal prosecutor has ever went after one of the said banks for their illegal money laundering.

In an article written by James Petras, Professor of Sociology at Binghamton University in Binghamton, New York in 9-02, he states; "In other words, an incomplete figure of dirty money (laundered criminal and corrupt money) flowing into U.S. coffers during the 1990s amounted to $3-$5.5 trillion. This is not the complete picture but it gives us a basis to estimate the significance of the "dirty money factor" in evaluating the U.S. economy. In the first place, it is clear that the combined laundered and dirty money flows cover part of the U.S. deficit in its balance of merchandise trade which ranges in the hundreds of billions annually."

Also, Senator Carl Levin summarizes,"Estimates are that $500 billion to $1 trillion of international criminal proceeds are moved internationally and deposited into bank accounts annually. It is estimated that half of that money comes to the United States".

Yet, not one bank has ever been prosecuted under RICO.

[nojoy01]

Well, this is interesting. And an open invitation for massive confusion. But my primary question is: Can the citizens of the USA file a class action lawsuit against the current ''federated government'' as the successor in fact to the former ''union of soviet socialist republics'' for recovery of the Trillions of $$ spent to prevent the former government from accomplishing its stated goal of world dominion during the ''cold war'' under the RICO act??? ''Course, you can sue anybody at anytime for almost anything and win, but collecting is another story.

[pirmin3]

ROFLMAO. This is just too good.

[l8c6]

Wow, maybe if the basis of our constitution and laws are applied around the world "american" global corporations will not be able to break the law overseas anymore like they have been for decades and with globalization have been doing in the U.S. itself. What a slap in the face when Russia enforces our laws that our hoe politicians pimped by global capital will not.

[l8c6]

Ken Thomas, an independent economist retained by the Russian side, warned in a recent letter to U.S. Federal Reserve Chairman Ben Bernanke that an adverse ruling could damage the bank''s financial standing and pose a serious systemic risk to U.S. financial markets.

Well, isn''t it something when foreign countries are becoming the system of checks and balances. Should this country turn to it''s military more and more to to deal with such cases, it''ll be clear who the evil empire is.

[l8c6]

Also, Senator Carl Levin summarizes,"Estimates are that $500 billion to $1 trillion of international criminal proceeds are moved internationally and deposited into bank accounts annually. It is estimated that half of that money comes to the United States".

Yet, not one bank has ever been prosecuted under RICO.

Posted by renrivers



That spells broken and corrupt.

[dougmsbbs]

We have long passed laws and forced them on the rest of the world. It''s about time someone used them in reverse. I do not know anything about the merits of the case, but it''s nice to see them try. I do worry about the Russian courts, however. They are not known for ruling on the merits of a case. Putin has long been known to use the courts however he wishes to give legitimazation to his takeover of companies. If they can keep it on the up and up, go boys!

[edintex]

Since the trial will be in a Russian court that historically rules in the "Russian governments favor", the outcome would not be accepted by anyone outside of Russia. To do so would be like trying to get "accurate & unbiased" information from their government run newspaper.

The bigger story should be the two TRAITORS from Harvard; law professor Alan Dershowitz and Robert Blakey. They know what could happen to the US banking system by the frivilous lawsuits, yet they will assist Russia anyway.

PLEASE PLEASE PLEASE president Bush, if you could do just ONE THING RIGHT before you leave office, PLEASE put Alan Dershowitz and Robert Blakey on the "do not fly" list so they cannot come back to the U.S. after a trial. Those comrades BELONG in Russia.

[walt1944-2009]

It''s about time that someone held somebody accountable for the mess the world is in financially and you all know it is the BANKS, allied with BIG BUSINESS.

Everybody seems to forget that anybody who is in business is, under the financial atmosphere of the neocon Fascist Nazi Republicans, out to make a profit, A HUGE PROFIT!!! Banks, lending companies, and utilities charge "usuary" fees which are pure PROFIT to them and at YOUR EXPENSE! It''s all a big racket designed to make the rich richer and to keep the poor, POOR!

Incidentally, anyone who thinks that sinply because the trial is being held in a Russian court, means that automatically the Russian government will win, had better explain to me how different that is from a trial held in the US(SA) when BIG BUSINESS or a BANK is the defendant here? How many of our "judges" are unbiased in handing down judgements in trial cases where a BANK or BIG BUSINESS is ABSOLUTELY at fault??

And, in the rare cases where BIG BUSINESS or a BANK loses, they can turn right around and go thru the appeals process for years. They have the money for legal fees( which they can deduct from their tax returns!), and they have the clout, so they go thru the legal process until they get a ruling favorable FOR THEM!

What chance does the average citizen have????

NONE!!!!!!!!!!!!!!!

It tells you who really runs this country and it''s not US!

SIG HEIL, BUSH!!!!!
sig heil, TOTALLY MORE OF THE SAME, "SURGE" McCain!!!!

[emperorlotku]

Can our career politicians that have squandered America''s economic vitality by selling their votes to the banking system and corporate interest groups be prosecuted under the RICO act?

[sandy19731]

Headline suggests this is against USBank not New York Mellon.
Interesting case. This should keep the lawyers busy for awhile.

[credibility2]

Isn''t this like calling the pot black? If the bank hasn''t been criminally charged in either a US or world court and some associates independently took it upon themselves to launder money, how can RICO be applied in this instance? And for Dershowitz and Blakey to be on the ready to profit from this, even if they only recoup miscellaneous expenses and a guaranteed legal fee regardless of the outcome, shows how desperate these two attorneys are to go wherever the money is without having any integrity or principle. There''s plenty that Russia can be sued for just on the merits of their continuing atrocious human rights violtions. I think Dershowitz and Blakey should lose their law licenses.

[smurfcrusher]

Russians have quite a reputation for organized crime.

Apparently they haven''t learned it makes them look like dirt in the eyes of the world.

[mcv57]

Although Russia has a history of breach of contract (civil); America and its organized crime has a history and long, deep track of instill government corruption.

Hypocracy will be the theme; and criminal financial activity will be the prosecution. If media coverage is allowed, this be the greatest public exposure to American government and corporate corruption; and deteriorating foreign trade.

I want front row tickets to this circus. It''s going to be the best soap opera the world has ever witnessed.

[stevador39]

This is great. If you think about it, it says the banking system is criminally corrupt. It also strongly indicates that this government is supporting a criminally corrupt system against the interest of the American people. Estes Kefauver, where are you, now that we need you? (Kefauver was the Tennessee Senator appointed by the U.S. Senate to prosecute organized crime in the U.S. in the 1950''s)

[antoniof123]

Neo cons you have done too much damage to the country and to the world.

It will be a blood bath for you in congress and the senate.

[sharncedar]

This is free trade, Russian style. Meaning they cheat, like every other country except the US, which perversely cheats against itself.

[apprxam]

Nixon violated Bretton-Woods in 1972, denying France and other access to their gold reserves, defaulting on debts the U.S. owed. During the 90''s, BushI/Clinton insisted that Russia continue economic reform, even though it was killing Russia''s culture, starving Russian people and facilitated the cleptocratic period in which the Oligarch 7/8 looted the nation government.

Also, the Bank of New York, which really wasn''t a bank, hid money from the CIS governments, probably with ex-KGBers in the U.S.

Now if only the U.S. Justice Dept could follow suit, or are they still controlled GHW Bush.

[eddom949]

Everybody chip in 90 bucks! All 250 million of us! ;)

[Michael Arnold]

This is HILARILOUS! Between the Russkies and the Mexicans, we''re gonna have nothing left (but a bunch of ransacked empty houses!)

Thank you republicans and democrats, you''re the greatest!

[patriot12436]

eddom949
Why should tax payers bail out these criminals. They pay their ceos millions every year and they now screwed the soviets. Let then soviets win againstthem in court and collect from them.

[patriot12436]

credibility2
RICO applies to organized crime, if these bankers aren''t organized i don''t know who is.

[apprxam]

PAtriot, the only answer to this be the wholesale extradition of anyone: (1)charged with money laundering, (2)any bank manager not naming names and dates and orders from corp.,(3)10% of all bank executives and 100% of investment bankers above the rank of assist VP, (4)All CEO''s, no matter the industry who''s made a lifetime total of $10 million since 1992, (4) Any CEO in any financial institute, and I mean any!!! (5)all white-collar criminals associated with financial institution with internation connections [BNY,CitiGrp,JPMCHASE] (6) All Ivy League, top tier or 2/3 tier dept heads, chairs, emirati, Prof, Assoc Prof and Deans of Business schools and economic, free-market, think tankers since 1980.

And that Texas as*hole, Phil ''Ph*ckin'' Gramm.

Enough is enough, already. The CEO Ninties are finally coming to an end.

[apprxam]

Send Gramm, Kissinger, Ollie North and the other a-holes to Iraq first, then to the Hague to join Charles Taylor and the jerks in Zimbabewe & the Sudan.

Then, if he doesn''t have his 20th heart attack by Jan 10, 2009, Prick Cheney to Afghanistan to look for Bin Laden on the front line with the USMC.

[edintex]

ole Edintex blaming the lawyers. Some of these guys will never, ever, metamorph from their cocoons.
Posted by BajaJohn1 at 05:38 PM : Jul 27, 2008

Thats "GOOD OLE EDINTEX" to you Baja!

[apprxam]

The Chief of BP flees Russin jurisdiction; RICO suits filed against an American bank, military activity in Cuba for the first time in about 16 years. The nationalization of selected foreign companies can''t too far behind. The fact that no one is going to do a d*mn thing about it should strike Bush & Crime Friends as ironic. Maybe? The ''Soul-of-Putin'' is rising to the surface, and after we gave them the moral authority to crush the Chechnian Rebels from breaking away. Who''d thought that placing missiles at their doorstep; egging on the Ukranians; siding with the Georgian government over Ossettia would back-fire?

What type of policy papers are this administration reading? AEI? Heritage Foudation? The Krystols. Yeah... to the spreading of democracy. Next stop, Canada.

[patriot12436]

apprxam
I agree, i hope this is only the beginning to start cleaning house and will continue to the highest levels.

[patriot12436]

sharncedar
Do not deceive yourself we have as much corruption as any other country.

[apprxam]

On another blog [far, far away] I''ve heard it said that after Iraq & Iran, that Russia will be the last oil rich country to be under the thumb of either the U.S. or China. That their was a concerted effort to weaken Russia during the 90''s so that their oil could be "democratized", too. At first I didn''t believe it, but this guy, Cheney, is capable of anything as long as he and his weak friends in D.C. & Texas don''t have to get their hands dirty. These men are greedy, lying cowards.

Due to International Resources, international Law WILL Cease Criminals free Travel thruout the Earth! And then Islamic Law WILL be applied to these Criminal Factions, which will enable the police Authority''s to Administer Imediate Punishment, and then call the Coriner to retrieve the spent carcus. Just because Earhly resources are DEMANDING a limited expence be used to house people that are REPEAT Offender''s & Wicked,... and do not care for others God given rights!

[apprxam]

This is HILARILOUS! Between the Russkies and the Mexicans, we''''re gonna have nothing left (but a bunch of ransacked empty houses!)

Thank you republicans and democrats, you''''re the greatest!

Posted by tvtoy1000

I swear that this would be the funniest thing I''ve ever heard if only it wasn''t so da*n scary!

[apprxam]

I hope there will still be Chilis around when the AMerican economy falls aparts and the Chinese, Russians, Volvo and the Mexican Resorts takes over our failing, lying banks. Argentina is having a f*ckin'' field day laughing at us right now. We should be ashamed ourselves in this country. For nearly seven years we''ve been killing Iraqis and chasing ***, distracted by the RePugnaCons and Phil ''phuckin'' Gramm and his friends has been robbing us blind. [Dems ain''t sh*t either. We are begining to learn that NAFTA was just B.Clinton''s & the other Third-Wayers/DLC way of paying off rich people debts. It''s time that the people take over GM & Ford plants, implement usuary laws, freak the courts and their bullsh*t decisions favoring rich companies, free rich peoples'' from our money and property]

[impeach__w]

Why can''t RICO be used on the Bush administration. We have a Crime! Many of them, which were not concocted by only one senior official.

[rbburnerjr]

Watch Bush''s cronies run and hide now.

[whitemale08]

...while you at it, set charges against Darth Cheney and George Wookie. We need regime change over here and fast.

[dittohead9]

After reading the comments posted I do have a few questions that I would kindly appreciate to be answered. 1. How exactly is, so called, big business corrupt? 2. How are banks corrupt? 3. Specific examples of U.S. Federal Government corruption. 4. Since when is a country using it''s military to solve a problem after diplomacy has failed wrong? 5. Do you know how a democracy and republic work, and as implimented by the U.S Constitution? 6. Do you know the benefits of capitalism vs Marxist thought? 7. How exactly is a bank supposed to know that money is "dirty"? 8. Have you ever considered the fact that nearly every government in the history of man has done things that it''s denizens don''t know about? 9. If the U.S. of A is so corrupt ,as some of you say, with little concern for it''s citizens welfare; why dont you move else where such as France, Germany, Russia, or China. 9a. Is it because you cant live without the benefits of living in America?

[obama441]

This is HILARILOUS! Between the Russkies and the Mexicans, we''''''''re gonna have nothing left (but a bunch of ransacked empty houses!)Posted by ApprxAm ..he,he yep you got that right sucker!! and over two million muslims already living in the US...

[Scooter68]

What makes this entire case so laughable is that that RICO law if used by Russian courts would close down most current Russian business because the Russian mafia has a strangle hold on businesses in that country. When the USSR collapsed the Mafia stood up and took over filling in the voids with their version of control.