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City traders convicted of £141m banking fraud

25/01/2017

Two City traders have been convicted of conspiring to defraud a Russian bank of more than £141million in a series of complex frauds.

Georgy Urumov, 37, and Vladimir Gersamia, 33, were convicted of multiple fraud offences following a four-month trial at Southwark Crown Court.

The complex nature of the fraud presented a challenge for investigators but through painstaking analysis of financial transactions, prosecutors were able to outline the individual roles played by the defendants.

The first part of the fraud was carried out in 2011. Urumov joined the Russian-owned company Otkritie Securities Ltd (OSL) and manipulated the firm into paying him approximately $25 million (£20 million) under the false impression it would be distributed to others also joining the firm. In the event, Urumov held on to the vast majority of the money.

Thereafter, Urumov committed further frauds by trading financial products called Argentinian warrants and fooling his employer into believing that they had been purchased at four times their true cost. He then pocketed the difference and transferred the gains to bank accounts out of the UK.

Urumov used Gersamia, an employee of investment management company Threadneedle Asset Management, to help cover his tracks.

By manipulating the trade in financial products in this way the men stood to gain in excess of a further $150 million (£121 million).

Money defrauded by the men was then moved between numerous accounts in countries across the world, including the Caribbean, Switzerland and eastern Europe in an effort to cover up its origins.

Alistair Dickson, Specialist Prosecutor in the CPS Specialist Fraud Division, said: "These men were successful traders, earning very generous salaries and large bonuses. But that was not enough for them.

"Motivated by greed, they went about committing a fraud involving eye-watering sums of money using a variety of sophisticated methods.

"Due to the international scale of this fraud the prosecution team considered millions of pieces of evidence and made arrangements to call witnesses from across the world in order to present a compelling case to the jury.

"The assistance of both Otkritie Securities Limited and Threadneedle Asset Management in providing evidence to the police was crucial and this complex prosecution could not have gone ahead without their support."

Urumov's wife, Yulia Balk, 36, was acquitted of one count of conspiracy to commit money laundering and one of entering into an agreement to facilitate money laundering.

Alessandro Gherzi, 37, was acquitted 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.

Urumov and Gersamia will be sentenced on Friday (January 27) at 10am.

Notes:

Charges:

  • 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.
  • Yulia Balk was acquitted of one count of conspiracy to commit money laundering and one of entering into an agreement to facilitate money laundering.
  • Alessandro Gherzi was acquitted 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.

Ends

Notes to Editors

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