Russian-born Ms Edwards was fired for alleged gross misconduct, violations of the bank's internal policies, falsification of bank records and failure to cooperate, said a source.
Ms Edwards worked in the Eastern European division of the bank's London office. She was responsible for finding Russian business for the bank, but has also attracted attention because of her husband. He has been identified as Peter Berlin, also a Russian, who, according to reports, is the holder of the five accounts at the bank through which money may have been laundered. Ms Edwards' home, it emerged yesterday, was recently searched by British investigators. The couple have said nothing.
A colleague, Natasha Gurfinkel Kagalovsky, has also been placed on leave. In her Manhattan apartment with her young son and speaking only through her lawyer, Ms Kagalovsky is also awaiting events. She is not alone in their suspense as investigators in several capitals strive to unravel the apparent Russian money-laundering scandal encompassing up to $15bn.
Like the sums of money involved, the stakes are sky-high. Certainly, they are high for the two Russian-born women, both of whom were senior executives with the Bank of New York, where investigators think the main laundering accounts were held. The stakes are high for their respective husbands, who have also come under scrutiny in the investigations. Serious embarrassment - and maybe federal sanctions - loom over the bank.
But the fall-out from the affair could be spread far wider. If the allegations of massive laundering are proved, politicians in the US especially will demand reforms in a banking system that apparently is unable to control such illicit flows.
Still more grave are new suggestions that some of the money has been skimmed from international loans to Russia, notably from the International Monetary Fund. Already voices in Washington are sayingIMF loans to Moscow should be suspended until the truth is fully uncovered.
And the shadow of the affair is threatening the offices of political leaders on both continents. Anonymously, investigators have argued that senior officials in Mr Yeltsin's administration may have been involved in money-laundering schemes, including his daughter and adviser, Tatyana Dyachenko. Some have said that President Yeltsin must have been aware of the transactions.
In Washington, blame for the mess is being cast by some on Vice-President Al Gore, who has taken a lead role in supervising President Clinton's policies of supporting Russian reform. Aides to Mr Gore have already rushed to try to insulate him from allegations that he was among those turning a blind eye to corruption in the new Russian capitalism.
Leading the attack on the administration has been the Republican candidate, Steve Forbes. "It's long been in the papers that tens of millions of Russians are not being paid; it's long been known billions are being siphoned off," he declared. "And yet they keep shovelling billions of IMF money into a government that misuses it."
Reaching the truth of what happened will not be easy. The claims that IMF money may have been involved are far from proved. Nor is it even clear that all of the money that apparently washed through some five accounts at the Bank of New York, held by a London- incorporated firm called Benex, were actually generated either from Russian mafia earnings or corruption and pilfering.
Channelling profits through foreign accounts is a common and usually legitimate practice of Russian corporations seeking to evade often horrendous Russian currency regulations and to protect capital from the vagaries of the uncertain rouble economy.
"This is going to take some considerable time. It will be more like months than weeks," a spokesman for Britain's National Crime Squad, which is leading the London end of the inquiry, said yesterday. Suggesting a deep well of mysterious dealings, one US official told USA Today newspaper: "The more we dig, the more we find."
What investigators have to work with now are streams of transaction records seized from the Bank of New York and the slowly expanding cast of characters they believe may hold the key to the scandal's mystery. Nobody, it should be stressed, has yet faced criminal proceedings. Nor has any institution.
Top billing so far has been given to Mrs Kagalovsky. Employed by the Bank of New York in the mid-Nineties to drum up business in Moscow, her expertise on the Russian financial scene was revered. Mrs Kagalovsky is under the microscope in part because she was so close to the transactions now under suspicion at the Bank of New York. But the alarm bells were sounded also because of her marriage to Konstantin Kagalovsky.
Press reports say Mr Kagalovsky, who was Russia's representative to the IMF in the early Nineties and who then moved to the once-powerful Menatep Bank in Moscow, has increasingly become the focus of the fast-expanding money-laundering probe.
The Kagalovskys, who met in Washington in 1993, share a lawyer in New York who has denied that they have committed any wrong-doing. In a statement, Stanley Arkin insisted: "Konstantin and Natasha wish to state unequivocally that they have never been involved in money-laundering activities."
Menatep Bank, which has been insolvent since the autumn 1998 Russian economic crash, also this week protested its innocence. "Any references or allusions to improprieties either on the part of the bank or Mr Kagalovsky are fallacious and reckless," it said.
Another on the cast list is Semion Mogilevitch, a Russian businessman living in Hungary whom the authorities have characterised as a pivotal Russian mafia leader. He has also denied all involvement.
Helping Russia in its transition to capitalism has always been a paramount goal of Washington. And for many, like the Bank of New York, it has offered colossal rewards. But no one could ever imagine it would be clean or free of criminal intrusions.Reuse content