Securities Arbitration Lawyers BlogStolen Russian Assets Worth $5M Bounty To Tipsters
Wealthy Russians are attempting to get their money out of the country are spending their cash on valuable assets to bypass U.S. sanctions against the country.
Following the invasion of Ukraine, The US and other countries issued multiple sanctions against Russia. Many of these are economic sanctions intended to stifle the Russian economy and pressure Russia.
One of the most prominent sanctions is the freezing of trillions of dollars in Russian assets. The intent is to stop Russian elites and their family members from moving money out of Russia by way of investment purchases. Additionally, the US. imposed additional sanctions against President Putin and Russia’s former minister, Sergey Lavrov.
On February 26th, the Biden administration and many allies announced the removal of some Russian banks from the SWIFT financial messaging system. This stopped them from conducting international transactions. The sanctions added new restrictions on Russia’s Central Bank to prevent it from using its international reserves to bypass the sanctions. Several allied countries agreed to these actions. The Central Bank has continued to stockpile foreign reserves since 2014, when Russia invaded Crimea.
The next day, the Treasury Department announced a freeze on assets of the Russian Central Bank held in the United States, and imposed sanctions on the Russian Direct Investment Fund. This is a sovereign wealth fund that is run by a close ally of Vladimir Putin.
The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert to banks and other financial institutions to be on the lookout for transactions with a “nexus” or connection to sanctioned Russian elites and their proxies who attempt to sidestep the various sanctions.
The alert details multiple red flags that banks and other institutions should be aware of for potential reports to FinCEN, including the use of so-called “shell companies.” These companies can be used to make purchases of fine art, real estate, and other high-value items without the direct involvement of someone under the prohibitions.
Another warning flag is if a transaction seems to be way above or below fair market value for anything of high value. Requests from a Russian individual or entity for a bank transfer from a non-US bank to purchase something for all cash should also be noted and reported.
Also of note are frequent, high-value transfers that involve mining companies with “opaque and complex corporate structures,” especially for jewels, precious stones, and metals. Other potential launderings could include transactions that include Russian transportation service companies that may be a cover for the illegal transfer of yachts and vehicles.
By its very nature, cryptocurrencies are intended to facilitate anonymous transactions. Under the circumstances, Bitcoin and other cryptocurrencies may also be used to sidestep the current sanctions against Russia. Banks have not yet seen a widespread use of cryptocurrency, but FinCEN warns banks to be cautious of the potential and report any suspicious activity under the Bank Secrecy Act.
FinCEN lists these institutions as:
- Money Services Businesses
- Depository Institutions
- Securities and Futures
- Precious Metals/Jewelry Industry
- Mortgage Co/Broker
- Insurance Industry
- Casinos
The Treasury Department also launched the Kleptocracy Asset Recovery Rewards Program, also intended to confiscate “stolen assets” linked to corruption in foreign governments as well as the proceeds from the corrupt activity. “The program’s initial rewards will target the recovery of assets stolen by elites and their associates linked to the Russian government,” FinCEN said.
The full list of these potential transactions can be found on FinCEN’s website.
Investment Fraud Attorneys
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.