Two Russian Traders Jailed over $140m Fraud Case in London

Former Otkritie Financial Corp. banker George Urumov, and a former trader at Threadneedle Asset Management Ltd. were jailed today in London after being found guilty over a fraud case involving the Russian lender. The two London traders stole more than $140 million from their employers, a court has said.

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Georgy Urumov, 37, was part of a group that defrauded Russian owned banking group Otkritie. He was found guilty of five charges including one of conspiracy to defraud an Otkritie subsidiary after deceiving their bosses about their prior long-standing friendships. His fellow trader Vladimir Gersamia,33, who worked at Threadneedle Asset Management, was also accused of being involved in the scam.

Urumov was sentenced to a total of 12 years in prison and Gersamia for 7 years after a four-month trial at Southwark Crown Court.

The trial heard that when Urumov joined Otkritie Securities Ltd, he manipulated the bank into paying him more than $25 million under the false impression it would be distributed to others joining his new team at the bank. However, Urumov kept most of the money.

More specifically, Urumov and Gersamia worked with other colleagues on a scheme to convince Otkritie management that a class of Argentine bonds were worth four times their real value, so they could buy 1.65 billion of the assets and pocket the difference, the Crown Prosecution Service (CPS) said.

Urumov then negotiated a $25 million signing-on bonus from Otkritie, or $5 million for each member of his team, according to the prosecution. However, he gave his team members only a fraction of that amount and instead doled out $6 million each to himself through a complex web of offshore accounts.

Mr Alexey Karakhan, chairman of the board at Otkritie Holding, said in a statement: “We are more than satisfied with the jury’s verdict and the strong message sent by the lengthy prison term given to Urumov.”