Russia Court Rejects BoNY Motion to Dismiss Judge
By Simon Shuster
MOSCOW (Reuters) - A Russian court on Friday rejected a motion by lawyers for the Bank of New York (BK.N) to dismiss the judge in the Russian government's $22.5 billion lawsuit against the bank, lawyers for both sides said.
Russia's Federal Customs Service is seeking compensation after a rogue employee at the bank was convicted in the United States for helping launder $7 billion from Russia.
Ivan Marisin, lead attorney for the bank, said he had put forward a motion to have chief judge Lyudmila Pulova dismissed from the case.
He said he had asked for her removal on the grounds she was receiving documents and communiques from lawyers for the Federal Customs Service. Judges are not supposed to have contact with any of the parties to a case outside the courtroom.
The customs service "is unofficially communicating with the judge, which is against all norms and principles," Marisin told Reuters.
He cited a customs service document presented to the court with the judge's pencil markings already on it.
Marisin and Steven Marks, a lawyer representing the customs service, said the other two judges sitting alongside Pulova had rejected the motion.
"The procedural motions have been denied, and the next hearing is going to proceed with the merits of the case... That is where our attention is directed," said Marks, who is from the Florida-based firm Podhurst Orseck.
Marisin, however, said he would continue to seek a dismissal of the case on procedural grounds.
"We have many more procedural issues to raise. These issues deserve careful and thorough review," he said.
ANTAGONISTIC
Along with the motion to dismiss Pulova, the court on Friday also rejected two other procedural motions from the bank, including one that accused Marks of falsifying his power of attorney document.
Asked whether he feared having agitated the judge with Friday's motion, Marisin said: "She cannot possibly be any more antagonistic to us than she already is, so I'm glad that we at least voiced our concerns."
Marks said it would be more difficult to reach a settlement in the case after the accusations.
"What the bank has done is making it more difficult and far more expensive for the bank if it ever chooses to go that route, but our focus now is on obtaining the judgment," Marks said.
LAUNDERED MONEY
The star witness for the customs service in this case is Lucy Edwards, a former Bank of New York vice-president who confessed in 2000 to being part of what is thought to be the largest money-laundering operation in history.
By her own admission, Edwards helped Russian businessmen siphon $7 billion out of the country through dummy companies and Bank of New York accounts set up by her husband in the 1990s.
A U.S. court sentenced the couple to six months of house arrest, now served, and $725,000 in fines and restitutions.
The bank for its part paid a total of $38 million in penalties, and signed a deal with the U.S. Department of Justice where it admitted to failures in monitoring its staff, but was never charged with fraud or money-laundering.
The customs service claims this deal did not compensate the Russian government for losses that resulted from the illegal transfer of funds. The bank has said the case has no merit.
The sum of $22.5 billion is based on U.S. money-laundering laws, which the service has asked the Russian court to apply. The laws allow prosecutors to seek three times the total amount that was laundered.
(Editing by Will Waterman)
