12.10.08

The damage done to Russia's economy by the illegal conversion of funds into cash and by money-laundering runs into hundreds of billions of rubles. This shocking statement was made on Monday (6 October) by Justice Service Major General Igor Tsokolov, chief of the MVD (Ministry of Internal Affairs) Investigations Committee's administration dealing with organized criminal activity endangering economic security.

Of 57 cases currently in the purview of the MVD Investigations Committee, around ten relate to unlawful banking activity.

"For instance, one case we are pursuing is linked to the activity of banks in Dagestan," Igor Tsokolov told us. "Money was not even getting to Dagestan itself but was being moved abroad right away. These were sums quite comparable with the annual budget of the republic itself."

Each of these cases, the general said, involves sums of between R3 billion and R100 billion. And the law-enforcement agencies are managing to find and recover only a small proportion -- a hundred million or two, as a rule. The rest of the money has been shipped abroad by then. By whom and where is unclear.

Only a small proportion of the cases that are investigated come to court and lead to successful prosecutions of specific individuals. But one major trial is due to start in the very near future: Boris Sokalskiy, former chair of the NEP-Bank board, is under indictment for converting R62 billion into cash.

What these billions in undeclared income were to be spent on was something the Investigations Committee spokesperson was hard put to suggest.

"The money could have been going to pay illegal guest workers, or indeed to fund Chechen gangs," the major general stated.

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Source: "Izvestia"