DOJ launches team to enforce sanctions on Russian oligarchs

The Department of Justice (DOJ) is launching a team to enforce its sanctions on Russian oligarchs after President Biden pledged in his address to Congress to go after their “ill-begotten gains.”

Dubbed Task Force KleptoCapture, the DOJ is assembling a team of its experts in sanctions, money laundering, tax enforcement and anti-corruption to prosecute those who seek to evade the punishing sanctions the U.S. has imposed with the aim of targeting “Russian officials, government-aligned elites, and those who aid or conceal their unlawful conduct.”

“The Justice Department will use all of its authorities to seize the assets of individuals and entities who violate these sanctions,” Attorney General Merrick Garland said in a release. 

“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 U.S. has rolled out a series of sanctions on Russia, including targeting President Vladimir Putin and Foreign Minister Sergey Lavrov directly, as well as five prominent Russians with links to the Kremlin and their family members. 

The U.S. and European Union have locked away some $300 billion in Russian reserves and barred a number of Russian banks from access to the Society for Worldwide Interbank Financial Telecommunication system needed for transactions.

Biden previewed the DOJ’s move in his State of the Union address Tuesday evening.

“The U.S. Department of Justice is assembling a dedicated task force to go after the crimes of Russian oligarchs,” he said.

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

The task force will mine for those who break know-your-customer laws requiring identity verification as well as those who may seek to flout the sanctions using cryptocurrency.

It’s an issue that several Democratic senators raised with the Treasury Department on Wednesday, warning that “criminals, rogue states, and other actors may use digital assets and alternative payment platforms as a new means to hide cross-border transactions for nefarious purposes.”

While the U.S. and Europe have sought to cut off some of the wealthiest Russians, its elites are particularly likely to have assets across the globe.

A 2018 study in the Journal of Public Economics found that the “vast majority of wealth at the top is held offshore,” estimating as much as 60 percent of elites’ wealth is parked overseas.

But that also leaves Russians vulnerable to asset seizure, something the DOJ straightforwardly said it would be willing to do.

“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,” it said in its release.

There are signs some Russian oligarchs are nervous of such moves.

Roman Abramovich, a billionaire ally of Putin, is reportedly looking to sell Chelsea Football Club, an action taken after just days prior saying he would transfer ​​“stewardship and care” to the club’s charitable foundation.

According to The New York Times he has also been selling off other assets in the U.K., including real estate.

Abramovich is representative of the type of wealthy Russians critics say should be targeted — the owner of a vast real estate portfolio along with numerous yachts docked around the world and private planes, some of which he reportedly flew back to Moscow.

But The Washington Post reported that many flight restrictions may not apply to jets like Abramovich’s, which is registered in Aruba.

The globetrotting lifestyle that such wealth affords, however, is something various lawmakers have said the U.S. needs to target.

Sen. Lindsey Graham (R-S.C.) suggested such a task force last week, “to go after the oligarchs who enrich themselves from Putin’s misadventures. It’s now time for that crowd to lose their yachts, lose their luxury apartments, and to pay a price for being part of a thuggish group – a nation-state that really is a mafia-state.”

Updated at 12:39 p.m.