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Justice Department launches plan to go after billionaire Russian oligarchs and their assets

USA TODAY logo USA TODAY 3/2/2022 Josh Meyer, USA TODAY
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WASHINGTON – The Justice Department on Wednesday announced a special task force to go after the assets of billionaire oligarchs who support Russian President Vladimir Putin and benefit from his regime.

The announcement comes after President Joe Biden singled out Russian financial and political elites in his State of the Union speech Tuesday night, saying, "Tonight I say to the Russian oligarchs and corrupt leaders who have bilked billions of dollars off this violent regime: 'No more.'" 

In this file photo taken Nov. 8, 2021, US Attorney General Merrick Garland speaks during a news conference over a ransomware cyberattack, at the Department of Justice, in Washington, D.C. - Garland announced Wednesday the launch of a task force to pursue "corrupt Russian oligarchs" and violators of sanctions imposed on Russia for its invasion of Ukraine. © Olivier Douliery, AFP via Getty Images In this file photo taken Nov. 8, 2021, US Attorney General Merrick Garland speaks during a news conference over a ransomware cyberattack, at the Department of Justice, in Washington, D.C. - Garland announced Wednesday the launch of a task force to pursue "corrupt Russian oligarchs" and violators of sanctions imposed on Russia for its invasion of Ukraine.

"We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets,” Biden said. “We are coming for your ill-begotten gains."

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More: Biden hits Russia's yacht-riding rich with sanctions. Will that blunt Putin's Ukraine invasion?

Attorney General Merrick B. Garland said the new unit, Task Force KleptoCapture, will surge federal law enforcement resources from various agencies, including the FBI, Treasury Department and Internal Revenue Service.

 The primary goal of the task force, Garland said in a statement, will be to enforce the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.

“The Justice Department will use all of its authorities to seize the assets of individuals and entities who violate these sanctions,” Garland said. “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. Let me be clear: if you violate our laws, we will hold you accountable.”

The task force was established to ensure that the full effect is gained from the new U.S. sanctions, which the Biden administration announced last week as part of an international effort to isolate Russia from global markets and impose serious costs for what it said was an unjustified act of war.

More: Biden announces sanctions on Russia for invading Ukraine. Here's what that means

The Russian oligarchs targeted so far include Aleksandr Vasilievich Bortnikov, director of the Federal Security Service of the Russian Federation, and his son Denis; Petr Mikhailovich Fradkov, chairman and CEO of PSB, or Promsvyazbank; and Sergei Vladilenovich Kiriyenko, first deputy chief of staff of the presidential office, and his son Vladimir.

Last Friday, the White House said the U.S. will impose individual sanctions on Putin himself, as well as Foreign Minister Sergey Lavrov, following similar sanctions announced by the U.K. and the European Union.

Although Putin has publicly claimed his salary of about $140,000 is his only source of income, kleptocracy experts have said that he has stashed away potentially $1 billion or more, in part derived from the profits that he has allowed oligarchs to make by having monopolies on various sectors of the Russian economy.

The new task force is welcome news and will bolster existing efforts to go after Russian kleptocrats, including many who have substantial investments in the United States, according to Stefan Cassella, former deputy chief of the Justice Department’s Asset Forfeiture and Money Laundering Section.

“Current law allows the Justice Department to use civil forfeiture to confiscate the proceeds of certain foreign crimes – including public corruption – if they are found in the United States. Indeed, that is one of the most important uses of civil forfeiture, and it is used frequently for that purpose.” said Cassella, who now serves as an expert witness and consultant to law enforcement agencies and the private sector as the CEO of AssetForfeitureLaw, LLC.

The new task force will target not only government-aligned elites but also suspected crimes of Russian officials, and those who aid or conceal their unlawful conduct, the Justice Department said.

Deputy Attorney General Lisa Monaco said the task force will also target anyone bolstering the Russian regime through corruption and sanctions evasion.

“We will deprive you of safe haven and hold you accountable,” said Monaco. “Oligarchs be warned: we will use every tool to freeze and seize your criminal proceeds.”

Task Force KleptoCapture will be overseen by Monaco and run out of the Office of the Deputy Attorney General. It will be staffed with prosecutors, agents, analysts, and professional staff across the Justice Department who are experts in sanctions and export control enforcement, anticorruption, asset forfeiture, anti-money laundering, tax enforcement, national security investigations, and foreign evidence collection, according to a DOJ release issued Wednesday.

It will also leverage all the Department’s tools and authorities to investigate and prosecute violations of sanctions imposed for prior instances of Russian aggression and corruption.

And according to the Justice Department, it will combat unlawful efforts to undermine restrictions taken against Russian financial institutions, including the prosecution of those who try to evade know-your-customer and anti-money laundering measures.

Because many of the efforts to evade U.S. sanctions have involved the use of cryptocurrency in recent years, the task force will investigate that too, in collaboration with a cryptocurrency task force announced by the Justice Department last month.

The process of targeting and seizing oligarch assets, especially significant ones like mega-yachts and U.S. real estate held by the oligarchs and their proxies is very complicated, and could take years, Paul Massaro, an anti-corruption advisor to Congress as a senior policy analyst at the U.S. Helsinki Commission, told USA TODAY.

In announcing the new task force, the Justice Department signaled that it wants to make a dent in the problem as soon as possible.

 “Arrests and prosecution will be sought when supported by the facts and the law,” the DOJ said in its statement.

“Even if defendants cannot be immediately detained, asset seizures and civil forfeitures of unlawful proceeds – including personal real estate, financial, and commercial assets – will be used to deny resources that enable Russian aggression,” the DOJ statement added. “Where appropriate, information gathered through Task Force investigations will be shared with interagency and foreign partners to augment the identification of assets that are covered by the sanctions and new economic countermeasures.”

The task force will complement the work of a transatlantic task force announced on Feb. 26 by the Biden administration and leaders of the European Commission, France, Germany, Italy, the United Kingdom and Canada.

It will be led by a veteran corruption prosecutor assigned from the U.S. Attorney’s Office for the Southern District of New York. A Justice Department spokesperson declined to identify the prosecutor on Wednesday, but DOJ described that person as someone with “a long and successful track record of investigating Russian organized crime and recovering illicit assets.”

The task force will also include deputy directors from both the National Security and Criminal Divisions at Justice Department headquarters, and more than a dozen attorneys from those divisions and from DOJ’s Tax Division, Civil Division, and U.S. Attorney’s Offices across the country.

On the investigative side, it will include agents and analysts from numerous law enforcement agencies, including the FBI; U.S. Marshals Service, U.S. Secret Service; Department of Homeland Security–Homeland Security Investigations; IRS–Criminal Investigation; and the U.S. Postal Inspection Service.

This article originally appeared on USA TODAY: Justice Department launches plan to go after billionaire Russian oligarchs and their assets

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