Russian Gang Nabbed in NY for $279 Mln Insurance Fraud

MOSCOW, March 1, 2012

A group of 36 Russians was busted on Wednesday in New York for allegedly running a $279-million insurance fraud scam involving false car accident victims, corrupt doctors and lawyers, the Federal Bureau of Investigations said.

Doctors who were members of the scheme opened over 100 phony clinics across New York which provided excessive treatment to purported crash victims who were allegedly paid up to $10,000 a month "to show up once a week just to sign referrals," the FBI said in a statement.

The lawyers involved in the scam advised the phony patients on what injuries to claim in order to boost the insurance payments.

The criminal scheme exploited New York’s "no-fault" auto accident law that guarantees up to $50,000 for car accident victims.

“Today’s charges expose a colossal criminal trifecta, as the fraud’s tentacles simultaneously reached into the medical system, the legal system, and the insurance system, pulling out cash to fund the defendants’ lavish lifestyles,” Manhattan U.S. Attorney Preet Bharara said in the statement.

Bharara called the scam “the largest single no-fault automobile insurance fraud ever charged.”

If found guilty, the defendants may face jail terms ranging from between 30 and 70 years.

SOURCES : RIA Novosti

Read more

Russian Swindler Mavrodi Arrested Over Debts

MOSCOW, March 15, 2014

Sergei Mavrodi, the notorious mastermind of the MMM pyramid scheme which robbed millions of Russians in the 1990s, will spend five days in jail after a failure to pay a 1,000 ruble ($33) fine for an uncpecified administrative offense.

A Moscow magistrate court ordered the arrest on Wednesday citing Mavrodi’s refusal to pay the fine for a long time.
According to Lifenews.ru, the fraudster told the court that he could not pay the fine because he is broke.
The collapse of Mavrodi's 1990s MMM pyramid scheme cost millions of Russians their life savings. The scam attracted between two and five million investors who lost around $1.5 billion when it collapsed. He served a four-and-a-half-year sentence and was released in May 2007.
In 2008, the courts released 18 million rubles ($610,000) belonging to Mavrodi. The money was shared among some of the investors. Court authorities also appropriated Mavrodi's rights for his book Temptation that he published the same year.
In 2011, Mavrodi unveiled his new scheme, which uses the online payment system, WebMoney, to allow investors to buy tickets that work like shares, but have no real value. He promised investors returns of 20-30 percent per month.
Russia’s Finance Ministry immediately called his new project “a cynical lie,” and WebMoney promised to keep an eye on his scheme.

SOURCES : RIA Novosti

Read more

Fraud Case Opened against MMM-2011 Ponzi Scheme

7 June, 2012: A criminal case has been opened into the MMM-2011 Ponzi scheme on fraud charges, the Russian Prosecutor General’s Office said on Thursday.

The Federal Antimonopoly Service has come to the conclusion that “the MMM-2011 scheme is a financial pyramid,” the PGO said in a statement.

MMM-2011 (the three letters stand for "We Can Do a Lot" in Russia), founded by Sergei Mavrodi, uses the WebMoney online payment system to allow investors to buy tickets which work like shares, but have no real value. The project's mastermind has promised investors returns of 20-30 percent per month.

Lithuanian law enforcement agencies have halted operations of the MMM-2011 pyramid scheme after finding its activities violate laws, the local Delfi news portal reported late on Wednesday quoting law enforcement officials.

Amid rumors about the collapse of MMM-2011, Mavrodi announced last week he would create the MMM-2012.

A former mathematician, Mavrodi was released from prison in 2007 after serving a sentence for offenses relating to the collapse of the original MMM. He described the new project as a “financial social network.”

While his 1994 scheme used an aggressive TV and radio advertising campaign to attract investors, the new project relies solely on the Internet, a move which many see as a bid to attract Russia’s technologically-savvy youth.

Mavrodi’s 1994 swindle, which came to be regarded as a symbol of the lawlessness of the chaotic 1990s in Russia, was one of the largest among hundreds of other such schemes in that era. The pyramid schemes took advantage of the ignorance of a nation still learning the basics of a new capitalist system. Ponzi schemes became so commonplace that their prices were quoted on the front pages of newspapers.

According to estimates, the MMM scam attracted between two and five million investors, including a number of high-profile celebrities, who lost around $1.5 billion when it collapsed.

SOURCES: RIA Novosti

Read more

Russian Fund Bosses Convicted of $3.6 Mln Scam

VOLGOGRAD, February 6, 2012: Volgograd's court has sentenced two executives of a regional venture fund over a 110-million ruble ($3.64 million) embezzlement, RAPSI legal news agency said on Monday quoting the regional investigation committee. 

Sergei Glembo, deputy director of I-Man-Capital firm which manages the fund, was sentenced to four years in a penal colony and taken into custody in the courtroom. The company's CEO, Oleg Kachanov, was fined 750,000 rubles ($24,800).

According to investigators, the defendants withdrew the fund's money to shell companies that were under their control. The company's management also provided false information by overstating the firm's assets twice to win a bid in 2008 to control the fund.
The venture fund of the Volgograd region was founded in 2006 to support small businesses focused on high technologies. The fund's budget formed in 2009 was to consist of 140 million rubles from the federal and regional budgets and the same amount attracted by the managing company. I-Man-Capital had not started working and investigators initiated checks which elicited the violations.

SOURCES : Ria Novosti

Read more

Russian Gang Nabbed in NY for $279 Mln Insurance Fraud

Moscow 1 March, 2012 :  A group of 36 Russians was busted on Wednesday in New York for allegedly running a $279-million insurance fraud scam involving false car accident victims, corrupt doctors and lawyers, the Federal Bureau of Investigations said.
Doctors who were members of the scheme opened over 100 phony clinics across New York which provided excessive treatment to purported crash victims who were allegedly paid up to $10,000 a month "to show up once a week just to sign referrals," the FBI said in a statement.
The lawyers involved in the scam advised the phony patients on what injuries to claim in order to boost the insurance payments.
The criminal scheme exploited New York’s "no-fault" auto accident law that guarantees up to $50,000 for car accident victims.
“Today’s charges expose a colossal criminal trifecta, as the fraud’s tentacles simultaneously reached into the medical system, the legal system, and the insurance system, pulling out cash to fund the defendants’ lavish lifestyles,” Manhattan U.S. Attorney Preet Bharara said in the statement.
Bharara called the scam “the largest single no-fault automobile insurance fraud ever charged.”

If found guilty, the defendants may face jail terms ranging from between 30 and 70 years.

SOURCES : Ria Novosti

Read more

Krasnoyarsk Minister Charged in $1-Million Scam

A senior government official in the Siberian region of Krasnoyarsk has been charged with embezzling 29 million rubles ($980,000) in state funds, investigators said.
In 2009, Krasnoyarsk Region Industry and Energy Minister Denis Pashkov used fake documents to allow a privately-owned plant to receive state subsidies as it had suffered losses, the Investigative Committee said in a statement on Monday.
Instead, Pashkov and his accomplice, Pavel Lusnikov, appropriated the funds themselves.
Earlier this month, prosecutors said $84 million of state funds intended for the volatile North Caucasus had been misapproproated in 2011.
Outgoing President Dmitry Medvedev has made the fight against corruption one of the cornerstones of his four years in office, but admitted in January that he had achieved "almost no success."
"The law enforcement system is affected by corruption no less than the state officials are," Medvedev said. "We created anti-corruption laws but they failed to achieve their objectives."
Russia rated 43rd out of 182 countries in Transparency International's 2011 Corruption Perceptions Index.
Public anger over corruption has been enflamed by online activism, in particular the work of blogger Alexei Navalny, whose website Rospil exposes official fraud by monitoring suspicious state tenders.

SOURCES : RIA Novosti

Read more

Fraud Case Opened against MMM-2011 Ponzi Scheme

A criminal case has been opened into the MMM-2011 Ponzi scheme on fraud charges, the Russian Prosecutor General’s Office said on Thursday.
The Federal Antimonopoly Service has come to the conclusion that “the MMM-2011 scheme is a financial pyramid,” the PGO said in a statement.
MMM-2011 (the three letters stand for "We Can Do a Lot" in Russia), founded by Sergei Mavrodi, uses the WebMoney online payment system to allow investors to buy tickets which work like shares, but have no real value. The project's mastermind has promised investors returns of 20-30 percent per month.
Lithuanian law enforcement agencies have halted operations of the MMM-2011 pyramid scheme after finding its activities violate laws, the local Delfi news portal reported late on Wednesday quoting law enforcement officials.
Amid rumors about the collapse of MMM-2011, Mavrodi announced last week he would create the MMM-2012.
A former mathematician, Mavrodi was released from prison in 2007 after serving a sentence for offenses relating to the collapse of the original MMM. He described the new project as a “financial social network.”
While his 1994 scheme used an aggressive TV and radio advertising campaign to attract investors, the new project relies solely on the Internet, a move which many see as a bid to attract Russia’s technologically-savvy youth.
Mavrodi’s 1994 swindle, which came to be regarded as a symbol of the lawlessness of the chaotic 1990s in Russia, was one of the largest among hundreds of other such schemes in that era. The pyramid schemes took advantage of the ignorance of a nation still learning the basics of a new capitalist system. Ponzi schemes became so commonplace that their prices were quoted on the front pages of newspapers.
According to estimates, the MMM scam attracted between two and five million investors, including a number of high-profile celebrities, who lost around $1.5 billion when it collapsed.

SOURCES : RIA Novosti

Read more

Police in Russia Break Up $3Bln Money Transfer Scam

The Russian authorities are investigating the heads of several commercial banks over the illegal transfer of over 100 billion rubles ($3.3 billion) from Russia, the Interior Ministry’s deputy head of economic security Andrei Zdor said on Thursday.
“The unlawful scheme involved a chain of deals for the purchase and sale of shares from leading Russian companies (blue chips), where the sellers and the buyers were offshore companies and shell firms controlled by their organizers,” Zdor said.
The ministry has raided some organizations including Fondservisbank, where the accounts of firms handling the transit of the bulk of funds were registered, as part of their investigation.
Zdor said the law-enforcement agencies suspect Fondservisbank of breaking laws related to servicing the accounts of budget-financed organizations.
“During the search at Fondservisbank, the investigators found and seized documents testifying to a possible breach of legislation in the process of servicing the accounts of budget-dependent organizations, carrying out operations with government securities and the purchase and sale of foreign currency,” he said.
Russian Prime Minister Vladimir Putin recently criticized major state-run companies for channeling profits into offshore accounts.
Following Putin’s instructions, Russia’s Audit Chamber has launched inspections at the biggest state companies, Gazprom, Transneft, Russian Railways, Sovcomflot, VTB, Vnesheconombank, Rosatom, Sberbank and others, in search of corruption connected with offshore accounts.

SOURCES : RIA Novosti

Read more

Arrest Warrant Issued in $7.5 Mln FAPSI Fraud Case

Moscow police have issued an arrest warrant for Sergei Chupryna on charges of stealing $7.5 million from the family of the late Alexander Starovoitov, who headed the Federal Agency for Government Communications and Information (FAPSI) in 1991-1998.
Chupryna remains at large, the newspaper Izvestia previously reported. His alleged accomplice, Max Mueller, faces separate charges in Switzerland.
The Interior Ministry’s central investigative department in Moscow alleges that Chupryna defrauded Starovoitov’s parents of $7.5 million.
“Starovoitov, who died in 1999, willed the money to his parents. Their friend, 55-year-old Penza native Sergei Chupryna, misled the couple about the possibility of starting a government-supported charitable fund for children in Switzerland which would subsequently bear monthly interest,” a police spokesman told RIA Novosti.
“The suspect forged power of attorney documents and then transferred $7.5 million to the accounts of several companies controlled by him and his Swiss accomplice. Chupryna managed to deceive the victims for several years, but then the scam came to light and the couple alerted the police.”
Prosecutors in Penza filed a fraud lawsuit against Chupryna in 2004 that was later transferred for further investigation to the Interior Ministry’s investigative committee in Moscow, the spokesman said.
Switzerland issued an arrest warrant for Chupryna on June 5, 2012, he said.
FAPSI was the successor organization of the KGB responsible for signals intelligence and government communications security that was formed when the Soviet-era spy agency was broken up in 1991. FAPSI itself was dissolved in 2003 and its functions transferred to other agencies.

SOURCES : RIA Novosti

Read more

Defense Company Under Investigation Over Property Scam

Managers in a Russian Defense Ministry property management company are under investigation for alleged embezzlement of up to $100 million, by selling off properties at below market value, Investigative Committee spokesman Vladimir Markin said on Thursday.
Managers in the Defense Ministry’s property services holding company Oboronservis also used ministry funds to renovate some of the most lucrative properties, and then illegally sold them or rented them out for commercial purposes. Some of the properties were in Moscow, which has some of Europe’s most expensive real estate.
“The State design institute, comprising a building complex in downtown Moscow, was sold for 282 million rubles (nearly $9 million) less than its market value […]. Another three buildings in central Moscow, and a land plot, were sold for just over 700 million rubles (just over $22 million), at least 200 million rubles (over $6 million) below their market value,” Markin said.
"The famous Soyuz hotel and an adjacent land plot in the capital were sold for just 600 million rubles (about $19 million), or thirty percent below market value," he added.
The investigation has also uncovered instances of real estate and land plots in Russia's Krasnodar Territory being confiscated from state use, rented out, developed and sold for alleged personal gain, the spokesman said.
Five criminal cases have been opened in connection with the affair, which investigators estimate to have caused total losses of at least 3 billion rubles (almost $100 million).
Searches were underway on Thursday at Oboronservis offices and the home of one of its managers, Elena Vasileva, investigators said.
Oboronservis’ General Director Sergei Khursevich confirmed that the agency’s central office was being searched, adding “the company’s subsidiary departments are working normally and carrying out their task of supporting the forces in accordance with the law.”
He insisted it was too early to say if offences had been committed.
“To make a statement about financial improprieties regarding the activities of the holding is premature, until the investigations are complete,” he said. Oboronservis is helping investigators by providing documents to them about the company’s activities, he said.
Defense Minister Anatoly Serdyukov has been informed of the investigation and arrived at one of the locations being searched, law enforcement sources said on Thursday morning.
Serdyukov also said speculation about the case was unhelpful and premature.
“Any public declaration about the amount of damage caused or the involvement of named people in Oboronservis, until they are named by the investigation, is nothing more than one version of events,” he said.
The Defense Ministry said it was interested in “an objective investigation of the case” and “would do what it could to assist.”
Oboronservis was set up in 2008, and carries out repair and services for Defense Ministry properties as well as repair and maintenance of military equipment and provision of services to military garrison towns.

SOURCES : RIA Novosti

Read more

Con Woman Jailed Over Online Scam

MOSCOW, August 26, 2012 – A woman from Russia’s North Caucasus republic of Adygea received a four-year prison term Monday for bilking two men out of over 1.2 million rubles ($36,000), the Prosecutor General’s Office said.
The woman used a false identity and photo to register on an online dating service in May 2012, claiming to be a Moscow-based lawyer and the daughter of a rich businessman.
She also claimed she needed money for medical treatment after a car accident.
One man wired her over 500,000 rubles over the space of eight months. She then befriended the man’s friend, who subsequently sent her 680,000 rubles for her “treatment.”
SOURCES : RIA Novosti

Read more

Officers Charged in Military Food Scam

MOSCOW, November 2012 – Investigators have opened a criminal case against two officers in Russia’s far east who allegedly overstated the value of their soldiers’ food rations by more than $200,000 in order to embezzle funds, Russia’s Investigative Committee said in a press release on Tuesday.
According to investigators, Col. Sergei Ustinov and Major Ovik Babayan, both part of a military detachment in the Khabarovsk Region, approved last January the services of food company MTC, contracted by the state to provide food for military personnel.
Investigators alledge the unit’s daily nutritional needs were overstated by about $1,000. When added up, investigators added, it cost the state about $200,000.
The two officers face a possible ten-year prison sentence if convicted of abuse of authority.

SOURCES : RIA Novosti

Read more

Russian Ex-Defense Ministry Official Charged With Fraud

MOSCOW, November 23, 2013 – Russia's ex-Defense Ministry official Yevgeniya Vasilyeva has been charged with large-scale fraud and placed under house arrest, Russia’s Investigative Committee spokesman said on Friday.

The former head of the Defense Ministry’s property department and a close associate of ex-defense minister Anatoly Serdyukov, Vasilyeva has been placed under house arrest for the next two months. She faces up to six years in jail if convicted.

“According to investigators, Vasilyeva together with other suspects was involved in the theft of property belonging to Oboronservis subsidiary enterprises, which is worth over 360 million rubles ($11 million),” Vladimir Markin said.

The lawyers of Vasilyeva had asked the court to release her on a 15-million-ruble ($480,000) bail, but the court ruled that there were no reasons for the bail.

Lawyer Olga Kozyreva said the defense will appeal the court’s ruling.

In late October, the apartment of Vasilyeva was searched during an investigation into the case of selling state property below market value. Investigators seized antiques, jewelry and 3 million rubles ($96,000).

On November 1, Moscow’s Khamovniki Court sanctioned the arrest of two other suspects in the embezzlement case against managers of the defense ministry’s property services holding company Oboronservis, Maxim Zakutailo, and his wife Yekaterina Smetanova. They are suspected of a large-scale fraud and will be kept in custody until December 10.

Several criminal cases are underway in connection with the Oboronservis scandal, which became public on October 25, when investigators raided the Defense Ministry property management company's offices and the homes of its senior employees over alleged real estate scams involving nearly $100 million. Some of the properties were in Moscow, which has some of Europe’s most expensive real estate.

SOURCES :RIA Novosti

Read more

Australian Police Smash Biggest-Ever Credit Card Scam

MOSCOW, November 29, 2013 - Sixteen people including an international wrestling champion have been arrested in Australia’s biggest-ever credit card scam, officials said on Thursday.

Romania-based computer hackers gained access to 100 retail outlets in Australia, from which they stole data from 500,000 Australian credit cards, according to the police investigation.

The criminals used 30,000 of the cards for fraudulent transactions amounting to more than $30 million, the Australian Bankers' Association said on Thursday in a statement.

A Romanian court has sanctioned the arrest of seven of the 16 arrested in connection with the case. Gheorghe Ignat, a mixed martial arts and Greco-Roman Heavyweight Wrestling champion of Romania nicknamed the Carpathian Bear, was among those arrested, the Australian reported.

The Australian Federal Police (AFP) cooperated with banks and law enforcements in 13 other countries during the investigation which has been running since June 2011.

“This is the largest data breach investigation ever undertaken by Australian law enforcement,” AFP’s Manager for Cyber Crime Operations, Commander Glen McEwen was quoted as saying.

SOURCES : RIA Novosti

Read more

Moscow Police Bust $1.6 Mln Medicine Scam Aimed at Elderly

MOSCOW, February 1, 2013 – Moscow police have detained and charged four suspects from Russia and Ukraine accused of defrauding hundreds of elderly customers of tens of millions of rubles by selling them dietary supplements under the guise of costly pharmaceuticals, city police said Friday.

“According to preliminary data, at least 2,000 people fell victim” to the alleged scam, police said, adding their initial estimate of the “damage” was about 50 million rubles (just over $1.6 million).

The suspected con artists – who were charged on Thursday with fraud – placed advertisements in local media for a non-existent medical center, according to Moscow’s main police directorate. The ruse attracted mostly senior citizens.

“When speaking by phone, the fraudsters presented themselves as doctors and, using psychological tactics, convinced people they had serious illnesses. They then sold them dietary supplements at inflated prices, passing them off as expensive foreign medicines,” the police said.

When buyers realized they had been duped, the suspects contacted them again, this time posing as representatives of various government agencies and offered compensation for the purchased supplements; however, in order to get compensation, the victims were told they would have to pay processing fees.

Police said searches at the suspects’ homes yielded lists of victims, databases, and telephone handsets used for the calls and banking cards.

Police also said they had shut down two call centers based in rented apartments in Moscow, but believe elderly people in other Russian regions had also been conned by the alleged fraud.

If found guilty, the four suspects could face up to 10 years behind bars.

SOURCES :RIA Novosti

Read more

Defense Ministry Fraud Suspect Released Under Plea Bargain

MOSCOW, February 5, 2013– Yekaterina Smetanova, a suspect in a large-scale fraud at the Russian Defense Ministry, has been released from custody with travel restrictions after fully cooperating with investigation, Russia’s Investigative Committee said.

Smetanova, a former executive at Oboronservis, a property management firm controlled by the Defense Ministry, was detained on fraud charges in October last year and signed a pretrial plea bargain agreement shortly after the arrest.

"Smetanova is abiding by her commitments under the agreement by cooperating with the investigators," spokesman for the Investigative committee, Vladimir Markin, said on Monday.

“She has pleaded guilty to the crimes of which she has been accused, and provided detailed and consistent testimony exposing the other individuals involved in the crime,” he said.

Markin also said that Smetanova had been put under state protection due to “potential threats to her life and health.”

The widely-publicized Oboronservis fraud case involves illegal sale of the defense ministry’s property with the damages from these deals adding up to about 4 billion rubles ($130 million).

The investigation, involving at least a dozen separate instances of fraud, led to the sacking of Defense Minister Anatoly Serdyukov in November.

Serdyukov has been summoned as a witness for questioning by investigators twice since then, although his status could change in the course of the probe, Markin said earlier.

Three other suspects have been arrested over the case, including the head of the ministry’s economic directorate Nikolai Ryabykh, the former head of the Defense Ministry’s property department Yevgenia Vasilyeva, and Smetanova’s husband Maxim Zakutailo.

According to the Investigative Committee, the court is now processing separate criminal cases against at least ten Defense Ministry officials as a single Oboronservis fraud case.

SOURCES : RIA Novosti

Read more

Missile Forces Scam Cost Russia $3 Mln - Prosecutors

Missile Forces Scam Cost Russia $3 Mln - Prosecutors

MOSCOW, January 25, 2013  - A fraud in Russia’s Strategic Missile Forces (RVSN) has cost the state over 90 million rubles (about $3 million), the Prosecutor General’s Office (PGO) said on Friday.

The Interior Ministry said on Thursday police had uncovered embezzlement of hundreds of millions of rubles of state funds from Russia’s Strategic Missile Forces (RVSN), with high-level Defense Ministry officials and commercial executives suspected of involvement.

A series of checks and audits have been conducted across the country on 16 contracts signed between the Defense Ministry and various commercial organizations, the PGO said, adding that more than 10 million rubles has already been returned to the treasury as a result.

In 2008 the Defense Ministry allocated 500 million rubles (about $17 million) for modernization and upgrade of the RVSN's missile launch facilities.

The head of an RVSN department signed a 10-million ruble contract with the PromSpetsStroi (PSS) company for the modernization of 11 such facilities fin Siberia’s Orenburg region.

The contractor only partially fulfiled the contract and failed to meet required quality standards, but received full payment from the Defense Ministry and the RVSN department in question.

Investigators also found that a PSS director received a 1.5-million-ruble kickback from a subcontractor.

A criminal case has been opened on charges of graft, fraud and abuse of office.

The case is part of a wider probe into alleged fraud involving Defense Ministry assets worth at least $130 million at the ministry's property management firm Oboronservis. The investigation, involving at least a dozen separate instances of fraud, led to the sacking of Defense Minister Anatoly Serdyukov in November.

Three other people were arrested last year over the case, including the former head of the Defense Ministry’s property department Yevgenia Vasilyeva, and former Oboronservis executives Yekaterina Smetanova and her husband Maxim Zakutailo.

Senior Defense Ministry official Nikolai Ryabykh was also arrested in connection with the Oboronservis case on January 15, by order of Moscow's District Khamovnichesky Court, which said it feared "he could influence the investigation or flee."

SOURCES: ( RIA NOVOSTI)

Read more

Regional Governor Dismisses Meteorite Window Scam Rumors

Regional Governor Dismisses Meteorite Window Scam Rumors

CHELYABINSK, February 16, 2012  – Governor of the Chelyabinsk Region Mikhail Yurevich on Saturday dismissed rumors that locals had broken windows themselves in the hope of getting meteorite-related insurance.

“It is not true – nothing like that happened. That information is a journalistic spoof. No one broke any glass on purpose” Governor Yurevich said.

A law enforcement source told RIA Novosti on Friday that several instances had come to light of people in the Chelyabinsk Region breaking their windows with a view to claiming compensation for damage caused by the meteorite’s powerful shockwave.

Similar stories circulated widely in the Russian media after a meteorite slammed into central Russiaon Friday, injuring over 1,000 people and causing damages estimated by local officials at over 1 billion rubles (over $33 million).

On Saturday the regional emergencies ministry said that over 4,000 buildings, mostly apartment buildings, had been damaged in the incident and 200,000 square kilometers of glass was broken.
SOURCES: (RIA NOVOSTI)

Read more

Russia Lost $49 Bln in Money Transfer Scams in 2012- Banker

Russia Lost $49 Bln in Money Transfer Scams in 2012- Banker

OSCOW, February 20, 2013 – Illegal money transfers from Russia reached $49 billion in 2012 or 2.5 percent of the country’s GDP, with almost half of that sum sent out by a single group of "well-organized" people, central bank chief Sergei Ignatyev said on Wednesday.

“This could be payment for the delivery of drugs… payments for grey imports … bribes and kickbacks for officials or managers making purchases at large private companies with ineffective internal controls. Or this may involve tax evasion schemes,” Ignatyev said in an interview with Vedomosti business paper.

Ignatyev said $14 billion of that $49 billion was transferred to foreign accounts abroad in trade operations, while $35 billion involved capital operations referred to as “dubious” in the balance of payments and included in the capital outflow count.

Russia’s net capital outflow reached $56.8 billion last year - therefore indicating that up to 60 percent of money which left Russia was brought out illegally.

“I estimate the damage to the budget system from these operations at about 30 percent of the volume of dubious operations or about 450 billion rubles a year. If we add internal cash-converting operations that are organized by the same people, then I believe the overall damage to the budget system will exceed 600 billion rubles a year,” he said.

The Russian budget loses 600 billion rubles ($20 billion) annually from such money transfer scams, he said - comparable to the entire sum spent last year on education (604 billion rubles) or health care (614 billion rubles), according to Vedomosti.

Shell companies play the most significant role in these dubious operations, Ignatyev said, adding there were 3.9 million businesses registered by Russia’s Federal Tax Service compared with just 2 million organizations that really existed.

“Also, our analysis shows that more than half of all dubious operations are held by firms directly or indirectly bound by payment relations with each other. The impression is created that all of them are controlled by one well-organized group of people. If the law-enforcement agencies concentrate their efforts considerably, they will be able to identify these people and also the beneficiaries of these operations,” Ignatyev said.

Under the central bank’s methodology based on international standards, dubious operations involve export revenues that were not received on time, the cost of goods and services prepaid but not received under import contracts, and money transfers abroad under fictitious operations with securities and loans.

Ignatyev said Russia urgently needed to adopt a law developed by the Federal Financial Monitoring Service allowing banks to unilaterally cancel relations with clients making dubious transactions, streamline the business registration procedure and introduce liability for nominal directors.

The volume of dubious operations has stayed steady at 2 percent of Russia’s GDP in the past four years, the central bank estimates.

 SOURCES : (RIA NOVOSTI)

Read more

Over 24,000 Workers Involved in Urals Meteor Blast Cleanup

Over 24,000 Workers Involved in Urals Meteor Blast Cleanup

YEKATERINBURG, February 17, 2013 – Over 24,000 workers and 4,300 pieces of equipment are involved in the effort to clear up the damage caused by a meteor that shook Russia’s Urals Region, the regional Emergencies Center reported on Sunday.

A flaming meteorite streaked across the sky and slammed into central Russia on Friday with a massive boom that blew out windows and damaged thousands of buildings around the Urals city of Chelyabinsk, injuring more than 1,000 people in the area.

As of 06:00 a.m. on Sunday, work has been done to replace window glass in 1,658 residential buildings, 34 health care organizations, 62 educational establishments and four social facilities. Window frames and glass have been restored on an area of 37,800 square meters. A total of 122 potential hazardous facilities have been inspected,” the Emergencies Center said.

The meteor blast, a rare and spectacular phenomenon, sparked confusion and panic among residents of the region and was captured by numerous witnesses on video that quickly spread to television and computer screens around the world.

Police and other officials said around 1,200 people had been hurt, including more than 200 children, mostly in the Chelyabinsk Region near the Ural Mountains. By the end of Friday, the number hospitalized was 50, according to the Emergencies Ministry. Earlier, at least two people were reported to be in "grave" condition.

The majority of those hurt had suffered cuts from broken glass, but the region's governor said two-thirds of the injuries were very light.

The blast was so powerful that it was detected by 11 of the 45 infrasound stations of the Comprehensive Nuclear Test Ban Treaty Organization (CTBTO)’s network designed to track atomic blasts across the planet.

"It was like a train falling down from the sky," a Chelyabinsk resident told RIA Novosti, adding that most people at first thought that a warplane had exploded above the city.

SOURCES: (RIA Novosti)

Read more