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Tuesday, September 21, 1999 Published at 23:23 GMT 00:23 UK


World: Europe

Swiss freeze US funds

The scandal may involve IMF loans to Russia

By Claire Doole in Geneva

Swiss banks have frozen nearly $17m of funds owned by the Bank of New York.

The banks took the action following suspicions the money had been laundered.

The Bank of New York is at the centre of what may be one of the biggest money laundering operations in American history.

It is alleged that Russian gangsters have illegally channelled up to $10 billion dollars through the bank, including loans from the International Monetary Fund (IMF).

No one has yet been charged, but the US Congress has opened hearings into the allegations.

As well as freezing the bank accounts, the Swiss have also ordered investigators in Geneva to look into the affair.

Second scandal

Two judges in the state are already working on a separate Russian corruption case.

That involves the Swiss construction company, Mabetex, which is alleged to have paid hundreds of thousands of dollars into private accounts of the Yeltsin family in return for lucrative contracts to refurbish the Kremlin.

Mr Yeltsin and the president of Mabetex deny any wrongdoing.

The Geneva investigators say they found no evidence of a direct link between the two corruption scandals, but certain company names are common to both.



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