Top Euro banks cited in IMF cash probe

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The Independent Online
THERE WAS consternation in European banking circles yesterday on news that US investigators probing an alleged $10bn (pounds 6bn) money-laundering operation by the Russian Mafia have widened their inquiries to include five of Europe's most prestigious banks.

The Federal Bureau of Investigation and US Attorney's Office are looking into the activities of Credit Suisse, UBS, Dresdner Bank, Westdeutsche Landesbank and Banque Internacionale a Luxembourg,where they relate to the investigation into Bank of New York's role in one of the biggest money-laundering scandals ever.

While there is no suggestion of any wrongdoing on the part of these banks, the investigators are thought to be are concentrating on establishing a defined paper-trail that will allow them to locate the exact sources and destinations of the Russian cash.

The inquiry, which became public last week after a year-long secret investigation by intelligence services on both sides of the Atlantic, centres on accounts linked to Russian mobster Semion Mogilevitch, known as the "Brainy Don", at Bank of New York's offices in New York and London.

Two senior Bank of New York employees, both Russian by birth, have been suspended on full pay pending the outcome. Last Wednesday officers from the UK's National Crime Squad visited the London home of one of the employees, Lucy Edwards, and removed files and computer disks. Her husband, Peter Berlin, has also been linked to the investigation.

A report in yesterday's Wall Street Journal said the five European banks came under scrutiny over their role in the movement of billions of dollars from accounts in Russia and Eastern Europe through Bank of New York.

The FBI is also trying to discover whether the funds included $200m of International Monetary Fund aid destined for Russia last year.

However, news of the widening scope of the inquiry was met with disbelief and anger in the headquarters of the five European banks.

Luzman Arnold, chief financial officer at UBS, rebuffed suggestions of any connection between his bank and any Russian money-laundering syndicate.

"Swiss bank controls on new business are among the toughest in the world. We do not want this type of client and I deny the story," said Mr Arnold.

Dresdner Bank said: "We have conducted our own investigation into this matter and we are adamant that there are absolutely no grounds for these allegations."

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