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 Pressure KleptoCapture, Ivan J. Arvelo, the Specific Agent in Charge of the New York Subject Office environment of Homeland Stability Investigations (“HSI”), and Maged Behnam, Performing Specific Agent in Cost of the Miami Subject Place of work of the Federal Bureau of Investigation (“FBI”), introduced right now the filing of a civil forfeiture criticism towards 6 serious houses positioned in New York, New York, Southampton, New York, and Fisher Island, Florida, value about $75 million.  The Criticism alleges that the homes, which are beneficially owned by Russian oligarch Viktor Vekselberg, are the proceeds of sanctions violations and have been associated in international dollars laundering in advertising of sanctions violations fully commited by, amid other individuals, Vladimir Voronchenko, a/k/a “Vladimir Vorontchenko,” who was indicted on February 7, 2023. 

U.S. Legal professional Damian Williams stated: “Today’s motion, filed on the anniversary of Russia’s entire-scale invasion of Ukraine, seeks forfeiture of six luxury houses owned by Viktor Vekselberg that his associate Vladimir Voronchenko maintained by funneling tens of millions of pounds into the United States.  With the submitting of this complaint, the United States sends a robust information to these who violate sanctions and have interaction in dollars laundering that the United States will use every offered instrument to forfeit criminal proceeds and will use that income to assist our allies in Ukraine below the recently enacted legislation.”

Director of Undertaking Power KleptoCapture Andrew C. Adams stated: “Strawmen, corrupt industry experts, and shell firms may possibly be the hallmarks of income laundering and sanctions evasion, but they are obstacles that diligent, committed investigators and prosecutors will surmount.  Today’s submitting marks still another stage that the Department of Justice and our associates at HSI and FBI have taken towards dislodging sick-gotten gains from those who would attempt to evade U.S. sanctions, and towards earning the benefit of these homes obtainable for assist to Ukraine.”

HSI Particular Agent in Demand Ivan J. Arvelo stated: “For many years, Russia’s weaponization of corruption has relied on opaque legal constructions – and Western enablers – to move, hide, and expend stolen wealth, enriching its oligarchs and in the long run resourcing the war in the Ukraine.  Given that the invasion, HSI New York and our partners have labored tirelessly to reduce Russia’s corruptocrats and their assets out of the American fiscal procedure.  Now we proceed our active steps and take away jewels from the crown of nevertheless a further oligarch, stripping him of the luxury belongings he so cherishes.”

FBI Performing Special Agent in Cost Maged Behnam said: “The mission of the interagency Undertaking Pressure KleptoCapture is to enforce sanctions, export constraints, and economic countermeasures imposed by the United States in reaction to Russia’s unprovoked military invasion of Ukraine 1 12 months back.  This civil forfeiture grievance is an example of the Endeavor Force’s ongoing do the job to satisfy this mission.  I commend the tough function, determination, and cooperation of this group of experts.”

In accordance to the allegations in the Grievance filed in Manhattan federal court docket nowadays:[1]

On April 6, 2018, the U.S. Office of the Treasury’s Office environment of International Assets Handle (“OFAC”) designated Vekselberg as a Specifically Specified Countrywide (“SDN”) in relationship with its finding that the steps of the Authorities of the Russian Federation in Ukraine constituted an unusual and extraordinary risk to the countrywide stability and overseas plan of the United States.  On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and personal plane.

Prior to his designation by OFAC, among in or about 2008 and in or about 2017, Vekselberg, as a result of a series of shell corporations, obtained six actual qualities in the United States, particularly, (i) two apartments on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two apartments 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 Criticism, the Houses were worth roughly $75 million. 

Voronchenko, Vekselberg’s close pal and business associate, retained an attorney (the “Attorney”), who practiced in New York, New York, in link with the acquisition of the Properties.  The Legal professional also managed the finances of the Houses, which includes by shelling out frequent costs, residence taxes, insurance coverage rates, and other expenses associated with the Qualities in U.S. dollar transactions from the Attorney’s desire on lawyer’s belief account (“IOLTA account”).

Prior to Vekselberg’s designation as an SDN, in between around February 2009 and March 2018, businesses owned by Vekselberg despatched about 90 wire transfers totaling about $18.5 million to the IOLTA account.  At the course of Voronchenko and his spouse and children member who lived in Russia, the Attorney utilised these resources to make many U.S. dollar payments to sustain and support the Houses. 

Promptly just after Vekselberg’s designation as an SDN, the supply of the cash utilised to maintain and service the Qualities improved.  The IOLTA Account commenced to get wires from a bank account in the Bahamas held in the name of a shell business managed by Voronchenko, Smile Holding Ltd., and from a Russian lender account held in the name of a Russian nationwide who was similar to Voronchenko.  Among approximately June 2018 and March 2022, roughly 25 wire transfers totaling close to $4 million had been despatched to the IOLTA account.  Whilst the supply of the payments improved, the administration of the payments remained the exact as before: Voronchenko and his family members member directed the Lawyer to use these cash to make various U.S. dollar payments to manage and company the Properties.  Additionally, following Vekselberg was sanctioned in 2018, Voronchenko and other folks experimented with to promote each the Park Avenue condominium and the Southampton estate.  No licenses from OFAC were utilized for or issued for any of these payments or tried transfers.  

On or about Could 13, 2022, federal agents served Voronchenko on Fisher Island with a Grand Jury subpoena, which known as for his personal appearance for testimony and his generation of documents, such as files relating to the Properties.  Approximately 9 times afterwards, on or about May perhaps 22, 2022, Voronchenko took a flight from Miami, Florida, to Dubai, United Arab Emirates, and then went to Moscow, Russia.  Voronchenko failed to seem just before the Grand Jury and has not returned to the United States.

*                *                *

The Homes issue to the forfeiture action are as follows:

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

Mr. Williams praised the remarkable operate of the New York and Miami field workplaces of HSI and the FBI.  Mr. Williams even more thanked the Department of Justice’s Countrywide Protection Division and Workplace of Global Affairs and OFAC for their support and cooperation in this investigation.

On March 2, 2022, the Legal professional Normal declared the start of Activity Power KleptoCapture, an interagency law enforcement process power focused to imposing the sweeping sanctions, export constraints, and financial countermeasures that the United States has imposed, along with allies and companions, in reaction to Russia’s unprovoked army invasion of Ukraine.  The Activity Drive will leverage all the Department’s applications and authorities towards efforts to evade or undermine the economic actions taken by the U.S. authorities in reaction to Russian armed service aggression.

This scenario is currently being managed by the Office’s Money Laundering and Transnational Felony Enterprises Device.  Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett are in cost of this motion. 

[1] As the introductory phrase signifies, the Grievance, and the description of the Criticism established forth herein, constitute only allegations, and each individual reality described ought to be addressed as an allegation.