Transnational crime: The case of Russian organized crime and the role of international cooperation in law enforcement

The difficulties in securing cooperation with Russia and other post-Soviet governments in cases involving high-level corruption, bank fraud, and money laundering have made many American prosecutors reluctant to take on such cases. Although crimes such as the ones in the Bank of New York and Golden Ada cases cannot remain uninvestigated, American prosecutors, if given discretion, may choose not to invest their energies in cases linked with the former Soviet Union. The oscillations in cooperation often lead to unsuccessful outcomes.

Problems in Asset Forfeiture

The problem of asset forfeiture and return of assets is a very difficult one that presently affects Russian-American bilateral relations. Billions in Russian assets, many of them obtained by illegitimate means, have flowed into the United States since the collapse of the Soviet Union. The Bank of New York case is only the most visible, but half a billion dollars are left in the Golden Ada and billions more in many other cases. Since the Bank of New York case broke, there is much concern at high policy levels that the vast sums of money flowing in from the former Soviet Union, much of it probably of illicit origin, has the possibility of undermining our banking system. 44 Conversely, on the Russian side there is great concern that little of the looted assets has been returned. Moreover, much political capital is being made from these cases in the West, with little tangible benefit for Russia.

American officials have been successful in repatriating money in only a few cases, and the amount totals only several million dollars. In one case Americans sold Russian businessmen a brick plant that they had no intention of constructing. Based on Russian complaints, an American investigation was launched. Assets forfeited from the Americans after conviction allowed repatriation of funds to Russia.

Significant assets are available for repatriation from the Golden Ada case because FBI, Customs, and IRS agents seized many of Golden Ada's assets just as they were to be shipped out of the country. Other assets cannot be repatriated because under American law commodities that are purchased in good faith are not subject to forfeiture. This affects the sale of many gold coins in the Golden Ada case. Therefore, of the $500 million involved in the case, approximately $40 million is available for return to Russia. But because of the political delicacy of the case and the Russians' failure to produce needed documentation, the assets have not yet been returned.

Russian law enforcement do not understand the complex laws protecting property in the United States and Western Europe. Many Russians believe that it should be possible to simply provide American law enforcement with the bank accounts of Russians they are investigating and have the money seized and repatriated. However, very complex court procedures govern the seizure and repatriation of funds to ensure that citizens are not unjustifiably deprived of their property.