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. Last Updated: 07/27/2016

Frenkel: Central Bank Dirty

Alexei Frenkel, charged last week with organizing the murder of Central Bank official Andrei Kozlov, claims that the bank is plagued by corruption and involved in shady financial transactions.

In an open letter published Friday on the Kommersant web site, Frenkel accused the Central Bank of being complicit in allowing customers of suspect banks to make cash withdrawals after it had cited those banks for illegal activities.

Kozlov spearheaded the Central Bank's campaign to clean up the banking sector. Frenkel is the CEO of VIP Bank and a co-founder of Sodbiznesbank, whose licenses Kozlov revoked on suspicion of money laundering and other crimes.

In its crackdown on bad banks, the Central Bank relies largely on the federal law on money laundering.

In his letter, however, Frenkel points out that money laundering is in fact relatively rare in Russia, where most often banks convert various forms of easily traced noncash assets into cash, which is much harder to trace.

Frenkel also said the Central Bank made willingness to assist in such operations a condition for admission to the federal deposit insurance program for many small and medium-sized banks.

The Central Bank on Friday declined to comment on Frenkel's allegations.

First Deputy Prosecutor General Alexander Buksman told Interfax that the publication of the letter was intended to distract investigators from building a murder case against Frenkel.

Frenkel's lawyer, Igor Trunov, told Kommersant that had nothing to do with the publication of Frenkel's letter, adding that he would have advised his client not to make it public because the accusations contained in it were "too serious."

Trunov could not be reached for further comment Sunday.

Kommersant reported that Frenkel had sent the letter by e-mail to Alexei Mamontov, head of the Moscow International Currency Association, on Nov. 6, 2006. Last Thursday, Frenkel's father, Yefim, met with Mamontov and asked him to release the letter to the media.