According to The New York Times, investigations into Mogilevich have uncovered a massive East-to-West money-laundering operation using facilities at the Bank of New York. A senior London-based executive of the bank is suspended on paid leave. The New York Times claims her husband's company had an account through which up to $10bn was passed. Both were Russian-born.
Semion Mogilevich has had close connections with Britain and it was the British intelligence service, MI6, which tipped off the American federal authorities of its suspicions that the bank was being used by money launderers.
MI6 and the Police National Crime Intelligence Service (NCIS) have been keeping a close eye on Mogilevich since the mid-1990s, when he tried to set up an earlier money-laundering operation. A leaked NCIS report from 1995 said: "Semion Mogilevich is one of the world's top criminals who has a personal wealth of $100m. He is the target of law-enforcement agencies and security services in several countries and as a result of the effect of his financial impact on the City of London he clearly falls in the category of an NCIS core criminal."
Last year New York's Village Voice magazine obtained secret FBI, CIA and Mossad reports that assert that Mogilevich traffics in nuclear materials, drugs, prostitutes, precious gems and stolen art. His hit men operate in the U.S and Europe.
He is said to control everything that goes in and out of Moscow's Sheremetyevo International airport. He even bought a bankrupt airline of the former Central Asian Soviet Republic to ship heroin out of the Golden Triangle. Legally he has bought a large tranche of the Hungarian armaments industry.
After the article was published, American intelligence warned the writer, Robert Friedman, that Mogilevich had put out a $100,000 contract on him. The writer and his wife had to go into hiding.
For once the expression "Mr Big" is no exaggeration. Yet little is known of Mogilevich's early years. He first came to the attention of the Soviet authorities in the 1970s when he was involved involved in petty theft and counterfeiting with a gang based in the Moscow suburb of Liubertskaya.
Mogilevich made his first millions in the early 1980s, stealing from his fellow Jews. During the great exodus of Soviet Jews to Israel he made countless deals to buy the assets that emigrants were not allowed to take - roubles, furniture and art - promising to forward the proceeds to Israel. He never did. Thousands of Jews were fleeced.
On these proceeds he established a petroleum company, Arbat International, and registered it on Alderney, the tax haven in the Channel Islands. One of his partners in this venture was Vyacheslav Ivankov, the infamous Russian Mafioso. Ivankov went to New York to take over the Russian Mafia, and was convicted in 1996 of extortion against two Wall Street brokers. Arbat was later sold.
In the 1990s, bloody gang wars in Moscow forced many of the top mobsters to leave town. Mogilevich and his lieutenants moved to Israel and acquired Israeli citizenship. According to an Israeli intelligence report, Mogilevich "succeeded in building a bridgehead in Israel" and was "developing significant and influential [political] ties".
In 1990 Mogilevich married a Hungarian woman. This gave him Hungarian nationality and, with Mossad breathing down his neck, he moved his operations to Budapest. From there he bought a string of nightclubs across Eastern Europe which were also fronts for prostitution.
By the mid-1990s, Mogilevich needed to take money earned in his wide range of criminal activities in the East and "launder" it through legitimate companies in the West, without arousing the interest of authorities here. In one of his first attempts, he used an unsuspecting London law firm. One of the principals of the practice was Adrian Churchward, 53, a solicitor from Romford, Essex, whose Russian wife had been one of Mogilevich's earlier girlfriends but knew nothing of his criminal activities.
Mogilevich, posing as a legitimate businessman, set up two British companies with Mr Churchward and his partner. Large sums of money started going through the hands of the London lawyers. This attracted the attention of the Metropolitan Police, who in an operation codenamed "Sword", raided the homes of the lawyers in May 1995, and seized pounds 2mfrom their account in the Royal Bank of Scotland.
No prosecutions followed. The two joint companies were dissolved, as was the law practice. Mr Churchward now runs his own practice.
As a result of Operation Sword, the police thwarted Mogilevich's attempt to launder money here, and he is banned from entering Britain. But British intelligence has kept a close eye on him.
MI6 became suspicious of an account at the Bank of New York. The account was linked to a British company called Benex Worldwide Ltd, which was set up in 1998 with an address in Woodford Green, Essex. The main director is a 44-year-old Russian businessman called Peter Berlin.
Mr Berlin's wife is Lucy Edwards, who is a London-based vice president of the Bank of New York. Over a year ago, British intelligence told the American authorities that Benex had an account at the bank which was experiencing massive transfers of money. Benex is said to have links to a Canadian company called YBM Magnex which has been identified as a front for Semion Mogilevich.
Following the tip-off, the FBI approached the bank and with its co-operation monitored transfers going through the account. In the period from October to March this amounted to some $4.2bn in more than 10,000 transactions. Federal authorities believe as much as $10bn has passed through the account.
As a result, Lucy Edwards has been suspended on paid leave. A New York- based vice president of the bank, Natasha Gurfinkel Kagalovsky, who controlled the accounts for the bank, has also been suspended. Both she and her husband are also Russian-born.
Despite the staggering amount of money passing through the account, the bank had only filed one "suspicious activity report" with the Federal authorities. These reports are meant to be filed at the slightest hint of money laundering.
On Wednesday night the National Crime Squad raided the luxury home of Peter Berlin and Lucy Edwards in a West End apartment block. Mr Berlin told The Independent that they have no comment. Mr Berlin and his wife later drove to their solicitors, Theodore Goddard, to take advice over the allegations. Neighbours say the couple were quiet and unflamboyant. One said she thought that they bought the flat two years ago for pounds 500,000 in cash.
Investigations are still at an early stage. No one has been charged. The Bank of New York said yesterday that there is no suggestion of wrongdoing by the bank.
"The bank has been co-operating with the office of the United States Attorney General for the Southern District of New York," it said.
In his rare interviews, Semion Mogilevich maintains that he is a honest and straightforward businessman.Reuse content