MOSCOW In preparation for parliamentary hearings planned here, U.S. and Russian legislators are set to discuss an investigation of alleged Russian money laundering involving Bank of New York Co.
House Banking Committee Chairman James Leach and some staff members arrived in Moscow Monday for meetings with party leaders in the lower house of parliament, the Duma. They were joined by First Deputy Prime Minister Mikhail Kasyanov and Russian central bank Chairman Viktor Gerashchenko; the hearings are scheduled for June in the Duma.
We expect specific recommendations to legislative and executive branches of both governments, said Alexander Shokhin, chairman of the Duma banking committee, who initiated the hearings.
U.S. authorities began an investigation last year into allegations that billions of dollars of illegally acquired money were transferred out of Russia through Bank of New York. The probe further strained relations between Russia and the International Monetary Fund and the Group of Seven industrialized nations, because the sums involved suggested that the government was aware of the laundering and failed to stop it. The size of the outflows also raised questions in the West about lending to Russia.
The monetary fund stalled lending to Russia after the investigation began.
The Bank of New York has not been charged in the case the United States brought against former Bank of New York vice president Lucy Edwards, two Russians, and three companies. In February, Ms. Edwards and her husband, Peter Berlin, pleaded guilty to running an illegal wire-transfer operation that laundered more than $7 billion through Bank of New York.
At hearings held by the House Banking Committee in September 1999 Bank of New York chairman Thomas Renyi acknowledged that his company failed to sufficiently investigate suspicious activity in certain accounts.