Russia Drops Two Year Legal Battle Against New York Bank
By: Ainsley Brown
The Russian Federal Customs Service has dropped its $22.5 billion suit against Bank of New York Mellon (BNY), the world’s largest custodian of assets.
Yes, you read that correctly that 22.5 Billion with a B. The suit was brought by the Russian Federal Customs Service in 2007 alleging that BNY was at the centre of illegal money transfers from BNY account out of Russia between 1996 and 1999. BNY it was alleged assisted its clients to avoid the payment of taxes, import duties and to hide the proceeds of crime.
The Russians brought the suit after a BNY vice-president and Russian émigré, Lucy Edwards and her husband plead guilty to charges in the US of conspiracy in relation to the illegally transferring $7.5 billion. The two were sentenced to six months house arrest, ordered to pay a fine of $ 20,000 and $685,000 in compensation, and put on five years probation. BNY was never charged in relation to the incident and cut a non-prosecution deal with US authorities.
These convictions formed a central pivot in the Russian claim. Authorities there invoked US anti-racketeering law to arrive at the $22.5 billion figure – three times the mount originally transferred out of Russia.
The suit however has now been drop with BNY agreeing to pay the $14 million legal cost of the Russian Federal Customs Service. And incidentally – both sides claim this to be totally unrelated – BNY has proved two unnamed Russian state banks with a renewable loan facility of $4 billion over five years. What timing, eh.
