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Our client in Vienna
February 20, 2023

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.”


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.


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