Crime & Punishment American Style?

The Russian Customs Service has sued the Bank of New York Mellon (BoNY) in a Russian court for its part in the illegal wire transfers of nearly $7.5 Billion out of Russia in the 1990’s. Russian Customs seeks three times the “loss of revenue”, OVER $22 BILLION AS A FINE. As a Customs lawyer for over 20 years, this case doesn’t seem that unusual or even draconian. Sure, the numbers are staggering, but the money that was siphoned out of Russia, at the very moment that their economy was collapsing, was staggering, both in quantity and potential harm to the country.

But, there’s a twist. The law BoNY (founded in 1784 by Alexander Hamilton, one of the foremost American founding fathers) allegedly violated isn’t Russian; it’s the American RICO statute, which was originally intended to catch criminal organizations like the Mob and drug cartels with civil monetary penalties. In fact the Russians seem to know so little about RICO and how its supposed to work, they’ve retained an American lawyer to represent them, who not at all coincidentally has taken the case on an almost uniquely American arrangement, contingency (meaning he doesn’t get paid unless Russian Customs collects). Naturally, BoNY’s defense team is all American too, including a former US Attorney General (and Governor of Pennsylvania) Dick Thornburgh.

The very-high stakes question the Russian judge must answer is the one I and many others of us have: what place, if any, an American law against an American defendant for a crime that took place outside the country has in Russia? What makes this case particularly troublesome is that, to be quite frank, Russia does not have much of a reputation or history as a rule of law country. So, the odds of BoNY getting a fair shake would seem mighty slim. And, what is most offensive to me is my sickening hunch that the Russians’ American lawyer is betting heavy on Russia living up to its reputation.

But, if I read the most recent article in the New York Times right http://www.nytimes.com/2008/07/04/business/worldbusiness/04bony.html?pagewanted=all), his bet may turn out just as well as the bets on Big Brown at Belmont. I think the Russian judge is struggling mightily to do the right thing. That’s why she sent Governor Thornburgh home without letting him testify in person before her and is considering the opinions of both sides’ experts on affidavits. I’ve had my own extremely personal experience with a Russian judge in a Russian court (the adoption of my son). That experience and the developments in BoNY’s case give me some hope that justice will be done.

But, will that American lawyer get the justice he deserves? If only he could be penalized in an American court for violations of foreign laws that make it illegal to be unpatriotic or disloyal to your own country. An ending I’m sure Dostoyevsky would think poetically just.
See also, the Wall Street Journal Law Blog article: http://blogs.wsj.com/law/2008/06/04/will-the-russians-go-for-rico-moscow-goes-after-bank-of-new-york/