Court Calls for Break in BoNY Case

The Moscow Arbitration Court called a break in hearings in a $22.5 billion lawsuit brought by the Federal Customs Service against the Bank of New York as wrangling continued over a document the bank's lawyers say was forged.

Judge Lyudmila Pulova said hearings would reconvene Feb. 27 and called on the customs service to provide an original copy of the document that empowered Steven Marks, an attorney at Miami-based Podhurst Orseck, to represent it. Marks was not present at Wednesday's hearing.

In a session last week, Bank of New York lawyer Ivan Marisin argued that Marks' power of attorney was invalid. While dated April 27, 2007, the document empowering him was on a letterhead that incorporated a "heraldic shield" in its design and only came into use with the service after October, Marisin said Wednesday.

Lawyers for the customs service did not present the original power of attorney Wednesday. Instead, they submitted documents they said proved its validity. Marisin was "dragging out" the case by requesting the original document, they said.

The Customs Service suit was filed last year and stems from a U.S. investigation that ended in 2005 with the bank admitting it failed to report $7 billion in suspicious Russian transactions and agreeing to pay $38 million to settle two criminal probes. The damages are based on the amount of tax the customs service says was dodged under the transactions.