LONDON - Russian organized-crime figures laundered at least $15 billion through two New York banks at the direction of President Boris Yeltsin's government, senior U.S., British and Russian law-enforcement officials said. The officials said $10 billion of that was from International Monetary Fund (IMF) loans.
Officials said the money was laundered through four accounts at the Bank of New York and one account at the Republic National Bank, also based in New York.
"Money laundering" refers to the criminal practice of taking ill-gotten gains and moving them through a series of bank accounts until they ultimately look like legitimate business profits. In this case, all the accounts were under the name of a company called Benex Worldwide Ltd., which was founded by Semion Mogilevich, a leader of Solntsevo, Russia's largest organized-crime group, officials said.
The IMF money was part of more than $20 billion the agency has loaned to Russia since 1992 to prop up its economy. The rest of the laundered money is believed to have come from bilateral loans and World Bank projects directed to Russia's government and criminal rackets such as prostitution and even contract killings that were controlled by Mogilevich, British officials said.
Senior officials of Russia's prosecutor general's office, an independent agency, and Britain's National Criminal Intelligence Service said at least five present or former members of Yeltsin's government, all of whom had access to the IMF money, are being investigated to determine their roles in laundering the money.
They are Tatyana Dyachenko, Yeltsin's daughter and adviser; Anatoly Chubais, Yeltsin's former chief of staff and finance minister; former deputy prime minister Oleg Soskovets; former finance minister Alexander Livshits; and Vladimir Potanin, former deputy chairman of the Russian federation.
Senior officials of Russia's prosecutor general's office said from Moscow that it was "hard to believe" Yeltsin was not involved or at least not aware of what was taking place.
Russian Finance Minister Mikhail Kasyanov denied yesterday that the Russian government had any part in the illegal diversion of money.
At least six U.S. government agencies, including the FBI and the Treasury Department, are investigating the case, along with British officials.
The officials, who monitored Mogilevich's phone, fax and e-mails, said members of the Russian government sought him out because of his expertise in money laundering.
Bank of New York and Republic National Bank spokespeople declined to comment on the latest allegations. IMF spokesman Graham Newman said he would not comment on any new reports beyond his statement Monday that "the allegations of money laundering in Russia are extremely serious, and we are looking further into the matter."
The officials said the money laundering has stopped since news of the operation was reported last week. Mogilevich and several other key suspects in the investigation have disappeared, officials said.
A Kremlin spokesman said today that Yeltsin, his wife and their two daughters have never opened bank accounts abroad. "The incomes of the family of the president have been declared according to the legally established order," he said.
The comments followed reports in an Italian newspaper that Swiss prosecutors believed a construction company had paid money that ended up in an account for Yeltsin's use and had paid credit-card bills on behalf of Yeltsin and his daughters.
Compiled from USA Today, The Associated Press and Reuters.