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Justice Department task force takes aim at Russian oligarchs and their riches

Russian billionaire and businessman Oleg Deripaska seen at the plenary session during the Saint Petersburg Economic Forum SPIEF 2022, on June 17, 2022, in Saint Petersburg, Russia.
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Russian billionaire and businessman Oleg Deripaska seen at the plenary session during the Saint Petersburg Economic Forum SPIEF 2022, on June 17, 2022, in Saint Petersburg, Russia.

Less than a week after Russian tanks swept across the Ukrainian border last February, Attorney General Merrick Garland announced a new Justice Department-led task force to go after Russian oligarchs who support President Vladimir Putin and his war machine.

Task Force KleptoCapture, Garland said, would hold accountable Kremlin-aligned Russian elites who try to evade sanctions the U.S. and its allies had imposed in response to Putin's invasion.

"We will leave no stone unturned in our efforts to investigate, arrest and prosecute those whose criminal acts enable the Russian government to continue this unjust war," Garland said in his announcement.

In the year since, the task force has brought charges against at least 35 individuals and corporate entities as the Biden administration and its allies seek to impose pain on Putin and the Russian elites who back him.

The most prominent oligarch charged so far is Oleg Deripaska, a Russian billionaire industrialist who U.S. officials say has deep ties to the Kremlin.

The task force also has brought charges against suspected Russian agents and the networks of individuals working with them to allegedly obtain advanced American technology that could be used by the Russian military.

"We thought it was really important to go after, in the first instance, those individuals whose corruption has fueled the Russian war machine," Deputy Attorney General Lisa Monaco told NPR. "And to send a very clear signal that we could work quickly with our partners and that we could set a pace for enforcement of these sanctions."

Part of that enforcement work has involved seizing the big-ticket items that Kremlin-aligned oligarchs have reaped from the allegedly ill-gotten gains.

Last May, for example, the FBI assisted authorities in Fiji in the seizure of a 348-foot luxury yacht that the U.S. says belongs to sanctioned oligarch Suleiman Kerimov.

The Amadea, which is valued at $300 million, now sits at a dock in San Diego.

Just last week, the department filed a forfeiture complaint for six properties in New York and Florida worth an estimated $75 million that prosecutors say belong Viktor Vekselberg, another sanctioned oligarch.

Monaco says that over the past year, the task force has seized, forfeited or otherwise restrained more than $500 million in Russian oligarch assets.

The task force, meanwhile, has now shifted into a second phase, she says, "which is go after the enablers, the facilitators, the companies that prop up and enable and facilitate the ability of these oligarchs to hide their wealth, to shield it, to evade sanctions, and to capitalize on the kind of dark corners of the global financial system."

A prime example of targeting so-called enablers is the case against Deripaska, who's been sanctioned for what the U.S. says are his ties to the Putin regime.

Federal prosecutors have charged Deripaska and three women with conspiracy to violate American sanctions. Part of the alleged scheme involved arranging for Deripaska's Russian girlfriend to give birth in the U.S.

Deripaska's U.S. attorney, Erich Ferrari, declined to comment on the case.

But Ferrari did say that his office, which specializes in sanctions issues, is fielding calls on a daily basis from Russians with sanctions-related questions.

"It's been a huge jump," he said. "I would say our caseload has doubled over the last year."

Some of the Russians calling him want advice on how to comply with sanctions, while others are looking for help to get out from under the punitive measures.

The task force's aggressive enforcement effort has had a ripple effect beyond just wealthy Russians.

"I think it's had an impact not just on how they [Russians] do business, but how other businesses do business with them," said Tom Firestone, an attorney who advises clients on sanctions matters.

He said everyone is more careful now in their dealings with Russians.

"I have lots of clients who are U.S., European businesses, and I think they're all especially careful now in terms of how they deal with Russians because of the sanctions, but also because criminal prosecution and sanctions get people people's attention," Firestone said.

While the task force and the broader international effort has imposed a degree of discomfort on Kremlin-aligned oligarchs, there's little indication that it has prompted them to pressure Putin to pull back in Ukraine — as some Western policy makers had hoped.

Alexander Gabuev, a senior fellow at the Carnegie Endowment for International Peace, said that's because oligarchs' voices don't matter to the Kremlin.

"The people who matter are people in charge of large armed bureaucracies," he said.

He points to the army, the police and the security services, although he notes that the people in charge of those organizations have been under U.S. sanctions for years, or were part of the decision making ahead of the Ukraine invasion.

As for the business elites closest to Putin, Gabuev says they all know that they will go down if Putin goes down.

"Everybody else is exactly people with means, but without any protection from the system and just too afraid to be thrown into jail," he said.

As the fighting on the battlefields of eastern Ukraine rages on and Putin shows no sign of looking for a brokered peace, the the Justice Department is putting to use a new tool that gives it the ability to transfer to Ukraine assets seized from sanctioned oligarchs.

The attorney general recently authorized the transfer of some $5 million to Ukraine — the first time this tool has been employed. The money pales in comparison to Ukraine's needs in the middle of a devastating war, but Monaco says it's just the first step.

"We're not pausing in our effort," she said. "We're going to move this money out as quickly as possible to the benefit of the Ukrainian people."

Copyright 2023 NPR. To see more, visit https://www.npr.org.

Ryan Lucas covers the Justice Department for NPR.