This latest scandal comes on the heels of allegations that money from the
IMF's US$4.8 billion "stabilization credit" to Russia in the summer of 1998
was diverted to various banks, including BONY (see the Monitor, July 17,
25, 31). Last week, Mlada fronta DNES, the largest-circulation daily
newspaper in the Czech Republic, reported that the Czech law enforcement
authorities had evidence that money from the IMF credit was laundered in
American banks. The paper quoted unnamed Czech counterintelligence
officials as saying that last summer they discovered a network of
questionable financial transactions between BONY and the Prague affiliates
of Komercni Banka and Invedticni a postovni banka, and that these
transactions turned out to be part of an operation to launder IMF money
bound for Russia. The Czech authorities reportedly informed the FBI of
their findings. The Czech paper, quoting sources in the Czech police,
reported that funds were still being moved between BONY and accounts in
Czech banks belonging to Russian citizens. The article linked the money
laundering activities involving the Czech banks with Semyon Mogilevich, an
alleged Russian mobster who reportedly laundered money through BONY
(Russian agencies, August 3; see also the Monitor, August 27, October 6,
1999). Mogilevich was deported from the Czech Republic in 1995, after which
he reportedly he began operating out of Budapest. Earlier this year, an
interview with Moskovskie novosti, he denied all the allegations against
him, saying he was simply a wheat trader (see the Monitor, February 22).