The DOJ unravels an intricate web in the hunt for Russian wealth belonging to Putin and influential actors




CNN

The Justice Department is quietly unraveling a complex web of shell companies and intermediaries used by Russian oligarchs and President Vladimir Putin himself, as it ramps up efforts to seize assets belonging to the wealthiest actors and most influential people in the Kremlin, the justice official responsible for leading the asset-hunting team told CNN on Thursday.

Like other Russian oligarchs on the US sanctions list, Putin is a target of the Justice Department’s corruption task force as he leads a global campaign against Kremlin insiders laundering money in response to Moscow’s invasion of Ukraine.

“I can’t tell you anything about what the United States knows about any specific individual, but he’s definitely on the list,” Andrew Adams, head of the Justice Department’s KleptoCapture task force, told CNN. in an interview. He declined to answer any further direct questions about Putin and his wealth.

On Thursday, US officials announced the seizure of a $300 million yacht belonging to a Russian oligarch close to Putin, his second yacht seizure in recent weeks. The Justice Department task force, which was launched in March to increase pressure on Putin and his closest allies in the attack on Ukraine, is taking a deep look at the extent of his powers and will target luxury real estate and enforce export laws to block Russia. access to sensitive technologies, including military technology.

“I think, above all, that beyond the very rich and very famous oligarchs, there are people who are close to the Kremlin, who are in the Kremlin, people who have a role and a voice within the industry. of Russian Defense and the Russian Ministry of Defense, which are on this list and which I consider to be particularly important from a strategic point of view,” Adams said.

Adams repeatedly dodged questions about whether the Justice Department was taking specific steps to seize assets belonging to Putin, but suggested prosecutors mapped out how the Russian president and wealthy kleptocrats try to hide their money.

“The kleptocrat’s playbook is to exploit your country to get as much money out of it as possible, and then physically get your money out of the country you’ve exploited,” he told CNN. “And to do that, you look to jurisdictions around the world. And to play it safe. You want to hedge your bets, put money across the world while you do this.

Adams explained that Russian kleptocrats have developed a complex system of front companies and middlemen to hide the money currently being sought by the United States and its allies.

“The way people operate in terms of transferring assets, when laundering assets, often includes family members that include shell companies that are shell companies within shell companies within shell companies” , did he declare.

While the Russian oligarchs have employed lawyers and law firms around the world who are willing to create these shell companies and trust structures involving a paid intermediary who is willing to come forward as the beneficial owner, Adams told CNN that Justice Department officials have been monitoring these actions for years and have developed ways to identify who the real owner is.

“It’s a typology I’ve seen for years, and I’m sure it’s the one that’s been relied on,” he said.

One of the biggest and most time-consuming challenges is the successive layers of fictitious societies.

“One of the biggest hurdles for us is breaking through the shell companies,” Adams said. “The difficulties there are amplified when you have to manage bank accounts and trustees located in jurisdictions that are scattered around the world, and often scattered around the world even for a single person.

It is difficult, Adams said, to quantify the impact that the seizures of yachts, bank accounts and other assets of people closely linked to Putin had on the war, but he attributes importance to public statements by some allies of Putin who distance themselves from the Russian president.

“Certainly getting people close to the Kremlin to take every possible step to stop this war is part of the math in terms of who’s on the list and what action we take,” Adams said. “Widely public statements again, by people who previously actively supported the Kremlin, or, or criminally silent about its actions, who have now come forward to complain about the latest efforts to inflict damage on Ukraine. It’s a bit “too little too late” in many ways. But that’s the signal I would be looking for in terms of the strength and stability of Putin’s hold on these people.

“If they say so publicly, I think that’s all we can ask them to do,” he added.

The United States and its partners have implemented a series of sanctions in response to Russia’s invasion of Ukraine, targeting key institutions and individuals who, according to Adams, believe “the Kremlin expects that they are discarded”.

“They got it wrong,” he added.

The Justice Department has worked successfully with various countries to seize high-profile assets belonging to Russian oligarchs, including super yachts that were halfway around the world.

For example, a $300 million super yacht owned by Russian oligarch Suleiman Kerimov was seized by Fijian authorities on Thursday at the request of the Justice Ministry.

That yacht will now be routed to the United States, where it will be kept in an undisclosed port until it can be auctioned off or otherwise liquidated, Adams said.

Adams declined to specify which port this super yacht or other super yachts seized by the Justice Department are taken due to security concerns, but noted that it must be a location that “can handle the risk of such a gigantic structure entering and potentially sitting there”. for several months or years.

“You can’t shoot that one in the Potomac,” he said of the yacht seized Thursday.

Once the boat arrives in the United States, there are maintenance costs, which are factored into the planning before a seizure takes place, Adams added.

While U.S. officials said the global application of sanctions against Russian oligarchs and entities was eroding support for Putin within the Kremlin, Adams made it clear on Thursday that the Justice Department was looking for other ways to clamp down on various avenues. money laundering used by Moscow. wealthiest influencers.

This includes looking to real estate investments in the United States, including properties in New York and Miami.

“All kinds of assets are on the table, for sure. And bringing up real estate is particularly relevant,” Adams told CNN. bias of large assets and stable value.Real estate is at the top of the list for this kind of survey.

“In looking at jurisdictions where you have extremely expensive real estate in stable economies, investigators are going to look for signs of money laundering.”

Several wealthy Russians are known to own properties in New York and Miami, often pouring hundreds of millions of dollars into real estate investments and hiding them under someone else’s name.

However, real estate is handled under federal forfeiture law, Adams noted.

“Generally speaking, what you won’t see is a foreclosure before a litigation is over. We can sue the house and we can start forfeiture proceedings regarding a house, but for the most part … there will be no immediate seizure and lockout, evicting people (when) you file a complaint,” he said. -he declares.

He also said there were other less obvious areas they were looking at carefully, including private stakes in asset managers and hedge funds, Russian ownership of companies and the secondary market where debt securities are negotiated.

Adams said they are getting cooperation from US financial institutions, which are required by law to report suspicious transactions.

“We are looking for intermediaries. We are looking for facilitators. We are reviewing institutions that do not meet these obligations,” he said.

Countries that have historically been havens for dirty money, he said, are cooperating with US authorities, in part because of Russia’s invasion of Ukraine.

“These seizures are, will continue, and people recognize that where seizures are happening around the world are in pockets of the world that maybe weren’t expected,” he said, adding “There is no refuge”.

As the United States tracks and traces the yachts, it also tracks the cash as the Russians move assets to other jurisdictions that were once friendly places to hide it. But, says Adams, times are changing.

“There are pockets around the world. But these pockets are rapidly shrinking,” he said.


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