Civil Forfeiture Complaint Filed Against Six Luxury Real Estate Properties Involved In Sanctions Evasion And Money Laundering | USAO-SDNY

Civil Forfeiture Complaint Filed Against Six Luxury Real Estate Properties Involved In Sanctions Evasion And Money Laundering | USAO-SDNY

Damian Williams, the United States Lawyer for the Southern District of New York, Andrew C. Adams, the Director of Activity Force KleptoCapture, Ivan J. Arvelo, the Specific Agent in Demand of the New York Discipline Place of work of Homeland Safety Investigations (“HSI”), and Maged Behnam, Performing Special Agent in Charge of the Miami Industry Workplace of the Federal Bureau of Investigation (“FBI”), announced these days the submitting of a civil forfeiture criticism from 6 serious properties situated in New York, New York, Southampton, New York, and Fisher Island, Florida, well worth close to $75 million.  The Criticism alleges that the qualities, which are beneficially owned by Russian oligarch Viktor Vekselberg, are the proceeds of sanctions violations and have been involved in global dollars laundering in advertising of sanctions violations fully commited by, amongst many others, Vladimir Voronchenko, a/k/a “Vladimir Vorontchenko,” who was indicted on February 7, 2023. 

U.S. Attorney Damian Williams said: “Today’s action, submitted on the anniversary of Russia’s full-scale invasion of Ukraine, seeks forfeiture of six luxury qualities owned by Viktor Vekselberg that his affiliate Vladimir Voronchenko managed by funneling millions of pounds into the United States.  With the submitting of this complaint, the United States sends a powerful concept to individuals who violate sanctions and engage in income laundering that the United States will use every available tool to forfeit criminal proceeds and will use that revenue to support our allies in Ukraine less than the recently enacted law.”

Director of Task Drive KleptoCapture Andrew C. Adams stated: “Strawmen, corrupt industry experts, and shell firms may be the hallmarks of money laundering and sanctions evasion, but they are obstacles that diligent, focused investigators and prosecutors will surmount.  Today’s submitting marks yet yet another phase that the Division of Justice and our companions at HSI and FBI have taken towards dislodging ill-gotten gains from people who would try to evade U.S. sanctions, and towards generating the price of these properties out there for support to Ukraine.”

HSI Exclusive Agent in Demand Ivan J. Arvelo reported: “For yrs, Russia’s weaponization of corruption has relied on opaque authorized structures – and Western enablers – to transfer, hide, and expend stolen prosperity, enriching its oligarchs and finally resourcing the war in the Ukraine.  Considering the fact that the invasion, HSI New York and our associates have worked tirelessly to cut Russia’s corruptocrats and their belongings out of the American economic system.  Currently we carry on our energetic steps and remove jewels from the crown of nevertheless a different oligarch, stripping him of the luxurious belongings he so cherishes.”

FBI Performing Exclusive Agent in Cost Maged Behnam mentioned: “The mission of the interagency Process Pressure KleptoCapture is to enforce sanctions, export constraints, and financial countermeasures imposed by the United States in response to Russia’s unprovoked military services invasion of Ukraine just one yr ago.  This civil forfeiture grievance is an example of the Undertaking Force’s ongoing work to fulfill this mission.  I commend the hard function, perseverance, and cooperation of this staff of industry experts.”

In accordance to the allegations in the Grievance submitted in Manhattan federal courtroom nowadays:[1]

On April 6, 2018, the U.S. Section of the Treasury’s Workplace of International Belongings Manage (“OFAC”) specified Vekselberg as a Specially Specified National (“SDN”) in relationship with its getting that the steps of the Governing administration of the Russian Federation in Ukraine constituted an unconventional and remarkable risk to the countrywide stability and international plan of the United States.  On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and personal airplane.

Prior to his designation by OFAC, in between in or about 2008 and in or about 2017, Vekselberg, by way of a collection of shell corporations, acquired six actual qualities in the United States, specifically, (i) two flats on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two flats on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, “the Properties” or the “Defendants-in-rem”).  As of the day of the Complaint, the Attributes ended up worth close to $75 million. 

Voronchenko, Vekselberg’s shut friend and company associate, retained an legal professional (the “Attorney”), who practiced in New York, New York, in link with the acquisition of the Houses.  The Attorney also managed the funds of the Homes, including by paying widespread rates, property taxes, insurance plan rates, and other expenses associated with the Qualities in U.S. dollar transactions from the Attorney’s fascination on lawyer’s trust account (“IOLTA account”).

Prior to Vekselberg’s designation as an SDN, amongst around February 2009 and March 2018, providers owned by Vekselberg sent close to 90 wire transfers totaling roughly $18.5 million to the IOLTA account.  At the course of Voronchenko and his family members member who lived in Russia, the Legal professional made use of these resources to make several U.S. greenback payments to sustain and service the Qualities. 

Quickly right after Vekselberg’s designation as an SDN, the supply of the cash utilized to preserve and assistance the Properties adjusted.  The IOLTA Account began to get wires from a bank account in the Bahamas held in the name of a shell organization managed by Voronchenko, Smile Keeping Ltd., and from a Russian bank account held in the title of a Russian countrywide who was linked to Voronchenko.  Among around June 2018 and March 2022, somewhere around 25 wire transfers totaling about $4 million were sent to the IOLTA account.  Though the source of the payments adjusted, the management of the payments remained the identical as just before: Voronchenko and his spouse and children member directed the Legal professional to use these funds to make a variety of U.S. greenback payments to manage and support the Properties.  Moreover, immediately after Vekselberg was sanctioned in 2018, Voronchenko and other people attempted to market each the Park Avenue apartment and the Southampton estate.  No licenses from OFAC were being utilized for or issued for any of these payments or tried transfers.  

On or about Might 13, 2022, federal brokers served Voronchenko on Fisher Island with a Grand Jury subpoena, which known as for his individual visual appearance for testimony and his manufacturing of files, like paperwork relating to the Homes.  Approximately 9 days afterwards, on or about Could 22, 2022, Voronchenko took a flight from Miami, Florida, to Dubai, United Arab Emirates, and then went to Moscow, Russia.  Voronchenko unsuccessful to look right before the Grand Jury and has not returned to the United States.

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The Houses matter to the forfeiture motion are as follows:

  • 19 Duck Pond Lane, Southampton, New York 11968
  • 515 Park Avenue, Models 21 and 2I, New York, New York 10022
  • 7002 Fisher Island Push, Unit 7002 PH2, Miami Beach, Florida 33109 and
  • 7183 Fisher Island Travel, Units 7182 and 7183, Miami Beach front, Florida 33109.

Mr. Williams praised the exceptional function of the New York and Miami field places of work of HSI and the FBI.  Mr. Williams more thanked the Section of Justice’s Nationwide Safety Division and Place of work of Global Affairs and OFAC for their guidance and cooperation in this investigation.

On March 2, 2022, the Legal professional Standard introduced the start of Job Pressure KleptoCapture, an interagency legislation enforcement task pressure focused to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, together with allies and companions, in reaction to Russia’s unprovoked army invasion of Ukraine.  The Endeavor Power will leverage all the Department’s applications and authorities from attempts to evade or undermine the financial steps taken by the U.S. authorities in reaction to Russian army aggression.

This situation is being handled by the Office’s Revenue Laundering and Transnational Criminal Enterprises Device.  Assistant U.S. Lawyers Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett are in charge of this action. 

[1] As the introductory phrase signifies, the Criticism, and the description of the Complaint set forth herein, represent only allegations, and every truth explained must be treated as an allegation.