US authorities appear to be adding Roman Abramovich to their list of sanctioned hyper-rich Russians after reports surfaced of a complex monetary transaction involving a US hedge fund linked to the UK- and Europe-sanctioned owner of the Chelsea football club.
Abramovich, allegedly the former steward on Boris Yeltsin’s plane and put in charge of managing state-owned Russian energy assets by then-rising Vladimir Putin, was reported Monday by the New York Times to be behind a $20 million transfer from one registered in the British Virgin Islands Shell company to a Cayman Islands investment vehicle controlled by a US hedge fund.
According to the newspaper, the unique transfer was the culmination of months of work “by a small army of traders and enablers across the United States, Europe and the Caribbean” who may have placed billions of dollars of Abramovich’s assets with prominent US hedge funds and private equity Company.
“In some cases, the participants didn’t even know whose money they were helping to manage,” reports the Times.
The transaction was organized by Concord Management, a US investment advisory firm based in White Plains, New York, which has been cited as a vehicle through which Abramovich, 55, may have invested $1.3 billion with US financiers including Empyrean Capital Partners in Los Angeles, Millstreet Capital Management in Boston, Millennium Management, Sarissa Capital Management and Sculptor Capital Management.
Concord chief executive Michael Matlin issued a statement describing the company as “a consulting firm providing independent research, due diligence and oversight of third-party investments.”
The report comes days after the US Financial Crimes Enforcement Network (Fincen) issued an alert saying “all financial institutions are vigilant about potential efforts to circumvent the sweeping sanctions and other US-imposed restrictions linked to the Russian introduced another invasion of the Federation in Ukraine”.
“With increasing economic pressures on Russia, it is critical for U.S. financial institutions to remain vigilant against possible circumvention of Russian sanctions, both by state actors and oligarchs,” said Fincen acting director Him Das.
The US government, through the Justice Department’s Kleptocracy Task Force, has also announced potential payouts of $5 million to Americans offering information leading to the seizure of assets owned by super-rich Russians.
Abramovich, believed to be in Moscow, has not been placed on US sanctions lists, although he has reportedly been desperate to sell funds through Concord in the secondary market since at least late February.
One of his yachts, the 533-foot Eclipse, equipped with two swimming pools, helipads and a mini-submarine, is currently docked in New York.
The EU last week imposed sanctions on Abramovich, saying his “privileged access” to Putin “helped him preserve his considerable fortune.” Similar penalties followed in Britain.
Another of Abramovich’s two superyachts, Solaris, is currently in Turkish waters, according to Reuters. Turkey has not agreed to follow or enforce UK and EU sanctions against Russian oligarchs, including Abramovich.
But the Biden administration has identified its Gulfstream G650ER jet, considered one of the most prestigious in private aviation, for apparent violations of US export controls after it flew to Moscow in recent weeks to violate sanctions.
Although Abramovich was not named by the US, several US-based hedge funds have reportedly agreed to freeze his assets under UK guidance.
“Currently, accounts attributed to Roman Abramovich are blocked for transactions. Therefore no distributions, redemptions or payments can be made and no subscriptions or contributions can be accepted,” wrote fund manager SS&C Globe Op.
The report comes as the Internal Revenue Service has asked US lawmakers to authorize more resources for the US sanctions program, and lawmakers are moving forward with a bill called the Enablers Act that would require investment advisors to identify their clients and to check.
According to documents cited by BuzzFeed, the consulting firm Concord, which was at the heart of the 2012 Abramovich deal, may have arranged more than 100 investments in various hedge funds and private equity firms, mostly for Abramovich.
The outlet cited a 2015 and 2016 report by State Street, a financial services company, that it had filed “reports of suspicious activity” regarding transactions Concord had arranged involving some of Abramovich’s Caribbean shell companies.