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A Moscow court has sentenced the former chief executive of Vneshprombank to nine years in prison for carrying out one of Russia’s biggest ever bank frauds.

Larisa Markus admitted stealing Rbs114bn ($2bn) from the bank, leading regulators to shut it down early last year after discovering a Rbs210bn hole in its balance sheet, the largest discovered in any Russian bank in several years.

Vneshprombank’s collapse made it the largest lender to go under since Russia’s central bank began a crackdown in 2013 that has seen it close over 300 banks. Dire pleas from powerful shareholders to bail it out were reportedly rebuffed.

Ms Markus and her brother Georgy Bedzhamov, the former head of Russia’s bobsleigh federation, forged documents to siphon off loans to 286 shell companies with no intention of returning them, prosecutors said. Russia’s deposit insurance agency estimates the fraudulent loans made up as much as 23 per cent of the bank’s loan book.

Mr Bedzhamov, who co-owned the bank with Ms Markus, was arrested in Monaco in April last year, but released last summer after Prince Albert, the principality’s ruler, declined to extradite him to Russia. He has since moved to London, according to Russian media.

Copyright The Financial Times Limited 2017. All rights reserved.
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