Russia: new delay in BoNY-M case

Edwards and Berlins and Bank of New York, for which Edwards worked have not been convicted of money laundering: Edwards and Berlins did a plea bargain and settled on a "conspiracy to launder" charge and Bank of New York stumped up bundles of cash to prosecutors and regulators to avoid a criminal trial.

But Russia says that Bank of New York was complicit in the theft of the money which has never been recovered. Proceedings were begun in Moscow in the middle of last year, when Russia said that the takeover of Mellon, announced in December 2006 but completed earlier in 2007 that action against BoNY would have been so large that the bank could not have settled the judgment - but the combined BoNY-M would be able to satisfy whatever orders the Russians obtained.

And it is a lot of money: USD22.5 milliard.

BoNY-M (which prefers to be known as BNY Mellon - but, to paraphrase the words of Roger Rabbit, "that wouldn't be funny") says "While the Company would not be surprised by an adverse judgment, given the concerns it has raised to the court about the handling of the case, it remains confident that any adverse judgment would not be enforceable in countries where the Bank has significant assets, given the substantial, well-established legal and financial safeguards in place," and that it "intends to pursue every available route of appeal through every level of the Russian legal system and beyond."

The combined BoNY-M is a massive player in the global custodianship business but despite a near-worldwide presence it has no offices in Russia. BoNY's Russian troubles began when it took over the Russian desk from New York's Republic National Bank in a back to back deal when HSBC took over the remainder of Republic.The Chairman of Republic, Edmond Safra, was infamously found dead in his Monaco flat just days after the terms of the deal were finalised. The official explanation was that one of his nursed set fire to the flat so he could run in and claim to have saved his elderly and infirm employer. But there are persistent rumours that Safra's bodyguards, several of them former Israeli intelligence operational officers, were conveniently out of the way and that there were two bullets in the body, plus that certain powerful Russian interests wanted him out of the way because, in the vernacular that has more than a touch of irony, "he knew where the bodies were buried."

The chairman of BoNY, Thomas Renyi, famously said of Edwards the phrase that has become a by-word for managing internal threats "We placed our trust in a senior officer and that trust was misplaced."

On 6th October, BoNY-M filed a bundle of papers with the Moscow court purporting to show that there is no legal basis for the claim in Russia which seeks to apply the USA's RICO statute in a Russian court.

=======

Silkscreen Consulting : www.countermoneylaundering.com

=======