NewsWorldU.S. investigators find evidence Russian oligarchs trying to evade sanctions

U.S. investigators find evidence Russian oligarchs trying to evade sanctions

U.S. prosecutors have found evidence that Russian oligarchs are trying to evade sanctions put in place to pressure Moscow to stop its invasion of Ukraine, the head of a new Justice Department task force said on Friday.

Andrew Adams, a veteran prosecutor tapped to lead the “KleptoCapture” task force established last month, told Reuters in an interview that in some cases, even oligarchs who have not yet had sanctions imposed on them are trying to move assets ahead of potential future sanctions.

But even as they try to hide yachts, planes or other mobile property in countries they believe to be secretive, Adams warned that oligarchs trying to evade sanctions are facing an “all-time high” level of international cooperation to track the ill-gotten gains of Russian elites.

“There are efforts afoot – some of them publicly reported – to move, for example, moveable property in the forms of yachts, airplanes … into jurisdictions where, I think, people have the perception that it would be more difficult to investigate and more difficult to freeze,” Adams said.

The task force’s goal is to put the finances of Russian oligarchs under strain in a bid to pressure President Vladimir Putin to cease his weeks-long assault on Ukraine. Read full story

The unit’s name is a play on the word “kleptocracy,” which refers to corrupted officials who misuse power to accumulate wealth. The task force includes prosecutors, investigators and analysts from multiple federal agencies.

The United States and its allies have imposed several rounds of sanctions targeting Putin, many of his wealthy friends and dozens of Russian businesses and government agencies.

‘SHARED SENSE OF PURPOSE’

Tracing oligarchs’ assets is often difficult because they are hidden behind “layers of shell companies scattered around the globe,” Adams said.

U.S. prosecutors are receiving information from places previously thought to be safe havens, Adams said.

“Especially in the current context, and the current climate … the level of shared sense of purpose I think is at an all-time-high,” Adams said.

He declined to provide details of specific jurisdictions that have provided the task force with information, or to name specific people under investigation.

He said targeting assets located overseas was a major component of the unit’s work, adding that the United States has not been an attractive country for supporters of Putin’s government since around 2014 due to a series of sanctions over Moscow’s annexation of Crimea from Ukraine.

European countries have already found and detained the yachts of wealthy Russian businessmen.

Spain’s government temporarily seized the $140 million Superyacht Valerie, which has been linked to Sergei Chemezov, a former KGB officer who heads state conglomerate Rostec.

France last month detained a vessel belonging to Rosneft boss Igor Sechin, while Italy sequestered a yacht owned by Russian billionaire Andrew Igorevich Melnichenko.

The Justice Department said last month that information provided by U.S. law enforcement to foreign partners had contributed to multiple vessel seizures.

“The United States has not been a friendly place to be parking your money as an oligarch,” Adams said. “The most ostentatious, the most obvious sorts of assets are not in the United States.”

Adams cited a 2019 case in which U.S. authorities seized the Wise Honest, a North Korean cargo ship accused of making illicit coal shipments in violation of U.S. sanctions even though the vessel was initially located outside American waters, as a “playbook” for some of the task force’s future cases.

LONG LEGAL FIGHTS AHEAD

Adams said that criminal charges and asset seizure warrants could come in the “early days” of the unit, which was also prepared for lengthy legal battles by oligarchs seeking to prevent the United States from permanently confiscating their assets through civil forfeiture.

Those cases can allow the department to take ill-gotten property in cases where people are outside the country and cannot be extradited. Criminal forfeitures, meanwhile, can accompany an indictment against the property owner.

We should anticipate that extremely well-heeled litigants will take things to court. We will be engaged in litigation that will take awhile,” Adams said.

The task force may also target banks, cryptocurrency exchanges or other financial institutions who help sanctions violators by turning a blind eye towards suspicious transactions.

Adams said many institutions had voluntarily provided information. “The cooperation from the private sector has been already frequent.”

(Reuters)

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