The size of Russian funds laundered through the Bank of New York, and transferred through Swiss accounts, has turned out to be far larger than previously reported.
During a seminar on corruption, Geneva judge, Laurent Kasper-Ansermet, revealed that around SFr850 million ($482 million) had passed through bank accounts in Switzerland.
The sum greatly exceeds the SFr30 million that have already been blocked in Switzerland. It now appears that the judicial authorities in Geneva will have to sift through thousands of banking transactions relating to hundreds of bank accounts.
The funds came from accounts held by three American companies, Benex, Becs and Lowland, at the Bank of New York.
In mid-1999, it was revealed that Lucy Edwards, vice president of the Eastern Europe division of the Bank of New York, and her husband, Peter Berlin, had served as intermediaries in laundering funds from Russia.
According to charges filed in the US, between February 1996 and August 1999 more than SFr12 billion passed through accounts that Benex, Becs and Lowland held at the Bank of New York.
The companies were fronts that were controlled by several Russian banks, including DKB and Flamingo. The money was illegally moved out of Russia, passed through New York, and was then distributed to various offshore accounts.
The aim was to dodge Russian fiscal controls, circumvent currency exchange legislation and recycle money obtained from criminal activities. Edwards and Berlin admitted their involvement, and subsequently cooperated with the FBI.
In Geneva, a money laundering inquiry was opened in 1999, following unsolicited offers of cooperation by about a dozen banks holding accounts that were likely to be implicated in the scandal.
Kaspar-Ansermet, who is leading the investigation, is set once again to ask for legal assistance from the American authorities, to determine the exact origins of the SFr850 million that were deposited at the Bank of New York, and which later passed through Switzerland.
The judge will have to make the distinction between criminal funds and funds that result simply from tax evasion. The latter is not a criminal offence in Switzerland. It will also be up to him to determine where the criminal funds eventually ended up.