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. Last Updated: 07/27/2016

Banks Bristle at Crime Link Charge

Russian banks expressed outrage Tuesday at a magazine article that claimed organized crime controls between 50 to 80 percent of the Russia's lenders and has turned the country into one of the biggest money-laundering centers in the world.


Inkombank, one of the biggest and most well-established Russian banks, called the publication a "libelous accusation" and said the figures and facts quoted by New York magazine would not stand up to scrutiny.


"This article aims to discredit the Russian bank community and hold back the advance of the Russian banks into international financial markets," Sergei Zatsepilov, Inkombank's spokesman, said Tuesday.


The magazine published Sunday the results of an eight-month investigation by reporter Robert Friedman, asserting that since January 1994 more than $40 billion in new $100 bills has been shipped to Russia to meet orders from Russian banks, an amount that far exceeds the total value of all rubles in circulation.


The article added that from Monday through Friday of any given week, at least $100 million a night is flown from New York's JFK airport to Moscow, where the money "is used to finance the Russian mob's vast and growing international crime syndicate," including drug dealing.


"I don't think we should pay attention to another piece of nonsense," said an Alfa-Bank official, who asked not to be identified.


Officials at the Association of Russian Banks, which represents Russia's more than 2,500 commercial lenders, could not be reached for comment.


Officials at the Central Bank of Russia's foreign-exchange control department refused to comment Tuesday. Friedman's article quoted a bank official's cable that "warned that much of this [imported] money was being used for illegal purposes, including narcotics trafficking."


Zatsepilov said Inkombank, among a number of other Russian banks, imports cash dollars in accordance with a general license from the Central Bank. He said the bank imports money only to cover demand from regional branches and withdrawal requests from companies and individuals


Banks must provide the Central Bank a documents explaining all hard-currency imports and withdrawals, he said.


"Every month Inkombank sends a number of reports to the Central Bank with details of the import and use of cash hard currency," Zatsepilov added.Friedman said the U. S. Federal Reserve Bank sanctioned the selling of the enormous amount of $100 bills and the New York-based Republic National Bank, which specializes in selling currency, had taken a lead in providing the cash to Russian commercial institutions.


A spokesman for Republic National Bank said Sunday that Friedman's article with respect to the bank was "false, malicious and defamatory, a concoction of lies, misinformation and innuendoes" compounded by quotes from unidentified sources. The spokesman added that Republic's lawyers "are reviewing the article and will take appropriate action." Reuters said.