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As FBI agent Charles McGonigal, 54, was used in handcuffs, these metal symbols of repression and the end of freedom. When the former Special agent in charge( SAC) of the Counter-intelligence Division of the FBIs field office in New York returned from a trip to the Middle East, he suddenly felt the cold iron around his wrists; some of the FBI agents arresting him he certainly knew well-from 1996 until his retirement in 2018 McGonigal specialized in Counterintelligence, organized crime and Counter- espionage. During the later years, the policeman met Sergey Shestakov, 69, a former Soviet and Russian Federation diplomat who emigrated to the .S.U.S. after retirement in 1993 and worked as a Russian translator for .S.U.S. Federal Courts and prosecutors in New York. Shestakov introduced the FBI agent via email to an employee of a Russian oligarch, the owner of an aluminum company in Russia. Court papers noted his control of “vast wealth” and “close connections to the Russian state”-Oleg Deripaska suddenly faced a problem, on April 6, 2018, the United States Treasury Department’s “Office of Foreign Asset Control” had declared Deripaska as a “Specially Designated National”, meaning his accounts were frozen, and no moreglobal financial transactions were possible.
McGonigal was still in the service of the FBI when he traveled to Vienna and London to meet the troubled Oligarch in his various residences. Deripaska offered a hefty sum as a fee if the FBI agent would help in lifting the sanctions, a so-called” delisting”, additionally assisting an International law firm based on Manhattan, which the Oligarch paid a monthly retainer of 175 000 dollar for its attempts to get him off the sanction list. 25 000 dollars as a down payment were agreed upon between the FBI agent and the Oligarch, the court papers suggest. The Russian had another priority, he needed information on a fellow oligarch with whom he was competing for a large corporation in Russia.
In August 2021 McGonigal, Shatokov, and the Derispaska employee, identified by the FBI as “agent 1”, negotiated a contract for the investigation: a Cyprus-based corporation would pay a firm in New Jersey monthly 51 280 dollar upon execution of the contract and 41 790 dollars monthly for “ business intelligence services, analysis and relevant to the Russian corporation) its business operations and shareholders.” The New Jersey corporation, noted the indictment, did receive the payments for McGonigal and Shestakov. On August 13,2021 , 51 280 dollars were wired from a Russian bank , to be followed by the agreed monthly payments of 41 790 dollars between august 18 and November 19, 2021, the court revealed in its indictment. The Deripaska employee, allegedly a member of the Russian espionage service, Shestakovand the now-retired FBI agent, communicated online, never using the name Deripaska, but hiding his identity behind, “the big guy”,” the individual” or “our client in Vienna” . The law firm in New York hired McGonigal as a “consultant and investigator” , allegedly paying him 25000 dollar, his payments transferred from Russia to a U.S. account. On or about October, 28, 2021 a contact informed the former FBI agent that a third party had located “dark net files”, revealing hidden assets valued 500 million dollar. McGonigal started negotiating with Deripaska, the Oligarch, about payments for the secret documents wanted by him , but these shady business relations came to an abrupt end. Cold metal handcuffs-the end of an illusion.(Sealed Indictment Chales McGonigal and Sergey Shestakov, defendants in the U.S. district court).
They should have known better
On January 23, 2023 “National Public Radio” (NPR), and other news outlets revealed in headlines that “ A former high-level FBI agent faces charges for aiding a sanctioned Russian oligarch.”The Federal indictment,unsealed by the .S.U.S. District Court, Southern District of New York”, charged McGonigal and Shestakov each with five counts of alleged criminal activity, including one count of conspiracy to commit money laundering , one count of conspiring to violate and evade U.S. sanctions, and one count of money laundering. Each charge carries a maximum sentence of 20 years. (NPR) A New York US Attorney, Damian Williams ,declared:” They both previously worked with Deripaska to attempt to remove his sanctions, and, as public servants, they should have known better. This office will continue to prosecute those who violate .S.U.S. sanctions enacted in response to Russian belligerence in Ukraine in order to line their own pockets. The Paolo Alto-based international law firm “ Wilson, Sonsini, Goodwin &Rosati” published on January 19 , 2023, a special report titled “Increased Scrutiny in the .S.U.S. and the .K.U.K.
on the Financial Activities of Russian Oligarchs”( Wilson Sonsini), noting that “ as the war in Ukraine is raging on , recent advisories from financial crime agencies in the United States and the United Kingdom indicated that illegal activities of Russian individuals and entities including persons closely connected to the Kremlin” were “beyond traditional banking and financing and extend to dealings in securities, real estate, artwork, jewelry ,crypto , and other high- value assets.” The law firm writes that in July 2022, the .K.U.K.’s National Crime Agency (NCA) issued a Red Alert on techniques being used by Russian oligarchs to evade sanctions imposed following the invasion of Ukraine, including “ the transfer of assets such as shareholdings in holding companies to trusted proxies such as relatives or employees; the sale or transfer of assets at a loss to realize their value before sanctions take effect; and the divestment of assets to assure that sanctioned persons ownership stakes are below 50 percent threshold or relinquishing previous controlling stakes.
”The Red Alert also noted that non sanctioned third parties potentially could enable and facilitate these activities, including lawyers, financial advisers and auctioneers .The use of alternative payment methods to evade sanctions is also cited,and specifically crypto assets.” The Red Alert explains that “Russian money launders have increasingly observed U.K. intelligence and operational activity providing cash to crypto -asset services, with the ability to move significant volumes of funds.”( “NCA, Red Alert, Financial Sanctions Evasion; Russian Elites and Enablers, July 2022”)
Suspicious Activities
“The .S.U.S. Department of the Treasury’s Financial crimes Enforcement Network” ( FinCEN) in December 2022 summarized trends on Russian Oligarch’s financial activities based on data from “Bank Secrecy Reports” (BSA) .Filed from March to October 2022, the authorities identified 454 reports detailing tens of billions of dollar in “suspicious activities” by Russian oligarchs, high ranking officials, and sanctioned individuals Around the time of the Russian attack, FinCEN showed that Russian oligarchs had transferred funds and assets ,including the transfer of beneficial ownership of companies , trusts and accounts”( “Financial Crimes Enforcement Network, Financial Trend Analysis ,Trends in Bank Secrecy , Art Data, Financial Activity of Russian Oligarchs in 2022, December 22, 2022”) . In January this year the British newspaper “Guardian” ( January 6, 2023) published previously secret transactions, through leaked, probably hacked ,documents of the Cyprus-based offshore service provider “MeritServus”, which for two decades or more has managed one of the wealthiest Oligarch’s ever , Roman Abramovich. The firm administered an estimated ten Abramovich trusts established to benefit the Putin ally involving hundreds of shell companies and off shore entities.
Analysis of financial statements in the leak, reported the “Guardian”, suggests that in the six months before Abramovich decided a sudden reorganization of his portfolio, “companies owned by just three of the trusts held “at least 785 million dollar with the Swiss bank UBS in Zurich and at least 155 million with the Barclay’s Monte Carlo branch. Barclay’s and UBS “ are facing questions about their ties to Roman Abramovich after his secret offshore trusts were reorganized shortly before and the .K.U.K. imposed sanctions on the Russian oligarch ”said the “Guardian”. (January 30, 2023) The banks, surprise, surprise, rejected any doubts about their management style, clouded in secrecy and innocence. A spokesperson for Barclay said, “it understands the importance of sanction regulations and takes the obligation ”very seriously. A representative for UBS confirmed the bank “ complies with all relevant sanction requirements.”
PART TWO
Several Billion for the Children
.K.U.K. and .U.E.U. governments have cast Abramovich as a pro Kremlin oligarch and in March 2022 imposed sanctions on him for allegedly benefitting from close relations with the Kremlin .” The Oligarch’s wealth , revealed “Bloomberg’s “Billionaire Index “(February 10, 2023) has increased by 72 million over the last year, driving his net worth to 8. 138 billion and his place in the rankings to the 270. richest person on the globe. Washington though, to this day, has not added Abramovich to its sanction list, reportedly Ukraine asked the White House not to impose sanctions against him after Abramovich emerged as an unofficial mediator in peace negotiations The billionaire, citizen of Israel, Portugal and Russia, for 19 years owner of the British football club “Chelsea’( which he sold for 5.3 billion dollar some months prior to be sanctioned) weeks or days prior to the invasion , transferred assets worth several billion dollars , including a fleet of yachts( the largest, 163 meters ,”Eclipse” ,estimated to be worth 700 million dollar) , to his seven children, of whom five are adults , and most likely, now billionaires. Shortly before Moscow launched its invasion,Abramovich declared them ultimate beneficiaries and removed himself from the trusts. In February 2023, a day after Russian tanks rolled across Ukraine’s border. Abramovich’s eldest daughter, Sofia, 25 , reportedly shared a post on Instagram with an anti-war message featuring the image of the Russian President blocked out with a red line. It read, “the biggest and most successful lie of the Kremlin’s propaganda is that most Russians stand with Putin”. (Guardian) On February 24, as Russian fighter jets began bombing Kyiv, the finishing touches were made to a radical reorganization of her father’s offshore empire set in motion three weeks earlier. Abramovich, no question, was warned of a war to explode, allowing him to take evasive actions. The hacked oligarch files “illustrate how Abramovich for decades used opaque trust structures to shelter his wealth in secretive offshore havens and point to the challenges western authorities face in piercing their complex structures to enforce sanctions” (“ Guardian”)
In the shadow of violence
Russian Yachts, seized by governments in Italy and Croatia, disappeared in daring nighttime escapes, and auction houses in New York, London, and Genève registered high sales of valued. art in the days prior to the Ukraine invasion and, at times, much later. Abramovich tried to sell a 10 million dollar property days before the invasion but was stopped by Portuguese authorities, who were informed by Portugal’s second largest bank of his attention and froze the asset on or about March 25, 2022 . The .S.U.S. and the European Union have sanctioned hundreds of Russian entities and more than 1000 Russian individuals since the start of the war, reported the “Voice of America”(June 29, 2022)In the shadow of violence enablers are dealing for individuals and the Moscow government; particularly active are dealers in Turkey, Armenia and Kazakhstan, complained Andrius Sytas , Prime minister of Latvia, (February 3, 2023, “Reuters”),”it seems pretty clear that traders are finding ways to trade goods legally”, they are just “not adhering to the sanction regime.” “A total ban of trade with Russia should be considered to help with sanction avoidance”, suggested Kaja Kallas, prime minister of Estonia.” A multinational task force created in March last year as part of the western efforts to pressure Russia to end its invasion, says it has blocked or seized more than 30 billion dollar worth of assets owned by Russian oligarchs. In addition to confiscating luxury yachts, jets, mansions and other assets belonging to the wealth brigade of Putin.The task force known as REPO( Russian elites, proxies, and oligarchs )confirmed it had frozen about 300 billion in Russian Central Bank reserves, the majority of these funds held by European banks, and tens of billions are located in the U.S. In addition to REPO the American Justice department has set up an interagency task force named “ Task Force KleptoCapture”. The European Commission has created its own Freeze and Seize task force. Recently the .S.U.S. Treasury Departments top sanctions official was on a trip to Turkey and the Middle East to warn countries and businesses that they could lose access to G7 markets if they do business with countries subject to .S.U.S. curbs, as Washington “cracks down on Russian attempts to evade sanctions imposed over its war in Ukraine “(“Reuters”)
The search for sanctioned oligarchs stretches global, their hidden assets are slowly uncovered and more sanctions imposed.-- the 106 meter yacht “Amadea”, worth 300 million dollars and owned by the Oligarch Suleiman Kerimov (estimated wealth 12.4 billion dollars) was seized in April 2022 in Fidji, Southern Pacific Ocean , then transferred by .S.U.S. sailors to San Diego Bay, Southern California. In April 2022 Spanish authorities confiscated the 90 million dollar yacht, Tango”, property of Russian billionaire Viktor Vekselberg-on January 20, 2023, Washington’s Justice Department announced the “ arrest and criminal charges against British and Russian Businessmen for Facilitating Sanction Evasion of Russian Oligarch’s $90 million yacht” .(Department of Justice Office of Public Affairs Washington D.C) The British citizen ,Richard Masters,52,manager of a yacht management company on the Spanish island Palma di Mallorca, risks of being extradited to the .S.U.S. authorities. The arrest warrant for his co-defendant, a Russian citizen named Vladislav Osipov, 51, is outstanding-Interpol is looking for him. The two accused men allegedly facilitated the continued operation. Osigov for example, an employee of the Oligarch, designed a new, complicated ownership structure of shell companies to hide Vekselberg’s ownership of the vessel. Masters took over the yacht management and “conspired with others”, as the Justice Department claims, to evade .S.U.S. sanctions; the obfuscations allowed the crew to continue to do business with numerous .S.U.S. companies. “The effects of those felicitators”, said the indictment, “ permitted “Tango” to continue as luxury yacht, with the full array of services and luxury goods available to it, supported by hundreds of thousands of dollars of illegally obtained .S.U.S. services and .S.U.S. financial transactions, and all for the benefit of Vekselberg.”A report by the “.S.U.S. Senate Permanent Subcommittee on Investigations” (July 29, 2020),“the art industry and .S.U.S. policies that undermine sanctions”, focused on the financial activity of Oligarch’s Arkady and Boris Rotenberg following sanctions after the annexation of Crimea in 2014.
Squeezing the finances of Putin
The subcommittee based its findings on information requested through its subpoena power from private companies, including over one million documents from seven financial institutions and the four major auction houses; congress also conducted interviews with former and current employees of auction houses. Shell companies linked to the Rotenbergs transferred over 120 million dollars through the .S.S.U.S. to Russia during a four-day window between the march 16 , 2014, executive order announcing the .S.U.S. would impose sanctions on Russia for the annexation of Crimea and ,and the Treasury Department specifically naming the Rotenberg’s as sanctioned on March 20. Purchases of more than 18 million dollars in high value art at New York auction houses and deals were traced back to Rotenberg linked shell companies in the months following the imposition of sanctions. As well as more than 91 million dollars in other post auctions transactions to the same Rotenberg-linked shell companies were documented. On February 2, 2023, “Reuters – writer Luc Cohen “ reported that a Russian oligarch had been “ordered to forfeit 5.4 million dollars to .S.U.S., Ukraine may get funds.” The ruling by .S.U.S. District Judge Paul Cardephe in Manhattan’s Federal Court, “marked the first forfeiture order for a Russian oligarch’s asset since the Department of Justice in 2022 launched a task force aimed at”squeezing the finances of Russian president Vladimir Putin’s allies in response to the Ukraine invasion.” U.S. U.S. U.S. authorities have accused Konstantin Malofeev, owner of the “Christian Orthodox Television Channel “ Tsargrad TV of financing separatists in Crimea. The Russian, who denied the accusation, was sanctioned by Washington in 2014 and charged with sanction violations in 2022.Prosecutors said in court papers late last year, reported “Reuters”, “they were entitled to the money in Malofeev’s account at Denver based” Mayflower Bank”, because he sought to transfer it to a business partner in violation of .S.U.S. sanctions .”Italian authorities are “on the hunt” (“ Guardian”, January 20, 2023) for a Russian oligarch after two of his luxury vessels (which were sized under .U.E.U. sanctions) mysteriously disappeared from a port of the Italian island Sardinia last summer.
A public notice, revealed reporter Angela Giuffrida, was issued, informing Dimitry Mazedin, the billionaire owner of a Russian mineral fertilizer company and father of the former Formular One driver Nikita Mazedin, of possible penalties against him over the alleged removal of his yachts. The boats, both named “ Aldabra” went missing from the Sardinian port of Olbia.One of the vessels was last seen in Bizerte, Tunesia; the other one moved towards Turkey weeks later. Mazepin, whose villa on the island was sanctioned, apparently hired a foreign company to move the vessels, which paid a Sardinian captain to move the ships away from Italy.
The intermediary company and captain have both been hit with a 300 000 Euro fine, although the captain claimed he did neither know the owner nor that the vessel was under sanction. The municipality of Forte dei Marmi, the Tuscan coastal town, is waiting for the Oligarch’s return to his Italian fiscal address. The whereabout of yachts and their owner are unknown. Another luxury boat owned by a Russsian oligarch disappeared in October from a coastal marina at the Croatian coast, reported “.P. A.P.” (January 27, 2023) The police arrested some suspects, the ship is believed to be in Turkish waters. It is unclear whether Russian billionaire Alisher Usmanov, mining and telecom tycoon, ever will drive his own car on Sardinia again- his 675 000 dollar-priced, armored, explosives and bulletproof, black “Mercedes -Maybach Guard VR10”, has been confiscated last summer ,confirmed the newsletter “Insider” (March 30, 2022) “L’ Unione Sarda”, a local paper ,revealed that authorities had impounded the tycoon’s real estate complex in the Gulf of Pevero, worth about 19 million dollars ,as well. The Russian’s seized assets on the Italian island, reported” L’Unione Sarda”, come to a total of 73 million dollars. Where is the willing FBI agent when we need him?
The opinions expressed in this article belong to the author.
