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. Last Updated: 07/27/2016

Italy Revisits Scandal Over Borodin's Deals

Italian prosecutors on Tuesday said they had issued an arrest warrant for the daughter of Pavel Borodin, a top-ranking Russian official, in a widening money-laundering investigation.

Prosecutors in the town of Trento are seeking the arrest of Borodin's daughter Yekaterina Siletskaya as well as eight other Russian citizens, including Yevgeny Ananyev, the scandal-tainted former head of state arms export agency Rosvooruzheniye, lead investigator Paolo Storari said by telephone.

Prosecutors believe the group laundered $62 million in kickbacks for Kremlin reconstruction contracts handled by Swiss-based firm Mercata, he said.

"We have sent a request for mutual assistance to Russia. But we have not had an answer yet," he said.

"Many countries are involved. They washed money in Italy, Switzerland, Monte Carlo, France, Germany, the Isle of Man, Guernsey, Cyprus and the United States. ... Sixty-two million dollars is not small money."

The investigation appears to reopen a scandalous affair. Swiss prosecutors charged Borodin in 2001 with laundering $30 million in kickbacks while he was head of the Kremlin's powerful property department.

Borodin, who now works as the secretary of the Russian-Belarussian Union, was detained in the United States for three months in 2001 before being transferred to Switzerland and eventually extradited to Russia.

Borodin was later convicted by a Swiss court, but the furor surrounding the case died down after he was fined $177,000.

Borodin's press secretary on Tuesday lashed out at the new charges, which were first disclosed in the Italian daily Corriere Della Sera.

"What the Italian newspaper is claiming is the next link in an old, rotten chain of lies, which have been denied several times," Ivan Makushok said, Interfax reported.

"The same old compromising material is hung out every time there are serious movements toward building a union between Russia and Belarus."

The latest probe began with an investigation into the business dealings of former arms trader Ananyev, whom Italian prosecutors charged last year with laundering millions of dollars through Italian banks together with his girlfriend Olga Beltsova and financial consultant Giulio Rizzi.

Italian prosecutors allege that he and his partner Vladimiro Montesinos Torres -- then Peru's national intelligence chief -- diverted $18 million into their own accounts from a $117 million deal to sell three MiG fighter jets to Peru.

A Peruvian court convicted Montesinos Torres of corruption and drug trafficking in 2002 and sentenced him to nine years in prison.

"This all began with Montesinos Torres," Storari said. "But [the new probe] has nothing to with arms. It's just corruption."