How US prosecutors seize sanctioned Russian assets

Ever since the US imposed sanctions against Russian oligarchs last spring in response to Russia’s invasion of Ukraine, Russia’s richest have gone to great lengths around the world to hide their wealth. So have US prosecutors looking for potential sanctions evaders.

The United States has moved to seize more than $1 billion in illicit assets since the start of the war. But how does the US government seize personal property in foreign countries?

“We’ve grounded planes in Switzerland and the Middle East. We’ve arrested smugglers in Italy, Germany, Latvia. And we’ve charged money launderers in the UK. So basically what we’ve shown is there’s no place to hide “U.S. Assistant Attorney General. Lisa Monaco told 60 Minutes.

The Monaco office runs the KleptoCapture task force, a unit launched last March to impose sanctions on Russian oligarchs and find their hidden assets around the world. Monaco said the effort has been based on extensive collaboration with foreign partners.

“We need the cooperation of our international allies and partners,” Monaco said. “We need your cooperation in the investigations, and we are getting it. What we are seeing is this truly galvanized and unprecedented international community coming together to isolate the Putin regime, to condemn his incredible brutality against the Ukrainian people.”

Last year, the Justice Department seized a $300 million super yacht in Fiji that had been owned by oligarch Suleiman Kerimov. According to the Department of Justice, the vessel could be seized based on probable cause in violation of US law, including the International Emergency Economic Powers Act, money laundering, and conspiracy. The Justice Department also requested the seizure of a yacht valued at $90 million off the coast of Spain, which had been owned by oligarch Viktor Vekselberg. In that case, the alleged violations were US bank fraud, money laundering, and sanctions statutes.

Both Kerimov and Vekselberg had been individually sanctioned by the US Treasury Department.

Last month, the Senate inserted an amendment into the omnibus spending bill to use some of these confiscated Russian assets to help Ukraine in its war with Russia.

THE SHELL COMPANIES WEBSITE

While it’s relatively easy to find fixed assets like luxury yachts, jets and real estate, it’s very hard to figure out who owns them, according to Maira Martini, an analyst at Transparency International, a nonprofit that tracks money laundering around the world. world. .

“Professionals working in those sectors may be reluctant to report a client or client,” Martini said.

Also, those high-end clients rarely buy luxury items in their own name. Instead, when buying a yacht, for example, the ultra-rich often use an intricate web of shell companies. The company listed on the purchase document is usually owned by another company in another country. Those two companies, in turn, could be owned by another company in a third country. These intermediary corporations rarely mention the name of the true owner.

Trusts further complicate the ownership structure. These deals are private, and typically the deal is not required to be registered with a government authority, Martini explained.

“It’s something we can sign, put in a drawer in our office and that’s it,” Martini said. “And no one knows it exists.”

Among the ultra-luxury assets the US Department of Justice has moved to seize since the start of the war are a $60 million Gulfstream jet and a $350 million Boeing jet. The couple was registered in a network of five shell companies and an anonymous trust, all of which were linked to Russian billionaire Roman Abramovich, according to court documents.

Abramovich himself has not been sanctioned in the United States. But other US laws make seizures like these possible, including the Export Control Reform Act.

Last year, in response to Russia’s invasion of Ukraine, the US Commerce Department’s Bureau of Industry and Security issued sanctions against Russia that include bans on the export or transfer of certain US-made technology or products. The sanctions prevent those goods from being transported to Russia. Aircraft and aircraft parts made in the United States are included in the sanctions.

According to court documents, in the aftermath of the Russian invasion of the Ukraine, Abramovich’s plane flew to Russia in violation of these export control laws.

The Justice Department’s KleptoCapture unit isn’t just looking for fellow Kremlins hiding assets. It is also looking for those who are helping these oligarchs to evade sanctions. Monaco says that his unit’s work serves as a warning.

“To the banks, to [the] To the aviation industry, to the insurance companies, to everyone who has to make that asset go away, it’s a signal and a warning to them: be careful who you’re dealing with because we’re watching,” Monaco said. “And there will be consequences. if you help and incite the evasion of these sanctions”.

MAKING THE US LESS ATTRACTIVE TO HIDE DIRT MONEY

Still, the US has more work to do to prevent oligarchs from hiding their money in the US, according to Transparency International’s Martini.

“I think the United States has long been considered a very, very attractive place for those who want to remain anonymous, because it is very easy to set up a company in the United States without having to disclose information about beneficial owners,” Martini said.

Congress in 2021 passed the Corporate Transparency Act, a law that requires certain corporations and limited liability companies to report beneficial ownership information in order to do business in the United States. The law goes into effect next January.

Martini doesn’t think the law will go far enough because the new database of corporate ownership information will only be available to banks and law enforcement officials, not the public, including journalists. But he does believe it will be a start to prevent dirty money from ending up in the United States.

“We hope that this will facilitate, at the very least, the work of the authorities to implement sanctions or prosecute people involved in criminal activities,” Martini said.

The video above was produced by Brit McCandless Farmer and Will Croxton. It was edited by Will Croxton.