Harsh fraud sentencing trend continues – a clear message of deterrence
Louise Bennett, 17 February 2017
Two City traders convicted over £141m banking fraud, LNB News 26/01/2017 150. [Subscription]
Two City traders have been convicted of conspiring to defraud a Russian bank of more than £141m in a series of complex frauds. Georgy Urumov was convicted of two counts of conspiracy to defraud, two counts of conspiracy to commit fraud by false representation and one count of conspiracy to commit money laundering. Vladimir Gersamia was convicted of two counts of conspiracy to defraud and one count of conspiracy to commit money laundering. The pair will be sentenced on 27 January 2017.
What was the background to this criminal investigation and conviction?
The first part of the criminal investigation related to a fraud committed in 2011. George Urumov joined the Russian-owned company Otkritie Securities Ltd (Otkritie) and manipulated the firm into paying him a ‘sign-on’ fee of approximately £20m. Urumov falsely misled Otkritie into believing that the fee would be distributed to others also joining the firm. However, Urumov kept the bulk of the money for himself.
The second part involved Urumov committing further frauds by trading financial products called Argentinian warrants. He misled his employer into paying over four times the true value of the warrants and he pocketed the difference. He subsequently transferred his proceeds to bank accounts outside the UK.
