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. Last Updated: 07/27/2016

London Firm May Be Linked to Scandal

NEW YORK -- Investigators in New York are looking into a now-defunct London law firm for clues to the genesis of the Russian money movements through the Bank of New York that are now under federal investigation, according to officials with knowledge of the investigation.

The officials said the firm, Talbott, Creggy & Co., was first investigated by British and U.S. authorities for its role in setting up offshore shell companies that were supposedly involved in money laundering and stock fraud. The firm was subsequently disbanded and two lawyers have been arrested.

These investigations identified links between some of the suspect offshore companies and two companies - the Benex International Co. and Becs - now identified as the primary pipelines through which at least $7.5 billion from Russia has moved through the Bank of New York since 1996.

The link brought investigators from Britain's National Crime Squad to New York in the fall of 1997 seeking the assistance of the Manhattan District Attorney, Robert Morgenthau.

Investigators said the Talbott, Creggy law firm had set up a number of shell companies for Russians, some of which had dealings with Benex.

The exact source of the Russian funds at the Bank of New York is still unknown. While a significant portion was apparently related to tax and customs duty avoidance schemes, investigators believe the funds also may have involved organized crime proceeds, corporate embezzlement and possibly political graft. No charges have been filed in the United States, but a grand jury has been impaneled in the matter.

In the case of the London law firm, two lawyers, Andrew Warren, 43, and Stuart Creggy, 60, were arrested by British authorities in 1998 on money laundering and stock fraud charges and are still in custody in Britain. The two men could not be reached for comment.

Warren was indicted on stock fraud charges in June by Morgenthau. He is trying to extradite Warren so he can be tried in the United States.

Law enforcement officials said shell companies set up by the British firm did business with Benex and Becs, and investigators believe that Warren can play a crucial role in unraveling much of the mystery that surrounding the companies.

An examination of Benex and Becs in 1997 led Morgenthau's office and Britain's National Crime Squad to the Bank of New York in early 1998.

According to a March 1998 memo from the district attorney's office to the U.S. Customs Service, hundreds of thousands of dollars a week were moving through Benex into Bank of New York accounts controlled by a Russian living in London and New Jersey who could not be located and whose background remains unclear.

The FBI began examining the Bank of New York in September 1998. The bank has not been charged with any crimes. Talbott, Creggy's former offices were in a brownstone in central London that housed three other law firms. British and U.S. authorities say the stock fraud scheme was hatched from these offices and included bribes supposedly paid to a former African diplomat to help register shell companies in Africa. The Manhattan District Attorney's Office believes that a similar scheme may have been engineered for Benex.