Bank of New York Co. on Friday fired Lucy Edwards, one of two executives at the center of an international probe into suspected money laundering.

Ms. Edwards had been on administrative leave since mid-August, when the federal inquiry into transactions through $68 billion-asset Bank of New York was made public. She was an assistant vice president based in London and worked in the Eastern European division.

Ms. Edwards, 41, reported to Natasha Gurfinkel Kagalovsky, senior vice president and head of that business unit, who had also been -- and continues to be -- on leave pending the outcome of the investigation. Neither of the women has been charged with a crime.

Attempts to contact Ms. Edwards were unsuccessful. She was dismissed for alleged misconduct and violations of internal policies. A Bank of New York spokesman declined to comment, except to confirm the dismissal.

Bank of New York acknowledged earlier this month that it was cooperating with the U.S. Attorney's office in New York "in the confidential investigation of the use of bank facilities to transfer funds from Russia to other countries." The bank said it had not been accused of wrongdoing.

Investigators searched the offices of Ms. Edwards and Ms. Kagalovsky almost two weeks ago, said people familiar with the matter. Federal authorities are looking at the possibility that $10 billion may have been laundered through a half-dozen accounts at Bank of New York since last year. Some of those accounts reportedly have links to suspected organized crime figures. The U.S. Attorney's office has declined to comment, as has the Manhattan District Attorney's office, which has also reportedly issued subpoenas in the case.

Republic New York Corp. has also been working with federal investigators, who were monitoring transactions in an account reportedly linked to a company called Torfinex. Little could be determined about that company. Records indicate that a Queens, N.Y., firm, Torfinex Corp., was incorporated in New York in July 1996. Telephone calls to that company went unanswered Friday.

A spokeswoman for Republic said an account there had wire transfers to and from bank accounts held by Benex Worldwide Ltd. Peter Berlin, a Russian businessman who is the husband of Lucy Edwards, is listed as an officer of London-based Benex. Some of the accounts under investigation at Bank of New York are in Benex' name.

"Republic reviewed the activity of the account and filed a suspicious activity report with federal authorities in August 1998," the Republic spokeswoman said Friday. "Republic received a written request from U.S. federal authorities to keep the account open to enable federal authorities to conduct their investigation." She declined further comment.

The investigation has mushroomed to include authorities in the United States, the United Kingdom, Russia, and Switzerland. On Capitol Hill, lawmakers have vowed to hold hearings in September.

In a statement issued last week through their lawyer, Ms. Kagalovsky and her husband, Konstantin Kagalovsky, a former representative for Russia to the International Monetary Fund and currently a top executive at a Russian oil company, denied wrongdoing. Investigators are also looking into whether IMF loans to Russia were illegally diverted to offshore accounts.

"Konstantin and Natasha wish to state unequivocally that they have never been involved in money laundering in any way, shape, or form," said the statement released by Stanley S. Arkin of Arkin, Schaffer & Kaplan LLP. "Nor do they have any knowledge of such activity."

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