Russian investigators have traced $500 million of money laundered through the Bank of New York to one of the country's leading banks, which is now insolvent.

According to Russian intelligence sources, $500m of the assets of Menatep bank passed through Bank of New York accounts belonging to offshore companies connected to Russia's mafia godfather, Semion Mogilevich.

Menatep, Russia's sixth- biggest bank before the country's financial collapse last year, has been linked by US authorities with organised crime. However, it has so far denied any involvement in the Bank of New York affair, in which more than $10 billion has been laundered worldwide.

Natasha Kagalovsky, the senior Bank of New York executive suspended over the affair, is the wife of Menatep's former deputy chairman Konstantin Kagalovsky. Both have denied wrongdoing.

Menatep, which recently lost its banking licence, is one of a number of Russian banks which have been investigated by the country's Federal Security Service, Interior Ministry and tax police, as well as the FBI and international banking regulators.

Since the scandal broke last month, senior politicians and members of Russia's élite have been accused of raping the country hand-in-glove with overseas networks run by the Russian mafia.

Last week the country's former chief prosecutor alleged that much of a $4.8bn loan by the International Monetary Fund last summer may have been misused and spirited offshore by a clique of 18 banks.

'This is not capital flight,' one senior US investigator said last week. 'This is theft. But if Russia's élite grants itself the right to pillage, what can be done?'

Menatep is part of the financial-industrial empire run by Mikhail Khodorkovsky, who, in the growing political fall-out, has blamed Russian officials for misusing western aid.

One of Russia's powerful business oligarchs, Khodorkovsky also heads Yukos, the country's second-largest oil company. Last year Kagalovsky - Russia's former IMF chief - became deputy chairman of Yukos.

According to Russian intelligence sources, Menatep has been the main transactor of foreign exchange business for the domestic Neopolis bank. Neopolis is understood to be the main clearing bank used by businesses run by Moscow's powerful Solntsdevo gang, which is headed by the leading criminal godfather, Sergei Mikhailov, a close associate of Mogilevich.