More than a year after the Russian invasion of Ukraine, a Justice Department task force set up to enforce U.S. sanctions on Russia continues to seize and forfeit assets owned by Russian oligarchs.
To date, the effort has resulted in roughly $1 billion worth of assets that have been seized and are subject to forfeiture.
But in the longer term, said Task Force KleptoCapture director Andrew Adams, the “more impactful” cases would target third-party actors involved in helping Russia dodge sanctions: money laundering facilitators, professional sanctions evaders and export control evasion networks.
In an interview with VOA’s Ukrainian Service, Adams, who is also acting deputy assistant attorney general in the U.S. Attorney’s Office for the Southern District of New York, discusses his team’s major accomplishments, as well as efforts to use proceeds of seized Russian assets for Ukrainian reconstruction, using newly granted congressional authority.
The following transcript has been edited for clarity and length.
In March of last year, Attorney General Merrick Garland launched KleptoCapture and appointed you as the director of this task force. Could you talk about your goals and achievements during this first year?
Andrew Adams, Task Force KleptoCapture director: The task force kicked off immediately after the full-scale invasion. By early March we had set up a group of attorneys, prosecutors, agents, analysts, specialists from around the U.S. government to focus on two key priorities. The first was a short-term rush for seizure and the beginning of forfeiture proceedings aimed at large expensive and movable assets, the yachts, the airplanes and the like.
At the same time, we knew that over the long term, the more impactful cases would ultimately be aimed at money laundering facilitators, professional sanctions evaders and export control, evasion networks.
In December when talking to VOA, you addressed the total approximate amount of foreign seized funds, both domestically and internationally. It was up to $40 billion. What portion of that is attributable to KleptoCapture?
Adams: So, to focus on what the Department of Justice brings to the table here, which is seizure and forfeiture pursuant to judicial warrants, pursuant to forfeiture actions in court, that number is roughly $1 billion worth of assets. There are warrants that are executed on airplanes. We’re talking about the yachts that have been seized. We’re talking about real property in the form of condos and luxury property around the United States, as well as bank accounts, securities holdings and the like.
Beyond that, you are getting into the realm of what our Treasury Department, our State Department, our Commerce Department and our foreign partners can do with their blocking powers, which can go significantly beyond what the Department of Justice can seize and forfeit.
In February, a New York judge ruled that U.S. prosecutors may forfeit $5.4 million belonging to sanctioned Russian oligarch Konstantin Malofeyev, and these funds may be used to help rebuild Ukraine. But recently, a U.S.-based Russian lawyer filed a claim against these funds. Do you expect the transfer to go through despite the legal challenges?
Adams: The funds that are now authorized to be transferred are $5.4 million. The period for putting in a claim passed without incident. And now those are free and clear to be given to the Department of State following the period for an appeal to pass. We fully expect that it will occur. And at that point the Department of State, working with our friends in Ukraine, will determine the best place for those funds to go. It is an example, I think, of a real success story from the last year, although $5.4 million is a drop in the bucket of the amount of harm that this war has caused Ukraine and the Ukrainian people. It’s a symbol of what can be done through judicial processes that respect due process, that respect third-party rights, that are in full conformity with our Constitution, and with international law.
And how many cases are close to adjudication?
Adams: The number of investigations that we have going at any given point is in the dozens. The way that we approach all of those is to think about the forfeiture possibilities. At this point, we have filed the Malofeyev action, which is essentially finished — it’s on appeal. There are roughly a half dozen different criminal cases that we filed in the late part of last year, as well as a civil forfeiture action against a set of real property, targeting about $75 million worth of property tied to Viktor Vekselberg.
VOA: Could you shed light on the role of international cooperation?
Adams: In terms of international cooperation, we operate in almost every case with significant international support. We’ve executed arrests in Estonia and Latvia, in Germany, in Italy, in Spain and elsewhere. We’ve made seizures in a number of countries around the world, including in some jurisdictions that are not traditionally viewed as the closest allies of the United States.
In December, Congress passed legislation giving the DOJ authority to direct the forfeited funds to the State Department for the purpose of providing aid to Ukraine. Could you talk about the importance of that decision?
Adams: It’s an incredibly important piece of legislation. As a legal matter it paves the way for us to make these transfers in a way that we can’t do very easily without this new authority. So, that was critically important – that the driving motivation for all of these cases at the end of the day is to give assistance to Ukraine. As a symbolic matter, it demonstrates both at home but also to our partners in Europe and elsewhere that there are means and mechanisms for providing exactly this kind of assistance to Ukraine through forfeiture.
The task force and broader international sanctions regime imposed a certain level of discomfort for some Kremlin-aligned oligarchs. Do you believe those sanctioned oligarchs’ voices matter to the Kremlin?
Adams: In addition to some public outcry even from people formerly close to the Kremlin, there are effects that go far beyond the specific oligarchs that come from the sanctions regimes and come from vigorous enforcement of the sanctions regimes. The effect that this has on financial institutions, on insurance companies, on aviation or maritime companies — in a way that has a material effect on the Russian war machine and the Kremlin’s ability to fund this war.
