MOSCOW, January 19 (RIA Novosti) - A Russian banker, accused of ordering the killing of a senior Central Bank license regulator, said he was being punished for refusing to participate in the money laundering operations of Russia's main bank, a leading business daily said Friday.
Alexei Frenkel, who has been charged with organizing the murder of Central Bank Deputy Chairman Andrei Kozlov September 13, said in a letter he wrote a month before his arrest January 11 that he planned to expose a scheme which helped the Central Bank launder money through banks whose licenses it was going to revoke, Kommersant said.
Frenkel, former chairman of the board in the VIP-bank, said his bank's license had been canceled three months before Kozlov's murder because it had refused to cash money for Central Bank officials. The letter, however, did not cite the names of those allegedly involved in the scheme, the paper said.
The banker also said the Central Bank had denied entry into the deposit insurance system, which allows banks to work with individual accounts, to banks with impeccable financial reports.
"Facts confirm that the Central Bank made full use of the selective principle when including banks into the deposit insurance system," Frenkel wrote in his letter carried by Kommersant, and added that the law on money laundering had been designed specifically for the purpose.
"The Central Bank does not care about economic crimes or the funding of terrorism," he said. "A simple formula has been invented. It is enough to find two delayed reports to the financial monitoring service a year, which happens with at least 95% of banks, and there you go - repeat violations of law 115."
The Russian Prosecutor General's Office reacted immediately to the letter, saying it was a defensive move.
"Custody may have this effect on people and their thoughts, they start writing letters and appeals. Why didn't he say this before?" First Deputy Prosecutor General Alexander Buksman said.
Bank experts said they were skeptical about Frenkel's allegations.
"No names are mentioned in the letter, and unsubstantiated and unspecified allegations cannot be taken seriously," said Anatoly Aksakov, president of the Russian Association of Regional Banks and deputy chief of the bank committee in the lower house of parliament.
Igor Yurgens, vice president of the Russian Union of Industrialists and Entrepreneurs and chairman of the board of directors at Renaissance Capital, echoed Aksakov, saying there could be nothing further from truth.
"Quite the contrary, Kozlov was instructed to fight banks that engage in money laundering, and he did his job rigorously," Yurgens said.
The banker added that tough national and international regulations made money laundering for state and large private banks unattractive, while small banks with an insignificant client base were the ones more likely to be interested in semi-legal operations.
"Such statements are more of a faux pas by Frenkel's lawyers than a clever PR move," Yurgens said.
Pavel Medvedev, deputy chairman of the Duma's banking committee, said Frenkel's letter offered no evidence.
"It is an unsubstantiated statement that offers no proof," he said, adding that Frenkel had addressed him six months ago asking him to amend banking legislation.
"He wanted [financial] monitoring laws to be fully formalized, but I explained to him that was impossible," Medvedev said.
Financial control, the parliamentarian said, is not only an assessment of formal figures reported by banks, but also includes the professional judgments of auditors, and that cannot be formalized, he said.
