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Fed, Bank NY in accord
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February 8, 2000: 4:43 p.m. ET
Bank to provide information in wake of Russian money laundering charges
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NEW YORK (CNNfn) - The Bank of New York Tuesday agreed to provide more information to both the Federal Reserve and the New York State Banking Department about activity in its clients' accounts in the wake of highly publicized allegations involving money laundering and Russia.
In an eight-page filing released by the Fed's Board of Governors, the Bank of New York agreed to report on a quarterly basis to the Fed Bank of New York and state regulators about financial transactions it has identified as potential money-laundering moves -- a series of steps it had already undertaken voluntarily and in some cases has already completed.
The agreement comes in the wake of allegations that suspected Russian criminals funneled billions of dollars in illicit funds through the Bank of New York with the aid of several high-placed executives who have been charged by the Justice Department. The Bank of New York has never been accused of any wrongdoing and has cooperated with state and federal investigators.
"With this agreement we re-affirm our commitment to meet the highest operating and ethical standards in everything we do," Bank of New York Chairman Thomas Renyi said in a statement. "This agreement confirms our common goal with the Federal Reserve Bank and the New York State Banking Department to continue the enhancements and improvements that we have undertaken."
Within the agreement, Bank of New York has 45 days to submit "an acceptable enhanced customer due-diligence program" to ensure that any criminal activity in its accounts is spotted and reported to authorities as quickly as possible. The bank is also required to provide a list of accounts that do not need monitoring.
A twisted tale
For months, authorities in the U.S., Russia and other European countries have been investigating whether as much as $7 billion was laundered through the Bank of New York (BK: Research, Estimates). At one point it was alleged that some of the money siphoned through the Bank of New York's coffers came from funds provided to Russia by the International Monetary Fund.
For his part, Bank of New York's Renyi told a congressional panel last September that his bank failed to fully investigate suspicious activity in bank accounts that may have been linked to Russian crime figures.
The bank at first suspended, then fired two of its top-level executives: Svetlana Kudryavtsev, an international banking associate in the Bank of New York's Eastern European division, and Lucy Edwards, a vice president in the same division. They, along with Edwards' husband Peter Berlin and Aleksey Volkov, another associate, were formally charged in September.
Since discovering the suspicious activity, Bank of New York has intensified its scrutiny of its accounts, forming an Anti-Money Laundering Committee that reviews suspicious accounts and reports to the bank's board. The committee is also required to provide updates to the Fed and state regulators.
Money laundering typically involves taking large cash deposits from individuals or businesses when the money is either suspected or known to have been obtained from illegal activities or for illicit purposes. The Bank Secrecy Act requires all U.S. banks to report cash deposits of $10,000 or more, as does the Money Laundering Act of 1986.
Bank of New York shares rose 1 Tuesday to 39-1/4. 
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