Witness in the Bank of New York Case Attacked

By Maria BERDNIKOVA

March 15, New York. (MT~Wire) A Russian witness who traveled to New York to testify in the case of BoNY shareholders against its management ended up in the hospital shortly after return to Moscow. Elvira (who asked to be identified only by her first name), a young Russian banker, gave testimony about certain BoNY officers engaging in fraud and insider trading in Russia in 1996. Elvira said that when she returned home she received threatening phone calls from former officials of a now defunct Russian bank Inkombank. Several days ater Elvira rode in a friend’s car at night when an unknown vehicle struck the passenger’s side of her friend’s car and sped away. Elvira suffered a mild concussion and was hospitalized for a few days. Shortly after being released from the hospital, Elvira discovered that her own car was vandalized overnight. Police inspected her vehicle and found a dead rat on the back seat – a typical Russian mob style warning to informants.

The shareholders’ lawsuit alleges that some of the    senior officers of the Bank of New York conspired with corrupt officials of Inkombank to engage in fraudulent dealings, capital flight and money laundering. Inkombank collapsed in October of 1998. It has been widely reported that Inkombank was closely tied to Russian organized crime groups. Recently, the Russian Procurator General’s office opened a criminal investigation into Inkombank’s dealings in the US. Russian authorities requested the US Justice Department to help obtain information concerning certain money transfers from the Bank of New York to another Russian mob-linked bank Nizhegorodets. In February of last year BoNY’s former vice president Lucy Edwards pleaded guilty to a variety of Federal charges, including money laundering. Another former BoNY associate, Svetlana Kudryavtseva, pleaded guilty to obstructing justice and lying to FBI agents. BoNY itself has not been charged with any wrongdoing.

On March 2, US District Judge Denny Chin, presiding over the shareholders’ lawsuit, ordered the chairman of the Bank of New York Company, Thomas A. Renyi, to surrender several years of tax returns, telephone records, and credit card statements.

BoNY lawyer Richard Klapper of the New York based Sullivan & Cromwell argued at a hearing that the plaintiffs were invading Mr. Renyi's privacy. He also claimed that that release of the records would help plaintiffs' witnesses to "construct perjured testimony and forged documents."

But Judge Chin rejected Mr. Klapper's argument and stated curtly: "The documents are to be produced within two weeks from today." The Judge also ordered BoNY's boss to submit to deposition questioning by the plaintiffs' lawyers. Mr. Renyi's deposition is expected to take place in mid-April of this year.

Galina Orlovskaya, another witness in the case, testified in October last year that she  and another prospective witness were approached by Inkombank operatives, who attempted to bribe and threaten them to prevent their testimonies. .Shortly after Judge Chin ordered Mr. Renyi to submit his record and appear for questioning, BoNY lawyers issued at least a dozen subpoenas on multiple witnesses and potential witnesses demanding that they likewise produce their tax returns and personal records similar to those Mr. Renyi was asked to produce. "BoNY's mirror-image subpoenas on unrelated third parties are clearly retaliatory" said a source close to litigation. "There is a big difference between Mr. Renyi, who is the party in the case alleged to have been deeply involved in the money laundering schemes and non-parties, who simply testify about certain particular events" the source said expressing  concern that the private information obtained by BoNY's subpoena is used by BoNY's Russian co-conspirators to harass, intimidate and injure witnesses.

Attorneys for the Bank of New York did not respond to our request for an interview and, according to sources, attempted to lobby the US Information Agency, in an effort  to stop the Voice of America Radio from reporting on BoNY matters. USIA is an umbrella agency of VOA.