36 International Affairs Review
an account for Sobinbank that was later substituted by an account for DKB.21 Sobinbank is
partially owned by Manezh -- the developers of Manezhnaya Ploschad, which is the pet project of
Mayor Luzhkov.22 Lukhoil and Energia and two other smaller Russian banks also share
ownership.23
The transactions were also complicated and interwoven. For example, in 1998
Flamingo sent money through Sobinbank to another account established by Edwards in the
name of Lowland Corporation.24 Sobinbank holds 20 percent of the shares of Flamingo, and
itself was created by SBS-Agro in 1990.25
There are also suspicions that former IMF representative and current Menatep Bank
first deputy chairman Konstantin Kagalovsky were involved in the Bank of New York money
laundering scheme.26 Kagalovsky’s wife, Natasha, headed the Eastern European division in the
Russian branch office, but was suspended in connection with the money laundering probe.27
Investigators are looking in to whether Menatep was used to move funds through the Benex
accountsat the Bankof New York.28
BECS was a British registered company that is currently under investigation for ties
with Columbian and Russian mafia organizations. New York investigators believe that the
money transferred through the Bank of New York was unconnected with criminal funds, and was
the result of capital flight.29 Investigators estimate that $ 2 billion passed through the BECS
account, according to the indictment against the bank.30 MDM and Sobinbank both utilized the
BECS account for transfers that were almost immediately forwarded to other accounts. In
addition, MDM maintained its own direct account with the Bank of New York that it used for
other transfers.31
BECS, Torfinex, and Benex shared the same address in New York according to registration
documents.32 Torfinex’s owner is Alexei Volkov, the previously-mentioned political and
economic elitist. The transfers executed by Volkov’s company, Torfinex, were done “acting on
instructions received from individuals in Russia,” the government said.33
In addition to the banks suspected of sending funds out of Russia, Sinex bank is under
investigation for illegally operating as a bank in the United States. Sinex’s suspected role was of
sending money back to Russia, possibly in the form of cash, for those Russian businesses in need
of dollars to pay for goods in Russia’s cash based economy.34 Sinex bank was incorporated in
Nauru, an area known for its recent Russian clientele. Sinex’s account was frozen in 1999 after
its banking license in Nauru expired in July 1998. Sinex’s managing director is Volkov, who also
runs Torfinex.35
The transfers through the Bank of New York were done in comparatively small
amounts, and then quickly transferred to other accounts in differing amounts. Over half of the
funds were at some point transferred from the Bank of New York through Nauru.36 |
