Russian law firm Smal and Partners issued court proceedings for $22.5bn (£11.4bn) against the Bank of New York (BoNY) in relation to what has been dubbed “the case of the long-gone cash”.
Smal and Partners filed the suit in the Moscow arbitration court yesterday (17 May) on behalf of the Russian Federal Customs Service (FCS), which claims that BoNY was involved in a money laundering case more than a decade ago.
US firm Podhurst Orseck has also been advising the FCS, which revived a 2005 claim alleging that US companies colluded with Russian banks to defraud the Russian government.
The disclosure of the names of the individuals and companies that used the services of BoNY in 1996-99 may result from the suit. They include some of the most important Russian financial structures today.
Maxim Smal of Smal and Partners said the suit was connected with BoNY’s involvement in a scheme to legalise shadow imports to Russia between 1996 and 1999.
BoNY’s role in the scheme was to guarantee the payment to the suppliers of the goods in the US.
In 2006 two Russian BoNY employees, one of whom was the bank’s vice-president, were found guilty of laundering $7bn (£3.5bn).
Podhurst Orseck partner Steven Marks said the proceedings were issued against the New York bank because “none of it would have been possible without BoNY”.
Smal added: “Violations were discovered… and this is why we decided to file a claim in the court and seek damages.”
BoNY said it has not seen the lawsuit, but “based on our knowledge of the facts, we believe any such suit would be totally without merit, if not frivolous, and we would expect to defend it vigorously”.