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. Last Updated: 07/27/2016

Report: Milosevic Sent Cash Via Russia

Former Yugoslav President Slobodan Milosevic during his years in power funneled from $3 billion to $4 billion out of his country with the help of the Yugoslav Embassy in Moscow, a Serbian-language weekly magazine has reported.

Quoting unnamed banking sources, the magazine Reporter alleges Milosevic was sending cash through diplomatic mail to Belgrade's embassy in Moscow.

The Reporter wrote that in Moscow the money was handled personally by former Yugoslav Ambassador Danilo Markovic and later by his successor Borislav Milosevic, who is Slobodan Milosevic's brother.

Yugoslavia was under UN economic embargo at that time and its banks were not allowed to operate abroad. The embargo was lifted just days after Milosevic was defeated in presidential elections this fall.

"Milosevic's money" was transferred from Russia to Tajikistan through a Moscow-based bank, Wexim Bank, and then on to South Africa, Kuwait and Lebanon, the weekly said.

The Russian Foreign Ministry had no comment Thursday. But both the Yugoslav Embassy and Wexim Bank fervently denied the report.

Ambassador Borislav Milosevic called it "utter stupidity."

"I don't know about any money whatsoever, apart from what was designated by the [Yugoslav] budget for the maintenance of the embassy," he told Interfax.

In a written statement, Wexim Bank said the report "had no connection to reality." "The bank never had anything to do with the political or business activities of Slobodan Milosevic or his family," the statement said.

The bank's lawyer, Nikolai Fomin, said in a telephone interview Thursday that the bank will demand an official apology from Kommersant newspaper, which published its own account partially based on the Reporter article.

Fomin did volunteer that the bank offered foreign money transfers as a service to clients. He added, "But these are small sums — a few hundred dollars, maybe a few thousand, not more. And we do it in accordance with the law, like any other Russian bank."

Fomin initially refused to discuss the ownership structure of Wexim Bank — where everybody spoke fluent Serbian. He would only say that it was a Russian bank registered with the Central Bank.

A data base of the Moscow Registration Chamber's documents indicated that Wexim Bank has eight founders: six of them Russian companies that each held 5.3 percent of shares; one a Moscow subsidiary of a Cyprus-registered company called Protoneks that employs five people, holds 31.5 percent of Wexim Bank shares and is run by one Mirsolav Vrbaski (a Yugoslav name); and the eighth, with 36.7 percent of shares, the Moscow-based company Yugo-Consulting.

Contacted again later, Fomin confirmed that the ownership structure was correct. He also said the bank was headed by a Yugoslav citizen, Milos Mirkovic.

Kommersant's report Thursday also quoted a deputy director of MDM-Bank as saying the scheme described in the Reporter was plausible.

"Using diplomatic mail for sending money is feasible. A million dollars in $100 bills weighs only 10 kilograms and anyway weight is not a problem for diplomatic mail," MDM's Vladimir Rashevsky told the newspaper.

"If participants in this scheme managed to find a Russian bank that agreed to take this cash, they would have solved the problem of the economic embargo."