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Wednesday, October 6, 1999 Published at 03:23 GMT 04:23 UK

World: Americas

Three charged in NY bank scandal

The scandal may even involve IMF loans to Russia

United States prosecutors have issued charges against three people in one of the biggest money-laundering cases in American history.

The Russian mafia is said to have illegally channelled billions of dollars through accounts at the Bank of New York.

Charges have been filed in a federal court in Manhattan against a former executive at the bank, Lucy Edwards, her husband, Peter Berlin and another man, Aleksiy Volkov.

They are charged with conspiring to transmit funds and receive deposits illegally. Some $7bn in accounts at the Bank of New York is said to be involved.

Three companies - Benex International Co. Inc., Becs International L.L.C., both of New Jersey, and New York-based Torfinex Corp - were also named in the indictment, but not the Bank of New York itself.

Lawyers for Ms Edwards and Mr Berlin said the couple - who live in London - will "appear in whatever court they're required to appear in."

US prosecutors believe Mr Volkov is not in the country.

Following the money

The wider claims of a money trail stretching from Moscow to New York have already raised concern among politicians in Russia and the United States.

The International Monetary Fund and the World Bank are working to account for all their funds which have headed to Moscow, but say there is no evidence so far that any went missing.

Finance ministers of the leading industrialised countries warned last month that Russia would only get the next tranche of its loan from the International Monetary Fund (IMF) , if it enforced stronger safeguards against corruption.

They added that there was an urgent need for Russia to fight corruption and money laundering.

Swiss banks have frozen nearly $17m of funds owned by the Bank of New York, and have ordered investigators in Geneva to look into the affair.

Russia has angrily denied any government - or presidential involvement - in the scandal.

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