Oodles of Rubles Turn Into Billions of Bucks

  • Share
  • Read Later
They weren't the kind of deposit one slips through the slot at the ATM. According to the New York Times, Russian mobsters are thought to have laundered billions of dollars through an old-line American financial institution, the Bank of New York. Investigators, tipped off by British authorities, spotted some $4.2 billion flowing through one account in more than 10,000 transactions from October to March of this year. The total could be as high as a staggering $10 billion — double the size of Russia's latest IMF bailout check. The target of investigators is Semyon Yukovich Mogilevich, a shadowy figure with an estimated net worth of over $100 million and the usual mobster résumé — arms trafficking, extortion, prostitution, and now, maybe, money laundering.

And there is another worry: influence peddling. "Whenever any mob pulls down this kind of money, you have to be concerned about its possible political influence," says TIME's William Dowell. Especially when the mob in question is based in a country where capital is flying out of the country at hyper-speed and allegations of kickbacks and corruption permeate the government all the way to the office of President Boris Yeltsin. Those suspicions have led to speculation that Yeltsin's ongoing game of Whack-a-Mole with his cabinet is an attempt to ensure that a friendly, non-prosecutorial government will succeed him. So far, there are no allegations of wrongdoing by the Bank of New York, but the institution has suspended two executives believed to be connected to the case. One of them, Lucy Edwards, spoke at an international banking conference a few months ago. Her topic: "Money Laundering: Latest Developments and Regulations."