The Money plane
© Official site for the takeover of the economy financed by royalties FERRAYE - 2016
Worldcorruption.info
BernLeaks
January   1996,   A   New   York   Times   investigation   already   denounced   some ways   in   which   swindled   royalties   on   FERRAYE's   patents,   have   been   laundered   in   hundreds   of   billions   of dollars,   with   the   complicity   of   the   Federal   Reserve   (FED)   and   the   US   Government.   The   res ponsability   of   the United States is thus involved for T housands of billion dollars Investigation by Robert I. Friedman published on 22 janvier 1996 Every   day,   the   Russian   mob   gets   a   shipment   of   up   to a   billion   dollars   in   fresh   USD   100.-   bills.   The   money flown   out   of   JFK   Airport,   comes   straight   from   the U.S. Federal Reserve... Five   nights   a   week,   at   le a st   US D   100   million   in   crisp   new USD   100   bills   is   flown   from   JFK   nonstop   to   Moscow, where   it   is   used   to   finance   the   Russian   mob's   vast   and growing   international   crime   syndicate.   State   and   federal officials    belie ve    it    is    part    of    a    multi-billion    dollar money-laudering    operation.    The    Republic    National Bank   [SAFRA]    and   the   United   States   Federal   Reserve prefer    not    to    think    so.     (In vestigat ion    by    Ro bert    I. Friedman) .
Owner of the Republic National Bank of New York, the banker Edmond Safra was murdered on 03.12.1999.  He was then the friend of the Geneva lawyer Marc BONNANT who
The Money plane
who drafted the criminal complaint of January 29, 1996 that had helped to sequestrate the trillions of dollars swindled on the royalties on the sale of patents FERRAYE. A federal officer confirms :      « This money is used to support organized crime; It is used as support for operation of the black market ».       « In my personal opinion, it is an abomination. but it seems that at least part of the federal government sees nothing wrong with that ».
         A   few   minutes   later,   another   armored   truck   rolls   up   and   unloads   another   series   of   even   larger   bag s.   In   total,   this flight will carry about 2'300 pounds of USD 100 bills, or USD 100 million.          The   plane   departs   JFK   at   5:45   P.M.   Trhoughout   the   flight,   an   unarmed   courrier   for   the   Republic   National   Bank   of New   York   unwinds   in   the   passenger   cabin   while   the   money   "sits   all   by   its   lonesome"   in   the   cargo   hold,   according   to one   law-enforcement   source.   Upon   arrival   at   sheremetyevo   airport   at   10:55   A.M.   Moscow   time,   the   money   is transported   by   more   armored   trucks   to   Russian   banks,   which   have   puchased   the   USD   100   bills   on   behalf   of   clients, who typically pay for the cash with wire transfers from London bank accounts          Rather   remarkably,   no   one   has   ever   tried   to   hijack   Delta   Flight   30,   even   though   it   has   left   JFK   at   the   same   time five   days   a   week   -   rarely   carrying   less   than   USD   100   million   and   sometimes   more   than   USD   1   billion   -   for   more   than two   years,   since   January   1994,   federal   authorities   estimate   more   than   USD   40   billion   -   all   in   uncirculated   USD   100 bills,   hundreds   of   tons   of   cash   -   was   shipped   to   Russia.   That   far   exceeds   the   total   value   of   all   the   Russian   rubles   in circulation.   All   that   money   has   remained   safe   only   partly   because   of   security:   another   reason   is   that   anybody   who might be inclined to pull off such a heist ist also well aware of who is buying all those USD bills.    « If you rip off Russian banks, you rip off the Russian mob" says one Mafia source here in the United States ».    « And no one's got big enough balls or a small enough brain to do that ».          The   Russian   mob   –   according   to   numerous   well-placed   law-enforcement   sources   interviewed   by   New   York   –   has been    using    an    unimpeded    supply    of    freshly    minted    Federal    Reserve    notes    to    finance    a    vas    and    growing international   crime   syndicate. American   C-notes   are   the   unofficial   currency   of   Russia,   of   course,   and   can   get   things done   there   that   rubles   cannot:   but   the   hundreds   are   also   being   used   to   fuel   the   Russian   mob's   flourishing   dollar- based   global   drug   trade,   as   well   as   to   buy   the   requisite   villas   in   Monaco   and   Cannes.   The   Russian   Mafiya   has   also used   laudered   funds   to   set   up   operations   abroad,   including   its American   offshoot   in   Brooklyn's   Brighton   Beach   (The Organizatsiya",   New York,   November   7,   1994)   and   has   begun   investing   in   legitimate   businesses   across   Europe   and in the United States.          The   Russian   mob's   monstrous   growth   has   been   aided   considerably   by   its   ability   to   quickly   and   easily   launder   its dirty   criminal   proceeds   into   clean   -   and   now   supposedly   counterfeit-proof   -   U.S.   hundreds   Russian   banks   have   been eager   to   assist,   which   is   not   terribly   surprising   given   that   a   good   number   are   owned   outright   by   Russian   mobsters. "Almost   all   Russian   banks   are   corrupt",   Major   General   Alex   GROMOV   of   the   Russian   tax   police   told   a   september 1994    international    conference    on    Russian    organized    crime    co-sponsored    by    Financial    Crimes    Enforcement Network,   which   tracks   money   laudering   for   the   U.S.   Treasury.   Fincen   director   Stanley   Morris   is   more   blunt   today   :   « Russia's banking system is a cesspool ».          In   fact,   the   Russian   banking   system,   little   over   six   years   old,   has   already   become   one   of   the   wold's   leading money-laudering   centers,   replacing   Panama   as   the   favored   dirty-currency   exchange   of   the   Colombian   cartel   and the   Italian   Mafia.   A   1994   CIA   report   identified   ten   of   the   largest   Russian   banks   as   mobbed-up   fronts.   And   in   his speech   to   the   United   Nations   last   October,   President   CLINTON   declared   Money   laudering   a   threat   to   national security.   "Criminal   enterprises   are   moving   vas   sums   of   ill-gotten   gains   through   the   international   financial   system   with absolute   impunity",   he   said,   signing   a   presidential   directive   ordering   the   attorney   general   and   the   Treasury   to identify individuals and organizations involved in global financial crime and seize their assets here and abroad.       So   then   why   are   Republic   National   Bank   and   the   U.S.   Federal   Reserve   continuing   to   supply   millions   of   crisp,   clean USD   100   bills   to   banks   that   so   many   money-laudering   experts   agree   are   tainted   ?   «   Republic's   guilty   of   willful blindness,   though   not   in   technical   violation   of   any   existing   law   »,   says   a   former   New York   State   Banking   Department official.   «   That   money   is   used   to   support   organized   crime;   it's   used   to   support   blackmarket   operations   »,   agrees   an official   at   the   federal   Comptroller   of   the   Currency   office,   which   regulates   Republic.   «   In   my   personal   opinion,   this   is an   absolute   abomination.   It   should   not   exist.   Yet   it   appears   that   at   l east   part   of   the   federal   government   sees   nothing wrong w i th it ».
           A   provision   in   the   1992 Annunzio   WYLIE Anti-Money   Laudering Act   requires   banks   to   make   sure   that   they're   not knowingly   doing   business   with   criminal   or   their   agents.   For   the   record,   the   Republic   National   Bank   [SAFRA],      which makes millions off the currency sales, insists it s certainly not knowingly selling USD 100 bills to mobsters.          «   That's   my   responsibility,   to   make   sure   we   don't   sell   to   the   banks   that   have   organized-crime   tics",   says   Richard ANNICHARICO,   one   of   Republic's   compliance   officials.   "That's   the   hardest   thing   to   find.   In   fact,   if   you   know   of   any, let me know ».         And   the   U.S.   Treasury,   which   makes   USD   99.96   off   of   any   USD   100   bill   that   leaves   the   country   and   never   comes back,   is   similarly,   blissfully   ignorant.   «   What   do   we   know   of   Republic's   customers   ?"   says   New   York   Fed   spokesman Peter Bakstansky. "We don't. It's their responsibility to know who they are sending it to ».          «   I've   run   out   of   places   to   check",   says   Republic's   ANNICHARICO,   a   retired   FBI   agent.   «   someone   tells   me   [the banks   are   corrupt]   and   gives   me   substantial   reason   why   -   you   know,   anything,   really   -   we   don't   sell   to   them.   I   mean, anybody who tells us not to, we'll stop them tomorrow ».          ANNICHARICO   acknowledges   that   a   federal   money-laundering   task   force   had   contacted   him   about   Republic's currency   trade   with   Russia.   «   The   task   force   told   me   that   they   think   Russian   organized   crime   is   involved   in   money laudering.   But   so   what   ?   »   he   says.   «   Who   ?   What   ?   Who   ?   No   one's   been   prosecuted.   What's   the   crime   ?   Tell   me   - I'll stop. I always tell them, Tell me which banks, and we'll stop I can't find them. I'm not being facetious ».          When   the   SOVIET   UNION   FELL   apart   in   1991,   so   did   the   entire   government-controlled   banking   system.   Replacing the   government   banks   were   private   institutions   chartered   and   supposedly   regulated   by   the   new   Russian   Central bAnk.   But   as   Major   General   GROMOV   told   the   international   conference,   the   application   to   charter   a   new   bank typically   consisted   of   making   a   USD   100'000   bribe   to   a   banking   official.   «   A   grossly   underregulated   banking   sector sprang   up   virtually   overnight   »,   says   Harward   economist   Jeffrey   Sachs.   «   Now   you   have   2'000   banks,   many   of   which are deeply undercapitalized, and therefore everything is possible ».          The   mob   saw   the   possibilities.   Also   known   as   the   VOROVSKOI   MIR,   or   Thieves'   Wjorld,   a   loose   federation   of Soviet   mobsters   immediately   grasped   that   the   end   of   Communism   heralded   a   glorious   new   world   criminal   order.   By 1992,   crime   was   the   only   growth   industry   in   Russia,   with   illicit   cartels   controlling   as   much   as   40   percent   of   the nations's   wealth;   the   country   had   become,   in   the   words   of   one   former   CIA   director,   a   "Kleptocracy".   And   having conquered Russia, the VOROVSKOI MIR was eager to expand.          On   July   2,   1993,   two   chartered   jets   touched   down   in   Yerevan,   the   capital   of   the   former   Soviet   republic   or Armenia, and   disgorged   a   panoply   of   wiseguys   from   the   United   States,   Germany,   Turkey,   Italy   and   South America.   They   had been   called   there   by   Rafik   SVO,   «   the   gangster   equivalent   of   an   international   diplomat   »,   according   to   Russian organized-crime   expert   Stephen   HANDELMAN.   SVO   was   determined   to   bring   order   and   mutual   prosperity   to   the thieves'   World   by   ending   bloody   turf   wars   and   forging   alliances   with   the   Sicilian   Mafia,   the   Brighton   Beach   gang,   and Colombian   drug   lords,   all   of   which   sent   emissaries. At   the   meeting   it   was   decided   that   the   Russian   banking   system, new   and   vulnerable,   would   be   used   to   launder   funds,   make   favorable   loans   to   "friends",   and   supplant   Zürich   as   a haven for dirty money. The big joke at the Armenian conclave was, « Why rob a bank when you can own one » ? (At   another   1993   summit,   between   Russian   and   Sicilian   mobsters   in   Prague,   the   Russians   agreed   to   launder   Mafia drug   profits   in   exchange   for   a   franchise   on   choice   narcotics-smuggling   routes   through   central   Asia.   Then,   last January   (1996)   in   Puerto   Rico,   a   third   super   summit   was   called   to   settle   increasingly   internecine   battles   and   to   carve up   the   Russian   drug   trade.   Shortly   before   the   meeting.   a   Russian   banker   in   New   York   was   overheard   on   an   FBI wiretap saying he was going to Puerto Rico « to discuss who we will kill »).          Russia,   not   exactly   unschooled   in   the   ways   of   corruption,   quickly   took   to   the   new   system;   politicians,   cops,   and government   bureaucrats   joined   the   fold.   The   country   was   already   awash   in   dirty   money,   and   not   just   as   a   result   of traditional   organized-crime   activities.   Soviet   generals   ransacked   military   arsenals   and   sold   them   to   shadowy   arms dealers   or   even   shadowier   terrorists.   (just   last   month,   Admiral   German   UNGRYUMOV   warned   that   the   Russian Mafiya   was   looting   weapons   from   the   Russian   Pacific   Fleet's   arms   depot   in   Vladivostok,   after   security   agents arrested a navy officer and confiscated nine pounds of platic explosive and a large quantity of armmunitions).          U.S.   officials   privately   complain   that   billions   in   aid   have   gone   into   Russian   banks,   never   to   be   seen   again.   In   the first   two   years   after   the   fall   of   Communism,   between   USD   60   billion   and   USD   70   billion   worth   of   rubles,   gold,   and other   material   assets   were   spirited   out   of   the   former   U.S.S.R.   by   the   criminal   elite,   a   mélange   of   gangsters   and   black marketers, unemployed KGB spies, and Communist Party hacks            At    the    center    of    the    looting    is    the    Russian    banking    system.    Since    there    are    no    regulatory    controls    over proprietorship,    even    felons    are    permitted    to    own    banks.    What's    more,    there    are    no    money-laundering    laws, regulatory   agencies,   or   depositor   insurance.   The   Russian   Central   Bank   is   notoriously   lax   in   exercising   control   over the   nation's   nascent   financial   system   -   a   point   Russian   central-banking   officials   readily   concede.   Last   September   13 (1995),   in   a   meeting   in   Moscow   with   State   Department   envoy   Jonathan   WINER,   Viktor   MELNIKOV,   the   Central Bank's   director   for   foreign-exchange   control,   "expressed   great   concern   about   the   state   of   the   Russian   banking system,   citing   estimates   that   anywhere   from   50   to   80   percent   of   Russian   banks   were   under   the   control   of   organized crime",   according   to   a   State   Department   cable   obtained   by   New   York.   MELNIKOV   also   warned   that   "much   of   this [imported U.S.] money was being used for illegal purposes, including narcotics trafficking" and currency smuggling.       Initially,   the   mob   used   Russian   banks   just   to   park   their   money.   Then   they   began   to   "buy   banks,   to   find   out   who   has big    deposits    so    they    knew    who    to    kidnap",    says    Jack    BLUM,    a    Washington    lawyer    who    directed    Senate investigations into money laudering in the late eighties.       Russian   banks   took   in   huge   deposits   of   narco-dollars   from   South   America,   converting   them   to   rubles,   then   back into   dollars   through   European   and   U.S.   banks.   In   essence,   the   Russian   banking   system   had   become   a   giant Laudromat. «   It's   very   difficult   to   tell   from   the   outside   what   a   transaction   [with   a   Russian   bank]   really   means   »,   says   the   State Department's   WINER.   «   There   are   not   a   lot   of   public   documents.   You   can't   go   to   an   SEC   to   look   at   a   balance   sheet for   a   Russian   firm   the   way   you   ca   in   the   United   States.   You   can't   go   to   a   bank   regulator   and   [find   out]   what   kinds   of loans   have   been   made,   what   the   underlying   source   of   capital   is,   or   any   other   number   of   key   issues,   let   alone   who their customers are ». «   These   are   issues   which   the   Russian   Central   Bank   is   concerned   about   »,   WINER   says.   «   These   are   issues   which the   Russian   Association   of   Bankers   is   concerned   about,   because   they   are   not   unrelated   to   the   murder   of   the bankers  ».          More   than   a   dozen   Russian   bankers   have   been   killed   since   1994   -   one   for   simply   refusing   a   loan.   Many   more   have been   threatened.   The   deputy   superintendent   of   the   New   York   State   Banking   Department,   Robert   H.   McCORMICK, says he has heard stories of Russian bank examiners being chased out in a hail of gunfire.             «   It's   very   frightening»,   says   Dan   GELBER   minority   chief   counsel   of   the   Senate   Subcommittee   on   Investigations, which   has   held   hearings   on   Russian   crime..   «   What   [do]   you   do   with   a   bank   that   from   top   down   is   not   honest   ?   I mean, it almost creates a situation where there is no remedy » ?       More   savvy   Russian   hoods   have   hired   sophisticated   money   managers   and   international   lawyers   to   move   their   dirty money.   Increasingly,   they   have   purchased   European   companies   with   histories   of   legitimate   banking   activity   and   then used   them   as   conduits   to   pass   illicit   funds   into   the   international   banking   system.   More   ominously,   they   have   acquired hidden   control   of   banks   in   Austria,   Germany,   France,   Switzerland   and   England,   according   to   U.S.   law-enforcement sources.   Americans   doing   business   in   Russia   have   had   to   contend   with   «   a   banking   system   that's   so   bizarre   and rudimentary it's hard to lelieve". says Blum. "It's sort of like the Wild East ».       Meanwhile,   swaggering   Russian   dons   wearing   thirties-style   Capone   garb   have   ratcheted   up   prices   on   the   luxury housing market from Rio to London's Soho district, paying for million-dollar properties with minty new USD 100 bills.          It   was   only   a   matter   of   time   befor   those   hundreds   started   coming   home   to America,   and   the   VOROVSKOI   MIR   with them.          AMERICA   HAS   BEEN   A   BEACON   FOR   the   Russian   mob   since   the   BREZHNEV   era,   when   Jewisch   gangsters   in the   thousands   were   lifted   out   of   the   Gulag   and   given   visas   to   emigrate   to   the   U.S.   under   refugee   status.   One   of   the biggest   was   Marat   BALAGULA,   a   brainy   black   marketer   originally   from   Odessa   who   made   an   art   of   evading   state and   federal   excise   tax,   on   gasoline   by   passing   it   through   a   daisy   chain   of   dummy   corporations.   «   "Marat   said   he read   about   capitalim,   and   he   knew   he   could   do   well   over   here   »,   says   Robert   EISENBERG,   BALAGULA's   self confessed   consigliere   and   a   New   York   lawyer   who   later   testified   in   federal   court   against   Getty   Oil   executives   for setting   up   gasoline-bootlegging   schemes   with   Russian   gangsters.   (In   1991,   the   Long   Island-based   Getty   became the   first   oil   corporation   in   recent   history   to   be   convicted   for   gasoline   bootlegging).   «   He   said   he   came   here   because he hated European languages. He said German grated on him ».          By   the   mid-eighties,   hundreds   of   millions   of   dollars   of   illicit   Russian   bootleg   money   was   flowing   into   the   U.S. banking   system,   where   it   was   cleanned   and   used   to   acquire   legitimate   businesses.   On   of   the   Russian   mob's principal   conduits   to   legitimacy   was   Marvin   E.   Kramer,   a   Brooklyn   lawyer   who   helped   the   bootleggers   evade paying   billions   of   dollars   in   gasoline   taxes   from   the   mid   eighties   through   the   early   nineties.   Whole   walls   of   his office   on   Avenue   U,   near   Coney   Island,   were   lined   with   black   binders   containing   the   paperwork   for   dummy corparations;   Russians   walked   in   and   bought   the   dummy   companies   literally   off   the   shelf,   and   used   them   to   set up   daisy   chains   to   avoid   paying   taxes   on   the   gas   they   sold.   Around   the   same   time,   KRAMER    was   doing corporate    work    for    a    number    of    legitimate    businesses,    including    the    up-and-coming    beverage    maker SNAPPLE ;   the   Russian   bootleggers   would   hand   out   with   SNAPPLE   executives   in   KRAMER   's   office,   where they   were   under   surveillance   by   a   state-and-federal   gasoline   bootlegging   task   force.   "Every   time   I   went   in there,   there   was   people   in   therere   from   Snapple   -   you   know,   big   shots,   the   owners   or   managers",   says   a   senior law-enforcement   source   who   worked   on   the   case.   "And   they   were   always   in   there   with   these   Russians".   It   is unknown   whether   the   Russians   -   ended   up   investing   in   the   then   privately   held   company   (Ouaker   Oats   later bought   SNAPPLE   in   1994   for   USD   1,7   billion,   after   which   the   br and   pr omptly   t an ked),   but   it's   unli k ely   t ha t Snap ple e x ec u tiv es  w o uld h a ve kno wn any investment money was d ir ty , the source sa y s .          Th e    Russian   bootleggers'   b a nk   o f   choice   was   th e   Republic National                 Bank [SAFRA],   whose   suspect   client   accounts   were   subpoenaed   by federal    officials    in    the late   eighties.   BALAGULA   and   dozens   of   other   Russians   -   the ones   who   hadn't   been killed   in   turf   battles   -   were   subsequently   convicted   of   gasoline   bootlegging.   KRAMER   himself   escaped   prosecution, testifying   for   six   hours   before   a   Long   Island   grand   jury   about   the   bootleggers   under   a   grant   of   immunity.   « The   grand jurors   wanted   to   hang   him   »,   says   the   source.   «   He   came   out   in   a   stretch   limo,   parked   it   right   in   front   of   the   window ».          The   bootlegging   prosecutions   proved   only   a   temporary   setback.   Long   envious   of   their   jewish   cousins   in   crime,   the VOROVSKOI   MIR   dispatched   Vyacheslav   IVANKOV   to   Brighton   Beach   in   1992.   IVANKOV   was   a   vory,   or   godfather, and   one   of   the   most   feared   gangsters   in   Russia;   once   in   New   York,   IVANKOV   quickly   muscled   in   on   the   Russian Jewisch   mob's   empire,   taking   over   its   extortion   racket   and   its   lucrative   narcotics   trade.   He   formed   "combat   brigades" run   by   an   ex-KGB   officer   to   collect   tribute   from   legitimate   businesses   worldwide,   arbitrate   disputes   between   Russian businessmen,   and   murder   rival   mobsters.   He   forged   alliances   with   other   Russian   gangs   across   North   America   and set   up   a   front   company   in   New York,   called   Slavic   Inc.,   to   launder   drug   money,   while   his   son   Eduard   based   in   Vienna «   conducts   a   wide   array   of   financial   and   banking   transactions   throughout   Central   and   Western   Europe   (including England)   in   an   effort   to   launder   proceeds   of   Ivankov's   illegal   activities      »,   according   to   an   FBI   affidavit   obtained   by New York.       Ironically,   it   was   a   Russian   bank   that   proved   to   be   IVANKOV's   downfall.   In   the   autumn   of   1994,   Bank   CHARA   in Moscow   collapsed,   and   depositors   lost   more   than   USD   30   million.   Some   USD   3,5   million   of   the   money   had   been invested   in   SUMMIT   International,   a   New   York   investment   house   set   up   by   two   of   CHARA   's   Russian   board members.   Soon   after   the   bank's   collapse,   CHARA's   president,   Vladimir   RACHUK,   was   killed   by   unknown   assailants in   Moscow.   Last   Spring   (1995),   his   successor,   Roustam   SADYKOV,   flew   to   New   York   to   as   SUMMIT’s   directors   to return   the   bank's   missing   funds.   When   the   directors   [SUMMIT]   refused,   SADYKOV   allegedly   asked   IVANKOV   to collect   the   debt.   The   following   month,   IVANKOV   and   two   henchmen   visited   SUMMIT's   Wall   Street   offices.   Summit's owners    and    former    CHARA    officials,   Alexander    VOLKOV    and    Vladimir    VOLOSHIN,    fled    in    terror,    eventually informing   the   FBI   that   they   were   being   exhorted   by   Ivankov.   The   men   were   later   kidnapped   at   gunpoint   from   the   bar oft   the   Hilton   hotel   in   Manhattan   and   forced   to   sign   a   contract   promising   to   pay   one   of   IVANKOV   's   associates   USD 3,5 million. As an inducement, the father of one of the men was shot to death in Moscow.          Early   on   the   morning   of   this   past   June   8   (1995),   the   FBI   yanked   a   startled   IVANKOV   from   his   mistress's   bed   in Brighton   Beach   and   charged   him   with   extortion. As   he   was   being   led   into   the   FBI   building,   a   defiant   IVANKOV   kicked and   spit   at   reporters.   «   Let   them   put   me   on   the   chopping   block   -   let   them   crucify   me   on   a   cross,   the   vory   later   told   a Moscow newspaper. I'm tough. I will survive ».       In   a   sense,   IVANKOV   does   survive.   The   money-laudering   colossus   he   helped   establish   now   circulates   tens   of millions   of   dollars   annually   in   the   New   York   area,   according   to   law-enforcement   sources,   who   are   more   than   a   little concerned.   «   Any   time   that   dirty   money   can   find   its   way   into   the   U.S.   financial   system,   it   poses   a   risk   to   us   »,   says Jerry   ROWE,   the   IRS's   chief   officer   of   narcotics   and   money   laudering.   «   It   can,   in   fact,   give   criminals   an   opportunity to   operate   in   a   legitimate   arena,   whether   it   be   in   the   political   arena   or   buying   up   businesses.   I   mean,   we   could   end up   with   those   companies   in   some   way   supporting   political   candidates   that   they   think   will   help   them   in   one   way   or an othe r ». An   investigator   from   the   State   Banking   Department   couldn't   believe   federal officials had done nothing about the money sales «   To   us,   it   was   like   a   sore on   Cindy   Crawford's   face »,   he   says.   «   I   said,   Geez isn't      someone      curious about   how   that   sore   got there ? »             Am ong    those    indicted    with IVANKOV    was    one    of    his    higt- ranking         associates.         Yakov VOLOVNIK.   VOLOVNIK   's   father- in-law,    Roman    KAPLAN,    owns the           Russian           SAMOVAR restaurant,    a    popular    Russian- mob   haunt   in   midtown   that   was also   named   in   the   FBI   davit   as   a prime     base     for     IVANKOV     's shakedowns. And   KAPLAN   -   along   with   the   owner   of   the   National   Restaurant   in   Brooklyn,   another   mob   hangout   -   is a   member   of   the   Russian   Advisory   Council,   a   mostly   honorary   committee   set   up   last   October   (1995)   by   Brooklyn district   attorney   Charles   I.   Hynes.   "The   owners   of   the   restaurants   are   decent   persons,   but   the   Russian   Mafiya   hangs out   there",   says   Alexandre   GRANT,   an   editor   of   Brooklyn's   NRS   Russian   Daily      "They   are   good   places   to   eat,   but HYNES should not be associated with them. It sends out a bad message to the Russian-American community".       HYNES   has   also   reached   out   to   the   Russian   community   for   campaign   contributions.   One   of   the   members   of   both his   finance   and   campaign-steering   committees   was   Barry   SLOTRICK,   a   flamboyant   lawyer   who   also   represents   a veritable catalogue of the local Russian mob, including IVANKOV and BALAGULA.          HYNES,   who   has   been   criticized   in   the   past   by   federal   officials   for   failing   to   take   Russian   organized   crime   in   his juridiction seriously, declined comment.       IN   BANKING,   REPUTATION   IS   EVERYTHING,   SO   when   agents   of   the   Criminal   Investigation   Bureau   of   the   New York   State   Banking   Department   learned   two   years   ago   that   Republic   National   Bank   was   selling   tens   of   billions   of dollars'   worth   of   federal   currency   to   as   many   as   50   corrupt   Russian   banks,   they   became   alarmed.   "This   posed   a question   to   us   :   If   there   are   legitimate   reasons   -   and   there   very   well   may   be   -   for   this   money   to   be   going   over   to Russia,   why   is   it   being   sent   to   entities   which   have   been   determined,   rightfully   or   wrongly,   and   I   believe   rightfully,   to be   controlled   by   organized   crime   ?"   says   a   source   close   to   the   Banking   Department's   investigation.   "It   just   didn't make   sens   to   me.   The   analogy   I   always   use   is   that   it   would   be   like   sending   money   to   [John   Totti's]   Bergen   Hunt   and Fish Club. Why are we doing that ?"       State   banking   officials   were   so   concerned   by   the   Criminal   Investigation   Bureau's   findings,   the   source   says,   that they   urged   federal   agencies   to   probe   Republic's   banknote   trade   with   Russia.   But   "right   down   the   line"   from   the   FBI to   the   CIA,   "basically,   the   response   that   we   were   getting   was,   "Yeah,   it   looks   like   we've   got   a   potential   problem here, but you know what ? It's not ous problem".          "To   us,   it   was   like   a   sore   on   Cindy   Crawford's   face   !   I   mean,   it   was   there. And   I   said,   "Geez,   isn't   someone   curious about how that sore got there?"          If   Anmerican   law   enforcement   was   slow   on   the   uptake,   the   Russians   certainly   knew   what   was   going   on.   At   the September   1994   conference,   a   Russian   general   was   asked   why   Russian   banks   were   buying   billions   of   dollars   in U.S.   currency.   According   to   a   participant   at   the   meeting,   he   chuckled,   ans   said,   "Oh,   that's   money   laudering".   Then he   went.   "Hey,   we're   being   ripped   off   in   our   country;   the   money   is   coming   over   here,   being   cleaned,   and   being brought back".          State   Department   officials   say   the   money   laundering   works   something   like   this   :   Russian   assets,   such   as   oil,   are stolen   by   underworld   figures   or   corrupt   plant   managers   and   sold   on   the   spot   market   in   Rotterdam. The   proceeds   are wired   through   front   companies   on   the   Coninent   and   deposited   in   London   banks.   Gangsters   place   an   order   for,   say, USD   40   million   in   U.S.   currency   through   a   bank   in   Moscow.   The   bank   wires   Republic,   placing   a   purchase   order   for the   cash.   Republic   buys   the   currency   from   the   New   York   Federal   Reserve.   Simultaneously,   Republic   receives   a   wire transfer   for   the   same   account   from   the   London   bank.   Republic   pockets   a   commission   and   flies   the   cash   from   New York   to   Moscow.   It   is   the   used   by   mobsters   to   buy   narcotics   or   villas,   or   run   political   campaigns.   Republic's   contacts are   with   the   corresponding   banks   in   London   and   Moscow   and   not   necessarily   the   customers   of   those   banks. As   far as   Republic   is   concerned,   if   there   is   a   problem   with   the   customer,   it's   up   to   the   bank   in   London   and   Moscow   to   warn it.   "All   that's   incumbent   upon   the American   bank   is   to   see   if   the   other   bank   is   a   duly   constituted   bank,   recognized   by the   central   bank   of   that   country",   says   the   New   York   State   Banking   Department   source.   "To   me,   looking   at   it   as someone   who   has   been   in   law   enforcement   all   my   life,   do   I   think   maybe   we   might   have   some   willful   blindness   here, or blinking, or looking the other way ? I think so. Can I prove it ? No".       In   any   case,   the   question   is   moot.   The   New   York   State   Banking   Department   has   no   jurisdiction   over   Republic because it is a federally chartered bank regulated by the Treasury's Comptroller of the Currency.          Officially,   the   Treasury   and   the   Fed   back   the   sale   of   U.S.   dollars   to   Russian   banks,   saying   that   market   forces   and geopolitics   -   and   not   the   priorities   of   law   enforcement   -   should   drive   the   trade.   A   high-level   meeting   of   Fed   and Treasury   officials   was   convened   in   Washington   last   year   (1995),   speciafically   to   discuss   the   huge   dollar   sales   by Republic   to   Russia.   Fed   officials   defended   the   trade,   saying   that   other   than   through   direct   loans,   it   was   the   best   way to   bulk   up   the   sagging   ruble   and   help   Russia   enter   the   global   free   market,   according   to   one   participant.   (Further,   the Fed   maintains   that   the   U.S.   Treasury   earns   USD   15   billion   a   year   from   dollar   sales   abroad,   the   difference   between the   4   cents   it   costs   to   print   the   hundred-dollar   note   and   the   remainder   of   the   face   value   on   the   bill   that   is   pocketed until   the   note   is   redeemed,   which   in   many   cases   will   be   never.   "It's   an   interest-free   loan   to   the   U.S."   says   Edgar Feige, a University of Wisconsin economics professor and a consultant to the Fed).          When   one   official   at   the   meeting   suggested   that   Republic   might   be   doing   business   with   banks   controlled   by organized   crime,   another   vigorously   defended   Republic,   saying   it   does   a   tremendous   amount   of   due   diligence   to make sure the Russian banks are legitimately operated.          "And   that   in   itself   is   a   bit   laugh",   says   the   participant.   "There   is   no   possible   way   for   anybody   to   conduct   due diligence on a Russian bank. There were people there from the Fed who have no common sense at all".          The   dissent   reaches   all   the   way   into   the   Comptroller   of   the   Currency's   office.   When   one   senior   official   there   was asked   about   Republic's   dollar   trade,   he   replied.   "What   I   understand   is   that   they   are   aiding   in   organized-crime activities out of the former Soviet Union through their so-called correspondent bank relationships".          Indeed,   New   York   has   learned   that   an   interagency   federal   task   force   on   economic   crime   made   a   preliminary finding   that   Republic's   dollar   trade   with   Russia   is   consistent   with   money   laudering,   according   to   the   Comptroller   of the   Currency   source   and   another   investigator   with   knowledge   of   Republic's   activities.   Drafts   of   working   papers prepared   by   task-force   analysts   stated   this   finding,   but   the   charges   were   "tempered   substantially"   in   the   final   drafts that go to senior policy-makers, says the official. New York   :   "Have   you   gotten   any   word   of   working   reports   that   have   accused   Republic   of   money   laudering   and working with Russian organized crime ?"   Comptroller of the Currency official : « Not phrased that way.. No »   New York : « How do they phrase it ? »            Controller   of   the   Currency   official   :   «   Well,   what   they   do   is,   they   indicate   that   the   volume   of   new   money   being transferred   out   of   Republic   Bank   into   Russia   is   beyond   that   which   is   needed   to   support   the   normal   use   of   U.S. dollars   in   the   former   Soviet   Union,   and   that   a   further   study   needs   to   be   made   as   to   the   actuel   use   of   those   funds.   But then   the   individuals   who   are   in   charge   of   researching   all   that   state   that   this   is,   in   fact,   used   to   support   the   black market and organized crime. But that does not appear [in] the final report that is submitted to the policy-makers ».          So   far   the   only   action   taken   regarding   mobbed-up   Russian   banks   has   come   at   the   state   level.   «   We   frankly   have had   a   number   of   expressions   of   interest   from   Russian   banking   institutions   »,   says   Robert   H.   McCORMICK,   who heads   the   foreign-commercial-banks   division   at   the   New   York   State   Banking   Department.   However,   McCormick says,   «   there   is   a   whole   potpourri   of   problems   connected   with   the   Russian   banks,   [including]   money-laudering activity   and   underworld   connections.   So   we   generally   discourage   Russian   banks   from   applying   for   branch   or   agency licenses ».          Because   of   strict   state   and   federal   licensing   standards,   only   four   Russian   banks   have   applied   for   representative office   status   in   New   York,   which   would   allow   them   to   do   P.R.   work   but   not   operate   as   banks   :   other   Russian   banks backed   off,   after-learning   they   would   have   to   submit   to   a   rigorous   investigation   by   the   state   and   the   Fed’s   Board   of Governors.   «   We   have   to   be   concerned   about   the   competence   of   the   people   running   the   bank,   their   experience, their background », says McCORMICK. « And sometimes when we check that very briefly, the news is not good ».          In   1992,   STOLICHNY   Bank,   one   of   Russia’s   five   largest   private   financial   institutions   and   major   recipient   of   cash from   Republic,   met   with   state   banking   officials   to   inquire   about   a   charter.   After   being   discouraged,   it   never   followed up   with   an   applicaton.   STOLICHNY   is   identified   in   a   classified   CIA   report   as   a   front   for   organized   crime   :   the respected   Austrian    newsweeckly    Wirtschafts    Woche    has    cited    police    records    that    alleged    Stolichny’s    owner, Alexander   SMOLENSKY,   was   an   international   drug   dealer   in   the   top   echelon   of   the   Russian   Mafiya.   Two   other allegedly   mob-linked   banks   that   buy   cash   from   Republic   –   INKOMBANK   and   PROMSTROY   –   have   submitted applications.   Promstroy’s   license   to   open   a   representative   office   was   approved   by   the   state   banking   department   in June   (1995)   but   pending   with   the   Fed.   INKOMBANK’s   April   24   (1995)   application   is   pending   at   both   agencies.   « Why   is   it   that   there   are   so   few   Russian   banks   that   operate   in   New   York   ?   »   asks   the   banking-department   source.   « The primary reason is that none of them are trusted ».          DESPITE ALL   THE   INVESTIGATIONS   and   all   the   high-level   meetings   and   international   conferences   that   seem   to involve   Republic   National   Bank   New   York,   compliance   officer   Richard   ANNICHARICO   insists   the   bank   as   never been officially accused of selling money to a mobbed-up Russian bank. « No. I never heard that », he says. « But the innuendo is there because we sell to [Russia]. But so what ?.       Asked   about   a   recent   classified   CIA   report   that   named   ten   major   Russian   banks   –   among   them   many   Republic clients   –   that   are   run   by   organized   crime,   ANNICHARICO   replied,    “We   looked   at   that,   and   we   stopped   doing business   with   some   of   those   banks   as   a   result   of   that”.   In   fact, ANNICHARICO    says,    Republic    would    completely    shut    down    the dollar   trade   if   federal   officials   ever   showed   it   hard   evidence   that   its cliens   b a n ks   in   Russia   are   corrupt.   “Believe   me,   I   wish   they   would*, hi   says.   “But   you   have   a   large   faction   of   the   U.S.   government   that thinks   it’s   great   !   You   have   some   of   the   law-enforcement   people   who are negative ont it. So you have a dual thing”.          Many   law-enforcement   officials   say   they   are   not   surprised   Republic seems    to    be    involved    in    such    a    controversial    banking    practice. “Republic    as    had    a    checkered    past”,    says    the    New    York    State Banking Department source. “They’ve been a subject of suspicion over the yea rs… People    have    sort    of    grinned    when    they    heard Republic’s    name    linked    to    mobbed-up    banks    in Russia”.  
Last January, Russian mobsters met in Puerto Rico to settle their increasingly bloody turf battles. Shortly before the meeting, a russian banker in New York was overheard on an FBI wire tap saying he was going down there « to discuss who we will kill  ». 1 2 3 9 4 6 8 Overfly the number of each step to access the legend It's a darkening afternoon the usual Assortment of passengers mills about Gate 14 at John F. Kennedy International Airport waiting to board Delta Flight 30 nonstop to Moscou. Americal businessmen prospecting the new Russian capitalism. Russian entrepreneurs returning from investor hunting, expatriates going home to visit family, tourists.  One passenger, though, is there only for the nine-hour flight, and knows something none of the other passengers knows that the plane will be carrying 1 million fresh hundred-dollar bills in its belly.
The   red,   wh i te   and   blue   boeing   76 7   i s   on   the   tarmac   when,   at   about   5   P.M.,   a   cream-colored   armored   truck   drives up.   While   Delta   workers   casually   go   about   tossing   luggage   into   the   hold,   two   armed   guards   begin   placing   large white   canvas   bags   on   a   conveyor   belt.   In   the   bags    are   stacks   of   uncirculated   new   USD   100   bills,   all   still   in   their Federal Reserve wrappers, dozens to a bag. An d th e re are dozens of bags.
4 6 5 7