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 Attorney for the Southern District of New York, Andrew C. Adams, the Director of Job Power KleptoCapture, Ivan J. Arvelo, the Particular Agent in Demand of the New York Industry Office environment of Homeland Security Investigations (“HSI”), and Maged Behnam, Performing Distinctive Agent in Charge of the Miami Industry Business of the Federal Bureau of Investigation (“FBI”), declared today the submitting of a civil forfeiture complaint in opposition to six authentic properties positioned in New York, New York, Southampton, New York, and Fisher Island, Florida, well worth around $75 million.  The Criticism alleges that the attributes, which are beneficially owned by Russian oligarch Viktor Vekselberg, are the proceeds of sanctions violations and were being concerned in international money laundering in marketing of sanctions violations committed by, between other individuals, Vladimir Voronchenko, a/k/a “Vladimir Vorontchenko,” who was indicted on February 7, 2023. 

U.S. Lawyer Damian Williams said: “Today’s motion, submitted on the anniversary of Russia’s whole-scale invasion of Ukraine, seeks forfeiture of six luxurious attributes owned by Viktor Vekselberg that his affiliate Vladimir Voronchenko maintained by funneling millions of dollars into the United States.  With the submitting of this complaint, the United States sends a solid concept to people who violate sanctions and engage in revenue laundering that the United States will use just about every readily available instrument to forfeit legal proceeds and will use that money to enable our allies in Ukraine underneath the freshly enacted law.”

Director of Endeavor Force KleptoCapture Andrew C. Adams said: “Strawmen, corrupt professionals, and shell firms may perhaps be the hallmarks of dollars laundering and sanctions evasion, but they are road blocks that diligent, focused investigators and prosecutors will surmount.  Today’s filing marks nevertheless a further action that the Division of Justice and our companions at HSI and FBI have taken towards dislodging unwell-gotten gains from all those who would endeavor to evade U.S. sanctions, and toward building the worth of these attributes out there for help to Ukraine.”

HSI Special Agent in Demand Ivan J. Arvelo claimed: “For decades, Russia’s weaponization of corruption has relied on opaque legal structures – and Western enablers – to transfer, hide, and spend stolen wealth, enriching its oligarchs and in the end resourcing the war in the Ukraine.  Due to the fact the invasion, HSI New York and our associates have labored tirelessly to lower Russia’s corruptocrats and their property out of the American fiscal system.  Nowadays we go on our active steps and clear away jewels from the crown of still a different oligarch, stripping him of the luxurious assets he so cherishes.”

FBI Acting Special Agent in Cost Maged Behnam reported: “The mission of the interagency Endeavor Power KleptoCapture is to enforce sanctions, export restrictions, and financial countermeasures imposed by the United States in response to Russia’s unprovoked armed service invasion of Ukraine one calendar year back.  This civil forfeiture complaint is an illustration of the Task Force’s ongoing work to satisfy this mission.  I commend the hard get the job done, determination, and cooperation of this team of pros.”

According to the allegations in the Criticism submitted in Manhattan federal court currently:[1]

On April 6, 2018, the U.S. Office of the Treasury’s Office of International Assets Command (“OFAC”) selected Vekselberg as a Specifically Specified Countrywide (“SDN”) in relationship with its finding that the actions of the Govt of the Russian Federation in Ukraine constituted an uncommon and extraordinary menace to the countrywide security and foreign 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, amongst in or about 2008 and in or about 2017, Vekselberg, as a result of a series of shell organizations, acquired six serious houses in the United States, precisely, (i) two apartments on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two residences 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 date of the Complaint, the Qualities were really worth roughly $75 million. 

Voronchenko, Vekselberg’s near pal and small business associate, retained an legal professional (the “Attorney”), who practiced in New York, New York, in relationship with the acquisition of the Properties.  The Legal professional also managed the finances of the Properties, including by spending common prices, property taxes, coverage rates, and other costs involved with the Houses in U.S. greenback transactions from the Attorney’s interest on lawyer’s trust account (“IOLTA account”).

Prior to Vekselberg’s designation as an SDN, among roughly February 2009 and March 2018, businesses owned by Vekselberg sent roughly 90 wire transfers totaling somewhere around $18.5 million to the IOLTA account.  At the way of Voronchenko and his relatives member who lived in Russia, the Attorney utilised these resources to make numerous U.S. greenback payments to manage and support the Properties. 

Straight away following Vekselberg’s designation as an SDN, the supply of the funds utilised to maintain and support the Qualities transformed.  The IOLTA Account commenced to obtain wires from a financial institution account in the Bahamas held in the identify of a shell company controlled by Voronchenko, Smile Keeping Ltd., and from a Russian lender account held in the name of a Russian countrywide who was linked to Voronchenko.  Between close to June 2018 and March 2022, roughly 25 wire transfers totaling roughly $4 million had been despatched to the IOLTA account.  Despite the fact that the resource of the payments modified, the administration of the payments remained the similar as in advance of: Voronchenko and his family member directed the Legal professional to use these money to make many U.S. dollar payments to sustain and assistance the Homes.  Also, right after Vekselberg was sanctioned in 2018, Voronchenko and other individuals experimented with to market both of those the Park Avenue condominium and the Southampton estate.  No licenses from OFAC have been applied for or issued for any of these payments or attempted transfers.  

On or about May perhaps 13, 2022, federal agents served Voronchenko on Fisher Island with a Grand Jury subpoena, which referred to as for his personal visual appearance for testimony and his output of documents, which include files relating to the Homes.  Somewhere around 9 days afterwards, on or about May well 22, 2022, Voronchenko took a flight from Miami, Florida, to Dubai, United Arab Emirates, and then went to Moscow, Russia.  Voronchenko unsuccessful to surface prior to the Grand Jury and has not returned to the United States.

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The Attributes subject to the forfeiture motion 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 Drive, Unit 7002 PH2, Miami Beach, Florida 33109 and
  • 7183 Fisher Island Drive, Models 7182 and 7183, Miami Beach front, Florida 33109.

Mr. Williams praised the superb operate of the New York and Miami discipline offices of HSI and the FBI.  Mr. Williams more thanked the Section of Justice’s National Safety Division and Place of work of Worldwide Affairs and OFAC for their assistance and cooperation in this investigation.

On March 2, 2022, the Lawyer General introduced the launch of Process Power KleptoCapture, an interagency legislation enforcement undertaking power dedicated to enforcing the sweeping sanctions, export constraints, and economic countermeasures that the United States has imposed, along with allies and associates, in reaction to Russia’s unprovoked armed forces invasion of Ukraine.  The Process Drive will leverage all the Department’s tools and authorities versus initiatives to evade or undermine the economic actions taken by the U.S. govt in reaction to Russian armed forces aggression.

This situation is currently being taken care of by the Office’s Cash Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett are in charge of this motion. 

[1] As the introductory phrase signifies, the Grievance, and the description of the Criticism set forth herein, constitute only allegations, and each individual truth described should really be addressed as an allegation.