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LAW BoNY
Lawyers Argue in Court that Russian Justice Ministry is not a Government Body
by: Rod DOZOROV in Moscow and Andy LIGHT in Washington
New York, November
10. (MT-Wire) Bank of New York lawyer, Richard Klapper, submitted an affidavit in New York
federal court stating that the Ministry of Justice of Russia is in reality a "bar
association", not an agency of the Russian Government.
This incredible
suggestion was proffered shortly after former Deputy Minister of Justice of Russia,
Vladimir Postyshev, came to New York to give testimony in the case of BoNY's shareholders
against it management. Mr. Postyshev testified that in April of 1996 he sent a letter to
the then BoNY CEO, J. Carter Bacot, asking for BoNY's cooperation in investigation of the
Russian the bank, Inkombank, BoNY's largest Russian correspondent bank at the time.
Inkombank lost its banking license in 1998 and is now being liquidated. The significance
of the letter is that BoNY had known since at least early 1996 that Inkombank may have
been involved in unlawful activity. Mr. Postyshev recently testified in Washington D.C. in
the case brought by BONY’s shareholders against its management in the US Federal Court.
Mr. Postyshev provided additional documents warning BoNY about “incestuous”
relationship between the principals of Inkombank and BONY’s senior management.
In the affidavit BoNY
lawyers also accused Mr. Postyshev of “fabrication”, but could not provide any
evidence supporting this charge. “They must be desperate” - said Mr. Postyshev in an
interview, “they know they can’t counter the evidence of BoNY’s involvement in money
laundering and resort to smearing everybody who may give evidence concerning this
wrongdoing.” Prior to accusing Mr. Postyshev, BoNY made similar allegations about
Emanuel Zeltser, a director of the New York based American Russian Law Institute and one
of the lawyers representing depositors of Inkombank who lost their saving when Inkombank
collapsed. (See MT of September 12 The Bank of New York Management Attacks Director of
American Russian Law Institute - click here )
At a hearing held before
presiding federal judge Denny Chin, Mr. Klapper argued that the court should stay all
discovery by plaintiffs to give BoNY the opportunity to investigate the allegations of
wrongdoing on its own. BoNY recently retained the prominent Washington law firm of
Venable, Batcher, Howard and Civiletti to conduct the probe into the charges brought by
BoNY shareholders. Last October the Venable firm was likewise hired by the World Bank to
investigate widely reported alleged misconduct of its Russian former official, Leonid
Grigoriev, also involving Inkombank. After eight months of investigation conducted in
utmost secrecy, Venable reportedly found no evidence to support allegations levied against
Grigoriev, clearing the cloud which was hanging over the World Bank. At the hearing in
federal court, BoNY lawyers argued that the World Bank investigation was conducted by
completely different lawyers at the Venable and thus would not taint their investigation
of the alleged wrongdoing at the Bank of New York.
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