In the expanding investigation of suspicious accounts at the Bank of New York, state and federal authorities are bearing down on at least three additional financial services companies that conducted business with Russians, sources said.
Investigators are exploring the ties between Sinex Corp., Sinex Bank and Sinex Securities and several companies here that allegedly moved more than $7 billion through a series of related accounts at the Bank of New York over the last three years, sources said.
All three Sinex companies were started by Russian citizens over the past six years to provide services in the United States and Russia, according to documents. But it is not clear to investigators how the companies operated, whom they actually served or whether they did anything wrong, according to sources.
Investigators believe that an important figure in the federal Bank of New York probe was a director of Sinex Bank, a little known operation that was licensed on the Pacific island of Nauru, and that maintained an account at the Commercial Bank of San Francisco.
That director, Aleksey Volkov, was one of three people indicted by a federal grand jury last month for operating an illegal money transfer business. His company, Torfinex Corp., was also indicted.
Others charged in the federal indictment were Lucy Edwards, a former Bank of New York vice president, and her husband Peter Berlin, a Russia native and now U.S. citizen, who authorities believe is the central figure in the case. Attorneys for Volkov, Berlin, Edwards and their companies have denied the allegations and said they have not done anything wrong.
The Bank of New York has not been charged with any wrongdoing and is cooperating with investigators.
Volkov and Berlin conducted business out of a modest suite of offices, using personal computers, in the Kew Gardens neighborhood of Queens, N.Y. Among the businesses operating there were Benex International, Torfinex and Sinex Bank, sources said.
Federal authorities have subpoenaed documents from the office building in Queens, as well as from Commercial Bank, sources said. The Manhattan district attorney's office also is probing whether Sinex operated as an illegal bank in the United States, sources said.
"The Sinex portion of this investigation is critically important," said one source familiar with the federal probe, adding that investigators "are not sure what they've got or where it is going."
Sinex Corp. was registered to do business in California in October 1993, documents show. At the time, Sinex Corp. described itself as a "financial service business." It was owned and operated by president Andrey Mizerov; financial director Igor Petukhov and vice president Sergey Pekhota. None could be located for comment.
The three, who all attended Chelyabinsk State University in Russia, also were officers in a Moscow-based parent company called Anis, according to company documents. After initially trying to import electronic goods, they decided to focus on the creation of a money-transfer system.
In 1994, it maintained an office in the Americom Business Center, a Western-style office complex in Moscow. It also maintained an account at Wells Fargo Bank, according to company documents. It's not clear if the company remains in business now.
"Sinex/Anis has developed a highly profitable niche offering financial services to Russian business owners," said a company document from 1994. "Their primary service involves wire transfers and advancing funds to importers of American and European goods who are seeking ease, speed, and accuracy of payment to suppliers . . . The continuing need for this service is assured by Russia's high inflation rate and antiquated banking system."
Not as much is known about Sinex Bank, which documents show shared an address with Sinex Corp. at 44 Montgomery St. in San Francisco, sources said. Sinex officials told Commercial Bank that it was licensed to do business by Nauru in July 1996, sources said.
Sinex Bank opened an account at Commercial Bank that became active in the middle of 1998, and about $1 million moved in and out of the account over a short period of time, according to Commercial Bank Chairman Robert A. Fuller Jr.
Sinex told Commercial Bank that its owners included Volkov, Andrey Mizerov and another Russian. Sinex officials said their bank had been established by Torfinex and Sinex Corp., among other companies, and would be heavily involved in the import and export of electronic goods.
Commercial Bank officials shut down the account in September or October of 1998 after Sinex officials failed to provide proof they had renewed their Nauru license, Fuller said. "We did very little business with them," Fuller said. "We asked for a license renewal and didn't get it, so we froze the account."
Federal officials are looking at other accounts at Commercial Bank. Commercial Bank filed a suspicious activity report with authorities earlier this year, before the investigation became public in August, after noticing unusual activity between one of its accounts and Benex.