Russian Authorities Sue Bank of New York for $22.5 Billion
May 18th, 2007How many corpses will be hitting the deck over this?
Via: International Herald Tribune:
The Russian Federal Customs Service is seeking $22.5 billion in damages from the Bank of New York, which it accuses of money laundering in the 1990s.
The bank “committed violations of Russian law that resulted in damages of $22.5 billion to the state” between 1996 and 1999, Maxim Smal, a lawyer for the service, said after filing the suit Thursday in the Moscow Arbitration Court.
Smal said the suit was “almost entirely based” on a U.S. government investigation that ended in 2005 with the bank’s agreeing to pay $38 million and admit it had failed to report $7 billion in suspicious Russian transactions to the authorities. The U.S. investigation “uncovered very serious violations,” Smal said, declining to elaborate, saying that more details would be disclosed at a news conference scheduled for Friday.
The Bank of New York sold its branch network in October and agreed two months later to merge with Mellon Financial to create the world’s largest custodian of investor assets. It has a market value of $31 billion and is the depositary for more than 1,250 U.S. and global depositary receipt programs, including VTB Group, the state-run Russian bank that raised $8 billion last week in an initial public offering.
The bank, which said it had not received official notice of the suit, called it “totally without merit.” Lawyers representing the agency had approached it and offered to settle out of court for a “tiny fraction of the amount now claimed,” the bank said in a statement.
