DOJ Announces First Targets of Task Force KleptoCapture, Elite Anti-Money Laundering Initiative Created to Stop Russian Oligarchs and Their Co-Conspirators in the International ‘Invisible Economy’ | Cranfill Sumner LLP

[co-author: Christian Smith-Bishop – clerk]

At the end of May, a court in Fiji, a Pacific island state, upheld on appeal[1] the detention of the 348 feet Amedee, which is believed to be owned by Russian oligarch Suleiman Kerimov, whose wealth comes largely from his 76% stake in Russia’s largest gold producer, Polyus. The US Treasury sanctioned Kerimov in 2018 for alleged money laundering related to the purchase of French villas. The EU sanctioned it earlier this year, and the Fijian seizure came at the recent request of US authorities operating under the DOJ’s new KleptoCapture Task Force, a calibrated law enforcement initiative announced by the Attorney General. Merrick Garland in March 2022 in an effort to curb Vladimir Putin’s warmongering ground invasion of Ukraine and Eastern Europe.

This high seas legal drama orchestrated far beyond the enclaves of a US federal court underscores both the global reach of kleptocratic money laundering and the challenges facing the KleptoCapture task force. Operated by the Office of the Deputy Attorney General and led by former New York Federal Attorney Andrew Adams,[2] Task Force KleptoCapture has already successfully projected the force of US law against wealthy and influential people like Kerimov, who otherwise avoid US sanctions by staying abroad. Formed specifically to target sanctions evasion, Task Force KleptoCapture’s distinctive makeup and mission is tailor-made to exert pressure on those who actively or through their “criminal”.[] quiet[ce]” allow war in Ukraine.[3] Distinct from the existing U.S. Department of Justice Money Laundering and Asset Recovery (“MLARS”) section, KleptoCapture’s narrower focus on sanctions evasion falls outside of MLARS and is likely to promote greater agility and short-term results, including the erosion of material and moral support. for Putin’s aggression.[4]

International victory for Task Force KleptoCapture in the Amedee case foreshadows the future landscape of litigation. A key question was whether Kerimov actually possessed the Amedee. As Forbes reports, the vessel’s registered owner is an Isle of Man-based company whose registered owner is actually Eduard Khudainatov, the former CEO of Russian oil giant Rosneft. Khudainatov is a close ally of Igor Sechin, an ally of Putin’s secretary in St. Petersburg in the early 1990s. Khudainatov is also linked to the 460ft Scherazade– one of the world’s largest private yachts worth an estimated $700 million – which is under investigation by Italian authorities. Ultimately, the US government’s assertion, as expressed in its mandate[5]- that it was extremely unlikely that Khudainatov had the resources to own and maintain “more than a billion dollars worth of luxury yachts”, convinced the Fijian appeals court. In the Amedee case, this matter will be reconsidered at least one more time: Khudaintov’s company lawyer has obtained a stay of the judgment of the Court of Appeals pending a review by the Chief Justice of the Supreme Court of Fiji.[6]

But the case illustrates the frustrating and opaque web of corporate ownership that hampers US and European prosecutors investigating sanctioned Russian oligarchs and their co-conspirators aiding Putin’s war effort. The Russian president has deployed a global empire of money laundering emissaries since the early 1990s, when Putin began using his developed KGB skills by funding and carrying out illegal international missions against the West in the late 1990s. of the Cold War to liquidate the coffers of the Soviet state which had been under Soviet control with an iron fist for more than seventy years. Thirty years later, intelligence officials estimate that Putin’s global control over offshore cash and assets amounts to hundreds of billions of dollars, shifted and used strategically to fund his initiatives to antagonize the West.

Major data leaks and large-scale media projects such as the 2016 Panama Papers have cast a major spotlight on these syndicates and their methods, which the world’s most rogue regimes like Venezuela and Iran employ to hide personal wealth and prevent the confiscation of ill-gotten gains by prosecutors. Earlier this year, an anonymous leaker released documents revealing 30,000 Credit Suisse clients. And, unsurprisingly, the list included oligarchs, corrupt government officials and drug traffickers.[7] Following this revelation, in March, shortly after President Joe Biden announced his intention to prosecute those who profit from breaking US law in his State of the Union address.[8]— A letter from Credit Suisse urging its investors to destroy documents relating to loans secured by “jets, yachts, real estate and/or financial assets” has been sent to media around the world.[9] Swiss banks have long been scrutinized for enabling questionable, even immoral conduct, and the revelations here are not so much newsworthy for outlining the standard oligarch’s playbook, but rather for investors’ willingness to deliberately shed light on the traditionally tightly sealed operations of Swiss banks. .

To match the evolution of the sanctions avoidance playbook, the KleptoCapture Task Force will also focus on cryptocurrency. Obfuscating transactions using the anonymity offered by the underlying cryptocurrency technology to funnel crypto assets through multiple accounts with chain peeling tactics are no guarantee against discovery. The June 2021 FBI recovery of the Colonial Pipeline ransom[10] and its recovery in February 2022 of billions of stolen cryptocurrencies[11] amply demonstrate that cryptocurrency transactions can be traced and the wrongdoers caught.[12] Attorney General Merrick Garland’s promise to use the most sophisticated technologies should be a warning to those who avoid penalties.[13]

It will be in the weeks and months to come that the continued effectiveness of Task Force KleptoCapture will be tested. It must deal with the legal and logistical hurdles of foreign crime, namely, establishing ownership of property and assets, researching and establishing crime, and seizing and executing mutual legal assistance treaty requests. But one thing is certain: the formation of this task force and its victory in the Fiji Court of Appeal was a warning shot across the way, figuratively, if not literally.


[1] https://www.maritime-executive.com/article/us-wins-second-round-in-court-battle-for-russian-yacht-amadea

[2] https://www.cnn.com/2022/05/05/politics/doj-kleptocapture-task-force-russian-assets-putin-oligarchs/index.html

[3] Identifier.

[4] https://news.bloomberglaw.com/us-law-week/russian-oligarch-task-force-limits-role-of-existing-doj-unit

[5] https://sports.yahoo.com/fbi-reportedly-linked-300-million-135741710.html

[6] https://www.fijivillage.com/feature/Supreme-Court-orders-a-further-interim-stay-of-Russian-superyacht-Amadea-r4f5x8/

[7] https://www.swissinfo.ch/eng/business/credit-suisse-asks-investors-to-destroy-documents-linked-to-oligarch-yacht-loans/47393822

[8] https://web.archive.org/web/20220326153653/https://www.whitehouse.gov/state-of-the-union-2022/

[9] Identifier.

[10] https://www.thomsonreuters.com/en-us/posts/investigation-fraud-and-risk/colonial-pipeline-ransom-funds/

[11] https://www.justice.gov/opa/press-release/file/1470186/download?utm_medium=email&utm_source=govdelivery

[12] https://www.isaca.org/resources/news-and-trends/isaca-now-blog/2021/did-the-fbi-hack-bitcoin-deconstructing-the-colonial-pipeline-ransom

[13] https://www.justice.gov/opa/pr/attorney-general-merrick-b-garland-announces-launch-task-force-kleptocapture

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