09/12/2000
Moscow Telegraph
(Copyright (c) 2000, US-Russia Press Club)

Moscow Telegraph, New York -- Confronted with allegations of massive corruption and negligence of BoNY’s senior management, asserted in the lawsuit of BoNY’s shareholders against the Bank directors, BoNY’s seniors endeavored a peculiar spin -- blaming their trouble on ARLI Director, Emanuel Zeltser.

As reported in the Wall Street Journal on September 12, 2000, the Bank of New York shareholders filed an amended complaint against BoNY’s Board of Directors in the US District Court in Manhattan stemming from Bank of New York Co.'s Russia-related business. "Shareholder lawsuit alleges that the bank's chairman personally profited from complex Russian schemes that moved money to offshore accounts -- allegations the bank denied as ‘baseless’" - the Journal reported.

The claims, contained in an amendment to a shareholder derivative action filed last year in Manhattan federal court, are the first that seek to tie Chairman Thomas A. Renyi to the bank's alleged involvement in the illicit transfer of money from Russia. It also contends that the bank's board ignored warning signs that the bank's Russian clients had been infiltrated by organized crime and failed to ensure that the bank was adequately protected. ‘Both the original suit and the amended complaint are baseless, and the bank unequivocally rejects the scurrilous claims against its executive officers and directors,’ the bank said in a statement. ‘The Bank of New York will vigorously defend itself and fully expects to prevail.’" (WSJ 09/12/00)

The Journal cited unnamed "people close to the bank" as saying that the allegations of corruption and neglect within BoNY’s highest echelon were "based almost entirely on unsupported allegations provided by Emanuel Zeltser , a director of the New York-based American Russian Law Institute and a longtime critic of Inkombank." Inkombank, BoNY’s principal Russian correspondent linked to Russian organized crimes was shut down by Russian banking regulators in October 1998 for citing "failure to comply with the Federal laws and administrative rules of the Bank of Russia, regulating conduct of banking business and to honor its financial obligations to creditors".

"I am not a novice to smear campaigns by Russian financial racketeers and their US cronies ‘close to the Bank of New York’" said Mr. Zeltser, who is one of the attorneys in another Russian laundering related action filed against BoNY in New York Federal court. "My colleagues and I have fought this disease for years both in Russia and in the United States", Zeltser said.

Indeed BoNY management has ample reasons to dislike and fear Zeltser. His court battles and evidence provided to law enforcement agencies around the globe forced Russian Central bank to revoke banking license of Inkombank, a major generator of BoNY's revenue. At the request of the Chairman of the House Committee on Banking and Financial Services, Zeltser provided insight into Russian launderers' corrupting the US financial community.Indeed BoNY management has ample reasons to dislike and fear Zeltser. His court battles and evidence provided to law enforcement agencies around the globe forced Russian Central bank to revoke banking license of Inkombank, a major generator of BoNY's revenue. At the request of the Chairman of the House Committee on Banking and Financial Services, Zeltser provided insight into Russian launderers' corrupting the US financial community. (Click here) Subsequently the Banking Committee requested that Zeltser assist in evaluating a draft of the then proposed "Foreign Money Laundering Deterrence and Anticorruption Act." (H.R. 2896) which passed Congress earlier this year.

"Defendants’ attacking opposing counsel, rather than addressing specific factual allegations is most telling", said Zeltser, "it also reflects the kind of arrogance and disregard of rules and norms of professional behavior which already have placed BONY at the heart of the largest financial scandal of all time and fosters an environment in which this type of outrageous misconduct, characterized by its chairman as a 'lapse on the part of the bank' during his Congressional testimony, is likely to continue. "