NICOSIA, Cyprus – Benon Sevan (search), the man at the center of the United Nations' Oil-for-Food scandal, is under even more scrutiny after a FOX News investigation raised serious questions about how, and from whom, Sevan received tens of thousands of dollars in unexplained cash payments.
Sevan was the U.N. employee who ran the Oil-for-Food (search) program, but investigators believe he illegally lined his own pockets. The allegations center on payments he received between 1999 and 2003 totaling $160,000.
Sevan told investigators from the U.N.-authorized commission headed by Paul Volcker (search) that is probing Oil-for-Food that the money came from an elderly aunt living in Sevan's native Cyprus.
His aunt, Bertouji Zeytountsian, died June 14, 2004, after falling down an elevator shaft March 24 in Cyprus, just as the investigation was getting under way. The Volcker commission's interim report, published in February, quotes Sevan as saying, "his aunt gave him cash gifts to defray the expenses of her annual stay" with him in New York.
But when FOX News traveled to Cyprus (search) recently and showed officials at the Central Bank the Volcker report, they immediately saw a series of red flags.
First, bank officials said simply moving that kind of cash out of Cyprus was illegal, beyond the limit of what any citizen could carry. A person cannot take out more than 10,000 Cyprus pounds at any time (at the current exchange rate, that equates to about $20,000 U.S., although at the time in question, it would have been closer to $15,000).
"Large movements of cash. It's a clear indication that there is a suspicious activity, unless it can be fully justified," Spyros Stavrinakis, the International Banking Supervisor at the Central Bank, told FOX.
Asked if paying for vacation expenses in New York would be a justifiable reason for taking up to $50,000 out of Cyprus, Stavrinakis replied: "Well, in my opinion it is not."
Another problem with Sevan's explanation of where he got the money emerged at the bank where his aunt held her only known accounts, the Bank of Cyprus.
Bank officials said she never had anything like the amounts of money she transported to New York. Those sums simply did not pass through her account.
So where did the $160,000 Sevan said he got from his aunt come from?
Gregory Kupelian, a lifelong friend of Sevan and his aunt and the man who keeps Sevan's books in Cyprus, told FOX the aunt could simply have saved the money from her $1,000 a month pension and kept it under her mattress.
We pointed out that even if the aunt had saved every penny of her pension, it would take her around 13 years to save $160,000. Kupelian then told us we were forgetting about the interest — something her money would not have earned had it been kept in her home.
Asked about the discrepancy, he said: "Part of it was in the bank. The bank will know."
But the Bank of Cyprus had already told us that kind of cash was never in Sevan's aunt's account.
After hearing the results of FOX News' investigation and studying the relevant sections of the Volcker report, officials at the Central Bank, which is responsible for policing all banking transactions in Cyprus, said they would begin looking into this case immediately.
And Cypriot police officials said Interpol also is considering an investigation into Sevan. They said they are waiting for Interpol's report before deciding what action should be taken locally.
Sevan did not return calls seeking comment on these latest revelations.
Sevan was suspended by U.N. Secretary-General Kofi Annan following the release of the Volcker report. The reason for the action was not over the question of the $160,000 but because the commission found that Sevan had recommended a friend's oil company to get oil contracts.
For his part, Sevan rejected the Volcker conclusion. Click here to read Sevan's statement regarding those charges.
Sen. Norm Coleman, R-Minn., has said Sevan should have his diplomatic immunity taken away so that he can face congressional investigators and be prosecuted for his alleged criminal activities. Coleman's Senate Governmental Affairs investigations subcommittee recently announced that it had acquired new Iraqi documents that estimate that Sevan made as much as $1.2 million in profits from oil deals with Saddam Hussein's government.
Sevan has been identified in Iraqi Oil Ministry documents as having participated in a scheme by Saddam to issue vouchers to people that let them profit from illicit sales of Iraqi oil.
Manhattan District Attorney Robert Morgenthau, who has been investigating financial relationships within the Oil-for-Food program, also plans to probe Sevan's activities.