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. Last Updated: 07/27/2016

Prosecutor Targets Ex-Central Bankers




Russia's prosecutor general said Tuesday that his office has opened criminal cases against several former top Central Bank officials on charges of misusing government funds and insider trading, Interfax reported.


The ex-employees are suspected of having diverted Central Bank funds and then using privileged information to invest in the now-collapsed treasury bill market, Prosector General Yury Skuratov said at a news conference. They are also being investigated for having carried out illegal currency exchange transactions, he said.


The announcement follows the prosecutor's seizure of client records at the Moscow Interbank Currency Exchange last week, and Skuratov said Tuesday those records confirmed suspicions that Central Bank officials had been involved with insider trading in the days leading up to the Aug. 17 fall of the T-bill market.


The Central Bank's previous leadership committed "gross violations of the law," the prosecutor general was quoted by Interfax as saying. For example, he said, the Central Bank had issued a permit for a foreign-exchange transaction two years after the deal took place.


Skuratov offered no further details about the alleged wrongdoings.


Preliminary probe results are being sent to Central Bank chairman Viktor Gerashchenko to help him "avoid repeating the same errors," Skuratov said.


At a separate news conference Tuesday, former Central Bank chief Sergei Dubinin denied knowing about any illegal activities that may have taken place at the bank during his tenure, Interfax reported.


"The Prosecutor General's Office did not ask me any questions within the framework of a probe into this problem, nor did Skuratov quote any facts regarding it, so I cannot understand which gross violations of the law are meant here," Dubinin was quoted by Interfax as saying.


"I don't know anything about the use of T-bill information by an official for his own interests," he added.


Dubinin, who is currently a vice president at state gas monopoly Gazprom, said he personally had not taken part in the T-bill market.


The Moscow Interbank Currency Exchange, or MICEX, was ordered by the prosecutor's office on Nov. 3 to turn over a copy of its database containing T-bill operations from 1993 to Nov. 1, 1998.


The investigation into former Central Bank officials is among several cases that the Prosecutor General's Office is conducting as the government attempts to find out what led to the current economic and political crisis.


Parliament deputies and journalists alike have alleged that graft in the Kremlin shares part of the blame.


Yabloko faction leader Grigory Yavlinsky recently charged the Kremlin with continuing to harbor corruption by allowing tarnished officials to hold top Cabinet posts. Among others, Yavlinsky named Deputy Prime Minister Gennady Kulik and suggested he had not kept his hands clean in the government's failed Harvest-90 bond scheme in 1990.


Under the defunct program, the government bought produce from farmers with the bonds, which were then supposed to be redeemed with domestic appliances and automobiles. The state never fulfilled those obligations.


Skuratov said Tuesday that he would re-examine his office's criminal probe into the bond scheme and invite Yavlinsky to share any new information he had about it, Interfax said.


Skuratov also said he would call in Artyom Borovik, the publisher and editor of the tabloid Sovershenno Sekretno, or Top Secret, to discuss his allegations that a ministerial portfolio in the government of Prime Minister Yevgeny Primakov was purchased for $13 million.