The suppression of the largest financial fraud in the history of the world banking system...

A joint working group was established last week under the State Duma Security Committee. It was assigned to develop lawmaking decisions on the decriminalization of the banking system of the . Besides the State Duma deputies the representatives of the Social and Counting Chamber intend to participate in the work of the group, headed by the former Internal Affairs minister Anatoly Kulikov.

The Russian bank accounts were on the verge of complete paralysis (From the report of the Chairman of the State Bank of Russia Gerashchenko V.V. at the VII-th Congress of People’s Deputies of the Russia Federation, December, 1992)

The dynamics of the dollar rate growth in in 1992:

01.07.92 1$ = 125 rubles.

01.08.92 1$ = 161 rubles. (monthly growth was approximately  29%)

01.09.92 1$ = 205 rubles (+ 27%)

01.10.92 1$ = 254 rubles (+ 24%)

01.11.92 1$ = 398 rubles (+ 57%)

01.12.92 1$ = 447 rubles (+ 12%)

The Russian ruble was rapidly declining.

Why did it happen?

Later on the Ministry of Interior investigating organs discovered it was due to the fraud of criminal organizations which fabricated the Central Bank aviso. Criminal organizations used the most modern methods of “information wars” to steal money, the imitation of payment cash centers, in particular.

«More than 890 banks and 1547 enterprises located in 68 regions of Russia participated in the fraud. (Magazine «Ogonyok», February, 2000)

According to the estimation of the present head of the Interior ministry Rashid Nurgaliyev these frauds have not only caused damage worth trillions of rubles to the country. They became a key factor of the criminalization of the public life in . “It is no secret the criminals could take under control lots of production enterprises, companies and banks using this criminal money – stressed Rashid Nurgaliyev.

All of a sudden on December 2, 1992 the ruble stopped to decline.

02.12.92 1$ = 417 rubles (- 7% in a day!)

31.12.92 1$ = 415 rubles

What was the reason?

Answer: Payment cash centers were equipped with encryption devices. That made it possible to minimize the risk of telegraph aviso payment forgery. (From the report of the Chairman of the State Bank of Russia Gerashchenko V.V. at the VII-th Congress of People’s Deputies of the Russian Federation, December, 1992).

The end of December 1992. The ruble remained stable.

Let us return several months back. The Central Bank of signed an agreement with “ANCORT” company to develop and equip 1800 payment cash centers of the Central Bank of with a system of cryptographic aviso protection. According to that agreement “ANCORT” company manufactured and delivered 3000 encryptors in 1,5 months. Then in two months it manufactured and delivered 3000 encryptors more, developed specialized software, the system of protected telegraph aviso transfer and trained more than 5000 Central Bank specialists to manage cryptographic devices. “ANCORT” company designed cryptographic key exchange system for 1800 branches of the Central bank of . For the first time in the history of the and a single company could so quickly manufacture such a big amount of encryption equipment.

Furthermore, at the beginning, when aviso protection system started to be exploited, in order to provide secrecy “ANCORT” company produced keys for encryptors in their office under the control and protection of the staff of the Central Bank of Russia. The Central Bank heads entrusted the production of keys for their encryptors only to “ANCORT” company but to no one else in , including the Russian state organs.  And there were strong reasons for that.

The staff of the Central Bank of and ANCORT company jointly stopped the money theft from the state bank unprecedented in the world banking practice.

There are no analogues of such a practice in the world in respect to the complexity of the cryptographic task, the effectiveness, the speed of their implementation and the danger that work was connected with.

Naturally, we are not giving away anywhere the technical aspects of the protection of Central Bank of the. Our aim is to prevent such frauds in Letter from the Central Bank of the Russian Federation.