Bank Of New York Fires Executive For Not
Reporting Pay Linked To Benex
03/13/2000
Dow Jones Business News
(Copyright (c) 2000, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Bank of New York Co. fired another
executive in its Eastern European division amid an investigation
into a money-transfer scheme that funneled $7 billion from Russia
through the bank from 1996 until last year, Monday's Wall Street
Journal reported.
Paul Turitzin , a 41-year-old vice president, was dismissed last
week for allegedly failing four years ago to report to the bank that
he received approximately $250 as a "thank you" for
conducting a tour for Russian clients of Benex International Co., a
company that is now at the center of the money-transfer scheme,
people familiar with the matter told the Journal. Under the bank's
code of conduct, employees are required to disclose whether they
have received any outside income.
A Bank of New York spokesman declined to comment, citing bank
policy on keeping employee matters confidential. Turitzin , through
a lawyer, declined to comment.
Turitzin was given the money by Peter Berlin, who controlled
Benex, these people say. At the time the money was paid, Benex was
operating conferences for Russian bankers. Turitzin was unaware that
at any time Benex was involved in transferring funds out of Russia,
a person familiar with the matter says. In early 1996, Benex also
began operating as a money-transfer service that eventually funneled
$7 billion out of Russia in a little over three years.
Later, however, Turitzin asked Berlin's wife, former Bank of New
York Vice President Lucy Edwards, how a friend of his might transfer
money into Russia to aid a boy hurt in an accident. She told
Turitzin to have the person call her, and her husband, Berlin,
helped facilitate the transfer, people familiar with the situation
told the Journal.
Berlin couldn't be reached; his lawyer has said he and his wife
are cooperating in the investigation.
Berlin and Edwards, who was fired from the Eastern European
division in August, have pleaded guilty to a broad conspiracy to
launder money through three accounts, including one for Benex, at a
Bank of New York branch on Wall Street. Much of the money came from
Russian companies seeking to avoid Russian taxes and customs duties,
but authorities suspect it may also have included criminal proceeds.
Turitzin is the fourth employee in the bank's Eastern European
division to depart since the scandal broke last summer. In addition
to Edwards, the division's head, Natasha Kagalovsky, was put on
administrative leave and later resigned. And a low-level
administrative assistant and friend of Edwards, Svetlana Kudryavtsev,
was fired last fall. She has been charged with lying to the Federal
Bureau of Investigation in connection with its probe into the
transfers; she has pleaded not guilty.
Turitzin , a respected employee who had worked at the bank for 13
years, was a relationship manager for several countries within the
division.
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