The Justice Department announces a task force to prosecute Russian oligarchs

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WASHINGTON –– The Justice Department on Wednesday announced it would set up a task force to go after billionaire oligarchs who aided President Vladimir Putin’s invasion of Ukraine, part of a United States effort to seize and freeze the assets of those who oppose violated sanctions.

The task force will muster resources from various federal agencies to enforce the sweeping economic measures imposed by the United States as Russia continues its unprovoked assault on Ukraine.

“We will spare no effort in our efforts to investigate, arrest and prosecute those whose criminal activities enable the Russian government to continue this unjust war,” Attorney General Merrick Garland said in a statement.

The task force is led by Lisa Monaco, the assistant attorney general. Andrew C. Adams, a veteran corruption prosecutor at the US Attorney’s Office in New York, will oversee day-to-day operations, according to several people who have been briefed on his new role and spoke on condition of anonymity to reveal his name.

The task force’s announcement comes after President Joe Biden used his State of the Union address on Tuesday night to warn Russian oligarchs and say the government is “joining forces with European allies to buy their yachts, their luxury homes, their… Find private individuals and confiscate nozzles.”

It’s unclear how successful the Justice Department will be in prosecuting wealthy Russians, but the ministry typically sets up task forces to underline its priorities and give prosecutors incentives to bring cases.

“Catastrophic events such as 9/11 or the invasion of Ukraine often prompt the government to take stock of its entire menu of enforcement tools to address a unique international security threat,” said David H. Laufman, partner at Wiggin and Dana, who oversaw enforcement of US sanctions laws as a Justice Department official during the Obama and Trump administrations. “That’s what the Biden administration is doing here.”

The formation of the team, dubbed Task Force KleptoCapture, adds to the series of actions Western leaders have taken in recent days to undermine Putin and the politically-affiliated elite in Russia, who are believed to have close ties to him . By imposing potentially crippling sanctions on Russia’s financial institutions and beginning freezes on trillions of dollars in assets controlled by Moscow and oligarchs, the United States and its allies hope to pressure Putin into pulling out of Ukraine.

The Biden administration has fined several Russian entities, including the country’s main development and military banks, one of its sovereign wealth funds and a subsidiary of state-controlled energy giant Gazprom. It has attempted to freeze Putin’s assets, as well as those of his Foreign Minister Sergei Lavrov and other Russian security officials. And it has restricted purchases of Russian government bonds, shut off some Russian banks from Western financial markets, and cut off Russia’s access to certain foreign technology products.

The European Union and Britain have taken similar punitive measures and also banned some military exports to Russia. But Russia has pressed ahead with its offensive attack in Ukraine.

The task force’s establishment reflects the rigorous scrutiny exercised on Russian oligarchs, many of whom built their fortunes from their ties to Putin. While not directly involved in Russia’s invasion of Ukraine, they support Putin by helping him hide his own fortune and stay in power.

Russia’s oligarchs have invested their fortunes in assets around the world, and their ties to Putin have helped them gain influence and connections in the worlds of fine art, real estate, Wall Street and Silicon Valley.

Some members of Russia’s elite are reportedly rushing to sell their assets to avoid confiscation, presumably in anticipation of sanctions. One of the country’s most prominent oligarchs, Roman Abramovich, said on Wednesday that he would sell Chelsea, the Premier League football team.

Other oligarchs with ties to Moscow have hired American lobbyists and law firms to try to weaken US sanctions laws such as the Magnitsky Act, a 2012 measure that initially sanctioned some Russian government officials in response to human rights abuses.

While many American law firms and lobbying firms have stopped representing Russian companies, not all have. For example, Skadden, Arps, Slate, Meagher & Flom, one of the country’s largest law firms, appears to be continuing to work on 2016 election-related litigation with Alfa Bank, which the United States sanctioned last week. The penalties against Alfa Bank were milder than those imposed on some other Russian financial firms and did not require the law firm to sever its ties. Skadden, Arps, Slate, Meagher & Flom did not respond to requests for comment.

Alfa Bank was founded by Ukrainian-Russian oligarch Mikhail Fridman, whom the EU slammed separately this week, noting that he was “labelled as a leading Russian financier and a forerunner of Putin’s inner circle.”

Adams has a track record of investigating Russian organized crime and recovering illegal assets. He joined the US Attorney’s Office in New York in 2013 and worked in the Violence and Organized Crime Unit before helping oversee money laundering investigations.

Since 2018, he has been involved in heading the Bureau’s Department of Money Laundering and Transnational Criminal Enterprises. Under his leadership, the department has successfully prosecuted cases involving an Armenian criminal organization, a bribery and money-laundering scheme involving Brazilian officials, and a racehorse doping ring, among others.

The task force will include prosecutors and Department of Justice investigators experienced in enforcing laws related to sanctions, export controls, corruption, forfeiture, money laundering and tax. And it will work with investigators from the IRS, FBI, Marshals Service, Secret Service, Department of Homeland Security and Postal Inspection Service.

The task force will target individuals and companies trying to circumvent money laundering laws, hide their identities from financial institutions, and use cryptocurrencies to evade sanctions and launder money. The Justice Department said it would use civil and criminal asset confiscation to seize assets from people under sanctions.

The department said its work would complement that of a transatlantic task force announced last weekend to identify and seize the assets of penalized Russian individuals and companies around the world.

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