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

Johnnie Pratt

Damian Williams, the United States Lawyer for the Southern District of New York, Andrew C. Adams, the Director of Task Drive KleptoCapture, Ivan J. Arvelo, the Special Agent in Charge of the New York Industry Business office of Homeland Safety Investigations (“HSI”), and Maged Behnam, Acting Special Agent in Demand of the Miami Industry Workplace of the Federal Bureau of Investigation (“FBI”), declared today the filing of a civil forfeiture complaint against 6 true attributes located in New York, New York, Southampton, New York, and Fisher Island, Florida, value about $75 million.  The Complaint alleges that the properties, which are beneficially owned by Russian oligarch Viktor Vekselberg, are the proceeds of sanctions violations and had been included in worldwide cash laundering in promotion of sanctions violations committed by, among other people, Vladimir Voronchenko, a/k/a “Vladimir Vorontchenko,” who was indicted on February 7, 2023. 

U.S. Attorney Damian Williams stated: “Today’s action, filed on the anniversary of Russia’s entire-scale invasion of Ukraine, seeks forfeiture of six luxurious homes owned by Viktor Vekselberg that his affiliate Vladimir Voronchenko preserved by funneling tens of millions of dollars into the United States.  With the submitting of this criticism, the United States sends a strong concept to individuals who violate sanctions and have interaction in cash laundering that the United States will use just about every accessible device to forfeit criminal proceeds and will use that funds to aid our allies in Ukraine underneath the freshly enacted law.”

Director of Process Drive KleptoCapture Andrew C. Adams said: “Strawmen, corrupt professionals, and shell companies could be the hallmarks of income laundering and sanctions evasion, but they are road blocks that diligent, committed investigators and prosecutors will surmount.  Today’s filing marks but a further action that the Section of Justice and our associates at HSI and FBI have taken toward dislodging ill-gotten gains from individuals who would attempt to evade U.S. sanctions, and towards making the benefit of these attributes readily available for assist to Ukraine.”

HSI Particular Agent in Cost Ivan J. Arvelo said: “For several years, Russia’s weaponization of corruption has relied on opaque legal structures – and Western enablers – to transfer, disguise, and spend stolen wealth, enriching its oligarchs and ultimately resourcing the war in the Ukraine.  Due to the fact the invasion, HSI New York and our companions have labored tirelessly to cut Russia’s corruptocrats and their assets out of the American financial technique.  These days we continue our active measures and take away jewels from the crown of but an additional oligarch, stripping him of the luxurious property he so cherishes.”

FBI Performing Specific Agent in Charge Maged Behnam explained: “The mission of the interagency Undertaking Pressure KleptoCapture is to implement sanctions, export restrictions, and financial countermeasures imposed by the United States in response to Russia’s unprovoked navy invasion of Ukraine one particular calendar year in the past.  This civil forfeiture complaint is an example of the Undertaking Force’s ongoing get the job done to fulfill this mission.  I commend the hard perform, devotion, and cooperation of this group of gurus.”

In accordance to the allegations in the Complaint submitted in Manhattan federal court docket currently:[1]

On April 6, 2018, the U.S. Section of the Treasury’s Place of work of Foreign Assets Command (“OFAC”) selected Vekselberg as a Specifically Selected Countrywide (“SDN”) in relationship with its locating that the actions of the Governing administration of the Russian Federation in Ukraine constituted an abnormal and remarkable menace to the national stability and international coverage 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, involving in or about 2008 and in or about 2017, Vekselberg, by way of a sequence of shell firms, acquired 6 actual homes 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 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 date of the Criticism, the Houses had been really worth approximately $75 million. 

Voronchenko, Vekselberg’s close close friend and business affiliate, retained an legal professional (the “Attorney”), who practiced in New York, New York, in connection with the acquisition of the Properties.  The Attorney also managed the finances of the Houses, together with by having to pay prevalent expenses, assets taxes, insurance rates, and other expenses involved with the Attributes in U.S. dollar transactions from the Attorney’s curiosity on lawyer’s have faith in account (“IOLTA account”).

Prior to Vekselberg’s designation as an SDN, concerning approximately February 2009 and March 2018, businesses owned by Vekselberg sent about 90 wire transfers totaling somewhere around $18.5 million to the IOLTA account.  At the direction of Voronchenko and his relatives member who lived in Russia, the Attorney employed these funds to make many U.S. dollar payments to sustain and assistance the Properties. 

Promptly immediately after Vekselberg’s designation as an SDN, the supply of the cash used to retain and support the Homes changed.  The IOLTA Account started to get wires from a financial institution account in the Bahamas held in the identify of a shell corporation managed by Voronchenko, Smile Keeping Ltd., and from a Russian lender account held in the title of a Russian countrywide who was similar to Voronchenko.  Amongst approximately June 2018 and March 2022, about 25 wire transfers totaling somewhere around $4 million were despatched to the IOLTA account.  Even though the supply of the payments improved, the administration of the payments remained the exact as right before: Voronchenko and his family members member directed the Legal professional to use these cash to make several U.S. greenback payments to preserve and company the Homes.  Additionally, soon after Vekselberg was sanctioned in 2018, Voronchenko and other people tried out to offer equally the Park Avenue condominium and the Southampton estate.  No licenses from OFAC have been utilized for or issued for any of these payments or tried transfers.  

On or about May perhaps 13, 2022, federal agents served Voronchenko on Fisher Island with a Grand Jury subpoena, which identified as for his particular appearance for testimony and his production of documents, which includes paperwork relating to the Attributes.  Around nine days later on, 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 failed to appear just before the Grand Jury and has not returned to the United States.

*                *                *

The Houses subject matter 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, Device 7002 PH2, Miami Seaside, Florida 33109 and
  • 7183 Fisher Island Generate, Units 7182 and 7183, Miami Beach, Florida 33109.

Mr. Williams praised the exceptional perform of the New York and Miami industry offices of HSI and the FBI.  Mr. Williams further thanked the Department of Justice’s Nationwide Protection Division and Business office of Intercontinental Affairs and OFAC for their guidance and cooperation in this investigation.

On March 2, 2022, the Lawyer General introduced the start of Undertaking Force KleptoCapture, an interagency legislation enforcement endeavor force devoted to enforcing the sweeping sanctions, export constraints, and financial countermeasures that the United States has imposed, together with allies and associates, in response to Russia’s unprovoked army invasion of Ukraine.  The Endeavor Drive will leverage all the Department’s equipment and authorities from endeavours to evade or undermine the economic actions taken by the U.S. government in response to Russian armed service aggression.

This case is remaining handled by the Office’s Income Laundering and Transnational Prison Enterprises Unit.  Assistant U.S. Lawyers Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett are in demand of this motion. 

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

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