The charges allege that $7 billion was illegally funneled from Russia through accounts at The Bank of New York in what investigators believe to be one of the largest cases of money laundering in the United States.
The federal charges were contained in a three-count indictment filed in U.S. District Court in Manhattan on Sept. 16 and unsealed Tuesday. Peter Berlin, Lucy Edwards a former vice president at the bank and Aleksey Volkov as well as Benex International Co. Inc., Becs International L.L.C. and Torfinex Corp. were named as defendants.
U.S. Attorney Mary Jo White said in a statement that "the ongoing investigation is very intense and broad, and it is likely to go on for some time." The charges were the first to result from an investigation by federal prosecutors in Manhattan.
"Many questions about the various sources of the monies flowing through the accounts at the Bank of New York remain to be answered," she said.
Lewis Schiliro, an FBI assistant director in charge of the New York office, said the FBI is primarily focused on determining the origin of the funds and tracing the path of transactions through accounts at the Bank of New York.
"As this investigation has progressed, cooperation from the Russian authorities has been forthcoming and has been helpful," he said. "Unsealing this indictment will serve to facilitate the mutual flow of information."
The indictment alleges that the defendants conspired from 1996 to August 1999 to illegally transmit funds and receive deposits through the Benex and Becs accounts at the Bank of New York.
Berlin was the president of both Benex and Becs and was married to Edwards, who was a vice president in the Eastern European Division at the Bank of New York and was also an officer of Benex and Becs, prosecutors said.
The defendants were charged because they allegedly engaged in an illegal banking operation by receiving deposits without obtaining authorization from any federal or state banking agency, according to prosecutors.
The indictment also seeks criminal forfeiture of various bank and brokerage accounts, including the Benex and Becs accounts as well as accounts held by Torfinex at the Bank of New York.
The indictment alleged that the defendants continued to send money illegally through the Benex and Becs accounts even after Torfinex was ordered by the New York State Department of Banking in October 1997 to stop transmitting money.
It was not immediately clear what was Volkov's role in the alleged money-laundering scheme. All of the defendants were believed to be abroad, prosecutors said in a release.
If convicted of all the charges against them, Berlin and Volkov could face up to 15 years in prison and a fine of $175,000 or twice thgain or loss resulting from the crime.
If convicted of the conspiracy charge against her, Edwards would face a maximum prison term of five years and a maximum fine of $250,000 or twice the gain or loss resulting from the crime.
Edwards was dismissed last month for gross misconduct, violation of the bank's internal policies, falsification of bank records and failure to cooperate with the bank's investigation. She has denied any wrongdoing.
If convicted, the corporate defendants could face maximum fines of $1.5 million or twice the gain or loss.
Those accounts collectively hold about $6.2 million and were seized when warrants were issued in August 1999.
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