A senior Bank of New York executive resigned today, saying she was unfairly suspended two months ago and "subjected to painful baseless rumor" amid allegations that several bank accounts were used to launder billions of dollars from Russia.
Natasha Gurfinkel Kagalovsky, a senior vice president who headed the bank's Eastern European division, is the third employee to suffer fallout from the year-long federal probe of suspicious transfers of $7.5 billion or more through a series of related accounts.
Although Kagalovsky was not accused by authorities or bank officials of any wrongdoing in recent weeks, she said in a statement today that she decided to resign because she felt bank officials had let her "swing in the wind."
"I find this intolerable, personally very hurtful and extremely unfair," Kagalovsky said in a statement released by her attorney, Stanley S. Arkin.
Kagalovsky's resignation came a week after a subordinate, former vice president Lucy Edwards, and two others were indicted in connection with the investigation. The federal indictment charges that the London-based Edwards, her husband, Peter Berlin, and a business associate of Berlin's conspired to illegally transmit funds and receive deposits through accounts they maintained for two companies.
Another lower-level employee, Svetlana Kudryavtsev, who was based in New York, was fired in August by bank officials who said she refused to answer questions relating to the case.
Kagalovsky has voluntarily answered questions from prosecutors, Arkin said.
Today, bank officials said little about Kagalovsky's announcement. "We acknowledge the resignation and wish her well," a Bank of New York spokesman said.
But sources have previously played down the chances that Kagalovsky had any involvement in the alleged scheme. One source familiar with Kagalovsky's career at the bank said that she was highly regarded and that bank officials had not found any sign that she had done anything wrong.
Kagalovsky is married to Konstantin Kagalovsky, who represented Russia at the International Monetary Fund from 1992 to 1995. Through Arkin, the couple has steadfastly denied any wrongdoing.
In an interview with a Russian newspaper in August, Konstantin Kagalovsky said he learned about the case by reading about it from a newspaper on the Internet.
Arkin described Natasha Kagalovsky, 44, who was on paid leave, as "an incredibly, fiercely loyal" employee who received no public support from the bank at her most difficult hour. "They basically turned their backs on her," Arkin said. "She fell victim or prey to circumstances not of her own doing."
Kagalovsky, who is Jewish, left Russia two decades ago after being treated poorly because of her religion. She received an undergraduate degree in computer programming and was graduated from Princeton in 1995 with a master's degree in Near Eastern studies, said a person familiar with her background.
In 1986, she became a management trainee at Irving Trust Co. After Irving merged with the Bank of New York, she rapidly rose through the ranks. In 1992, she was promoted to senior vice president and division head.
"Most of my adult life, I have worked for this Bank. In that time, I believe, I have [made] major contributions and I have been an entirely loyal, devoted and effective employee," she said in her statement. "Yet . . . not once during this investigation, with all the media it has had, has the bank seen fit to publicly or privately defend me and let it be known that there is not one negative thing to say about me or how I performed my job."