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Russian U.N. diplomat guilty of money laundering
March 7, 2007 / 9:00 PM / in 11 years

Russian U.N. diplomat guilty of money laundering

NEW YORK (Reuters) - A Russian diplomat who once chaired a U.N. budget committee was found guilty on Wednesday of helping launder hundreds of thousands of dollars in bribes and taking a share of the money.

<p>The United Nations building in New York in a file photo. A Russian diplomat who once chaired a U.N. budget committee was found guilty on Wednesday of helping launder hundreds of thousands of dollars in bribes and taking a share of the money. REUTERS/Chip East</p>

A federal jury in Manhattan found Vladimir Kuznetsov, 49, guilty of a single count of laundering more than $300,000, said a spokeswoman for the U.S. Attorney’s Office.

Kuznetsov had helped fellow Russian Alexander Yakovlev, a U.N. staff member who handled procurement, pocket illegal payments from firms seeking U.N. contracts. Yakovlev pleaded guilty in 2005 to soliciting more than $1 million in bribes and cooperated with authorities.

Kuznetsov, arrested in September 2005, is a Russian Foreign Ministry official who served as chairman of an influential U.N. General Assembly budget committee. Kuznetsov, who will be sentenced on June 25, faces a maximum of 20 years in prison.

The charges grew out of a criminal probe into corruption in the now-defunct $64 billion humanitarian U.N. oil-for-food program for Iraq. The program was first investigated by a U.N.-established commission, headed by former Federal Reserve chairman Paul Volcker, who traced about $950,000 held by Yakovlev to companies that won U.N. contracts.

Kuznetsov was alleged to have found out about the secret payments in 2000 and arranged to receive a share in a bank account in Antigua.

The oil-for-food program was designed to soften the blow to civilians of U.N. sanctions against Iraq by allowing Baghdad to sell oil to finance purchases of humanitarian goods. The sanctions were imposed after Baghdad’s troops invaded Kuwait in 1990. It began in late 1996 and ended in 2003.

Saddam Hussein’s government raised $1.8 billion through kickbacks and surcharges on the sale of oil in the program.

But he probably earned $10 billion more from oil that he smuggled out of the country outside of the U.N. program in violation of sanctions. More than 2,300 companies have been investigated and some governments accused of paying bribes or receiving funds.

U.S. federal prosecutors have indicted 12 people in relation to the program, including oil traders. Three U.N. staffers have been indicted.

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