Now It's Time to Air the Dirty Laundering

By Frank Pellegrini Wednesday, Oct. 06, 1999
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So now its a Russian money transferringscandal? U.S. attorneys have unsealed a raft of indictments in its money-laundering probe, accusing Bank of New York exec Lucy Edwards, her shady businessman husband Peter Berlin and another alleged front-company operator, Aleksey Volkov, of illegally funneling $7 billion of supposedly ill-gotten gains through several accounts at the Bank of New York. No shock Edwards was fired last month for various gross violations of bank policy, and Berlin has been previously linked by authorities to a Russian mobster/arms dealer. Except for one thing, says TIME business writer S. C. Gwynne: The words "money laundering" didnt appear in a single indictment. "Thats the key to this money laundering is an exceedingly hard crime to prosecute," he says. "The jurisdictional issues alone are daunting in this case youd have to follow the money through New York, Switzerland, Italy and back to Russia, and then prove it was illegally gotten and laundered. Not easy for U.S. investigators to do."

As it is, investigators are combining an Al Capone-style strategy with an old-fashioned squeeze play. "What they have Edwards on now is just penny-ante regulatory stuff like transferring money overseas without a license," Gwynne says. Not a very juicy collar and it of course ignores the alleged Russian gangsters at the heart of it all. But, Gwynne figures, investigators will read the former Lyudmila Edwards the part of the indictment that would most interest a 41-year-old woman the part about 15 years in prison and squeeeeze. "If she talks, theyll have something," he says. "She can give them her boss, Natasha Gurfinkel [whose name did not appear in the indictments but is almost certain to later], and she can make this into a money laundering case again." That, of course, is a big if assuming the villains in this scheme are who the feds think they are, a voluble Miss Edwards could find herself sleeping with the sturgeons in no time. American white-collar prison might look pretty good in comparison.