Although the
commission is collected and employees are told that they have insurance, the funds are sent to
an offshore account and the fund manager, often a factory owner or manager, disappears
39
presumably to a warmed climate where he has collected funds in his own private account.
Ingosstrakh, the state controlled insurer, figures 80 percent of the life insurance policies written
in Russia are used in fraudulent “wage schemes,” not representing insurance at all.60 On
average, 47 percent of all insurance is fictitious, with the premiums on these policies totaling an
estimated $1.25 billion in 1998.61
While these methods of collecting and sending money out of Russia are not desirable,
they rarely meet the standard of criminal. Fraud is only a civil offense, one which is difficult to
prove and even more so in a country where the judicial system is not fully developed into an
independent branch of government.62 Although billions of dollars flow from Russia to bank
accounts and property abroad annually, only a small fraction of the total amount comes from
crime.63 |
