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Swiss investigators say that up to $15m worth of bribes were made available to the Russian leader, his family and senior Kremlin officials by a construction company competing for Kremlin contracts.
The Kremlin has rejected the allegations, claiming the story - which surfaced in the Washington Post - was politically motivated.
While reports of the corruption case emerged already one year ago, this is the first time that the Yeltsins have been directly linked to it, and a precise amount has been mentioned.
The company, Mabetex, is under investigation by the Swiss and Russian authorities for having paid large kickbacks to receive a renovation contract for the Kremlin.
Yeltsin family link
Swiss investigators say they have evidence that President Yeltsin and his two daughters were provided with credit cards and the bill was met by Mabetex.
The Yeltsin family link to the scandal emerged as Swiss officials investigated Mr Pavel Borodin, the Kremlin official who oversaw Mabetex's renovation contracts with the Russian government.
Swiss investigators found that Mabetex had opened bank accounts for Mr Borodin in the Swiss cities of Lugano and Geneva. Mabetex records also revealed payments were made to another Swiss bank, where the card holders were President Yeltsin and his two daughters.
Payments for the Yeltsins' credit cards totalled tens of thousands of dollars over two or three years, the newspaper report said.
Mabetex also allegedly provided $1m that was transferred to a Hungarian bank account for President Yeltsin.
Officials familiar with the enquiry say altogether $10m to $15m were put into bank or credit card accounts of Russian officials.
The Russian authorities are also investigating the case, but even the Prosecutor General Yuri Skuratov has questioned his colleagues' willingness to challenge the Kremlin. Mr Skuratov was suspended by President Yeltsin earlier this year.
The Italian connection
News has also emerged of an Italian connection to the scandal. Italian newspaper Corriere della Sera has reported that a furniture business - that has links with Mabetex - laundered money for the Kremlin.
The reports allege that Russian couriers drove from Switzerland, delivering money to Oak Industria Arrediamenti, who then channelled it into bank accounts that the Yeltsins could access. Oak deny that any wrongdoing took place.
This scandal coincides with a separate investigation into claims that billions of dollars were illegally siphoned out of Russia and laundered in a New York bank.
Investigators in New York believe that more than $10bn in funds from Russia was illegally deposited in the Bank of New York, and some of it may have come from the $20bn that the International Monetary Fund has paid to Russia since 1992 to help stabilise the economy.
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