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CAN AMERICA’S COSTLIEST SLEUTH SAVE THE BANK OF NEW YORK? 
BoNY hires Jack Palladino to go after unfriendly lawyers and witnesses

 

New York, July 12, 2002 (MT) A $250 an hour San Francisco dick, Jack Palladino, boasted in a 1999 interview with SF Examiner Magazine: "I am somebody you call in when the house is on fire, not when there's smoke in the kitchen...You ask me to deal with that fire, to save you, to do whatever has to be done to the fire...People call me when they are in a great deal of trouble, and sometimes a great deal of pain."

Palladino, once depicted by New York Times columnist William Safire as one of the "low-lifes [who] do well by doing ill", may be within his rights to swagger. His client list is truly impressive and includes President Clinton and celebrities like Don Johnson, Kevin Costner, and Robin Williams. To that exclusive roll Palladino has now added a new colorful client, the Bank of New York.

Recently, BoNY’s lawyer, Todd Cosenza of New York based Sullivan & Cromwell, informed opposing lawyers that Palladino’s firm, Palladino and Sutherland, had been hired by BoNY “to investigate allegations” of plaintiffs’ complaint. Plaintiffs however believe that Palladino was sent on a less benign mission: to harass and intimidate opposing lawyers and witnesses who give evidence regarding BoNY’s alleged involvement in fraud and money laundering. American Russian Law Institute, a New York based not-for-profit public policy research and advisory organization, issued a witness alert warning potential witnesses to exercise caution when approached by Palladino gumshoes and urging them to report any abuses to authorities. 

Be that as it may, Palladino himself admits that he is called to the rescue when his clients’ house is on fire and when they are “in a great deal of trouble.” That begs a two-fold question: is BoNY’s house on fire and can the self-styled Sherlock save it?

BoNY has been embroiled in criminal probes and civil litigations stemming from a 1999 scandal involving alleged laundering of Russian mob money. Prosecutors say that from 1995 until 1999, $7 billion was transferred through the bank's accounts from Russia. BoNY’s former vice-president, Lucy Edwards, and her husband, Peter Berlin, pleaded guilty to a variety of federal criminal charges, including illegal banking activity, bribery, visa fraud and money laundering. BoNY itself has not been charged with any wrongdoing and is said to be cooperating with Federal investigations.

BoNY also has been named defendant in a multi-million dollar lawsuit brought by the shareholders of a now defunct Russian bank, Inkombank. Inkombank, once one of the largest privately owned Russian banks, collapsed in 1998 amidst revelations of massive fraud, organized crime ties, involvement in drug trafficking and other crimes. Shareholders have already obtained an $80-million judgment against Inkombank but are unlikely to collect because of Inkombank’s bankruptcy and liquidation. The lawsuit alleges that Bank of New York, then the primary US correspondent of Inkombank, aided and abetted Inkombank in bilking investors out of $40 million. BoNY concealed Inkombank wrongdoing and persuaded the plaintiffs not to withdraw their investment in 1996, the lawsuit alleges.

BoNY publicly denied any wrongdoing and labeled investors’ allegations “meritless.” But as the trial approaches BoNY is growing increasingly nervous, sources familiar with the matter say. At stake is more than the possibility of a hefty verdict against the bank. If BoNY loses in court, it will all but certain bring the nearly forgotten evidence of BoNY’s “Russian roulette” back into the limelight of the media and law enforcement authorities.

Palladino to the rescue

Palladino, 57, first surfaced in the BoNY matter in late 1999. At that time he was hired by Natasha Gurfinkel-Kagalovsky, BoNY’s former senior VP in charge of its bygone “Eastern European Division”. That division was dismantled by the bank amidst the money laundering scandal.

Palladino and his operatives began appearing at the homes of lawyers opposing BoNY and witnesses who testified in related money-laundering proceedings. Even reporters who covered the scandal were not spared. One evening, a women who identified herself as Palladino’s “investigator” stormed the house of MT contributor Maria Berdnikova, and demanded through an outside door to know whether Maria was having an affair with Emanuel Zeltser, one of the plaintiffs' lawyers in the suits against Bank of New York and Inkombank. Palladino’s female-operative would not leave until Maria threatened to call the police. An hour later, the head honcho himself, Jack Palladino, sneaked passed the security guard in a Manhattan building and knocked at the door of Anna Reid, a lawyer and witness in the Inkombank lawsuit. Palladino tried to interrogate Ms. Reid about her “relationship with Zeltser.” Ms. Reid also threatened to call the police and Big Jack vanished.

Palladino recently re-surfaced, now wearing the Bank of New York cap. On June 18, Mr. Zeltser wrote to BoNY lawyers that Palladino’s cohorts “have been harassing non-parties and their relatives and friends in the US and Russia using false pretenses and attempting to confuse, intimidate and impede witnesses in these proceedings.” Mr. Zeltser demanded to know whether Palladino & Sutherland have now been retained by BoNY. BoNY lawyers reluctantly admitted to having hired Palladino, but denied that his assignment was to harass witnesses.

But one of the witnesses, who was a school-mate of Natasha Gurfinkel and testified in the BoNY proceedings, said that the Palladino gumshoes had unleashed a terror campaign against him. Palladino’s dicks approached his friends and neighbors in Russia saying that they must find him “in connection with an inheritance in the US”. They also papered his neighborhood with fliers containing his picture. The witness’ Moscow lawyers of the well known firm of Kuznetsov & Partners, have alerted local authorities to defendants’ campaign of harassment and intimidation of their client. At least one of Palladino’s agents, by the name “Gayk”, appears to have ties to organized crime in the former Soviet republic of Armenia.

“Clearly, Palladino’s mission is to dig up dirt on opposing lawyers, especially on Zeltser”, said one source familiar with the matter. The stuff Palladino is commissioned to fish for may be irrelevant to these court proceedings, but if he finds or concocts some compromising material, BoNY's well-connected lawyers may use it incognito outside the courtrooms to discredit Zeltser and "chill" witnesses, another source said.

To our question whether BoNY hired the super-dick because its “house was on fire”, the source responded: “I can’t say about the whole house but some at BoNY certainly feel heat under their behinds.” Whether or not Palladino will succeed in covering these behinds remains to be seen.

Palladino has not responded to our request for comment.


 

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