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. Last Updated: 07/27/2016

Emigre Lawyer Circulates Questionable Info




NEW YORK -- In the months since news broke that billions of dollars in suspect Russian money had flowed through the Bank of New York, an obscure, emigre lawyer has done as much as anyone to keep the story alive and build pressure on the bank.


Emanuel Zeltser, a classically trained pianist who passed the New York bar exam without any formal legal training in the United States, has positioned himself as the kind of savvy, inside source that journalists and investigators covet.


Material circulated by Zeltser and his associates has figured prominently in articles in the U.S. media. But a look at his business dealings and his past, based on interviews and court records, raises questions about whether reporters and others have been too willing to accept help from a person whose ethics and credibility are in dispute.


In court papers and sworn testimony, former business associates have accused Zeltser of faking financial and legal documents. An administrator of the Moldovan law school from which he purportedly graduated has signed an affidavit asserting that his law diploma is a "fabrication" - a significant charge because it was his Soviet-era law degree that allowed him to take the bar exam in the United States.


State and federal authorities are examining Zeltser's license to practice law in New York.


The federal investigation of the Bank of New York continues and the bank has acknowledged that it failed to supervise its Russian accounts properly. The bank has not been charged with wrongdoing.


Doubts have emerged about the authenticity of at least one document distributed to reporters by Zeltser and his associates - an internal World Bank memo that suggested an official at the bank was conspiring with a Bank of New York client to trade illegally on inside information.


Zeltser denied circulating forged documents and insisted in interviews that the accusations against him in court cases are attempts by Russian organized crime to silence him.


Zeltser's interest in the Bank of New York inquiry is not selfless.


Days after the story erupted, he laid the groundwork for a $2 billion lawsuit against the bank.


Zeltser emigrated from the Soviet Union in 1974. By the early 1980s he had undergone the first in a series of transformations, emerging as an entrepreneur.


Zeltser's associates, who have requested anonymity because they say they fear reprisals, have said his ventures netted substantial sums. Those ventures also produced several lawsuits.


In 1990, Zeltser took advantage of rules that allowed immigrants holding overseas law degrees to take the New York bar exam. He passed the bar exam on his first try.


He told New York legal authorities that he had received a law degree in 1974. Zeltser contended that the reason there was no record of his attendance was because he was enrolled in a top-secret program in international law.


Zeltser's nascent legal career got its biggest boost in 1993 when he began working for Russia's Inkombank.


The bank first retained Zeltser to handle lease disputes in New York. But Zeltser graduated to bigger things when he and Shearson Smith Barney stock broker Donald Redfern helped Inkombank establish a number of offshore accounts into which the Russian bank transferred about $30 million, according to court documents. Redfern declined repeated requests for interviews.


In short order, Zeltser moved several million dollars out of the accounts by doctoring forms and forging signatures, according to associates and to documents in a lawsuit Zeltser filed against Inkombank in federal court in Manhattan.


Zeltser disputed in court that he had stolen any money from Inkombank.


Inkombank fired Zeltser in 1994, and he sued the bank the following year.


That case foundered in 1998 when Inkombank became insolvent.


Zeltser's legal maneuverings against the bank appeared stalled until the news broke last August that federal investigators were looking into possible money laundering at the Bank of New York.


On Aug. 19, the day The New York Times first wrote about the Bank of New York inquiry this reporter received a telephone call that led to a meeting with Zeltser.


On Aug. 20, The Times published an article that examined the activities of Natasha Gurfinkel Kagalovsky, a former Bank of New York executive.


Zeltser was quoted in the article, and he was cited as the source for memos. Other than the Aug. 20 article, Zeltser has not been a source for any other articles in the newspaper.


After being quoted in The Times, Zeltser became a primary source for others in the news media.


On Oct. 22, The Wall Street Journal reported the World Bank was investigating whether a former Russian representative to the bank, Leonid Grigoriev, had provided inside information to Inkombank. Among the documents used by The Journal was a memo purportedly written by Grigoriev to Inkombank officials.


Zeltser said he had provided the memo to The Journal. Later, a longtime associate of Zeltser's, Maria Berdnikova, asserted that she had provided the memo to The Journal.


The memo discusses ways to profit from inside information about the Russian bond market.


Andrei Bugrov, Russia's representative to the World Bank and the official from whose office the memo was purportedly sent, said he had told The Journal before the inquiry began that he thought the memo was a fake.


The World Bank's investigation of Grigoriev is continuing, and Grigoriev did not respond to interview requests.