The United States “annexed” the bank account of Konstantin Malofeev

The court confiscated $ 5.4 million of a businessman for trying to circumvent sanctions. A court in the United States has ruled to confiscate $5.4 million belonging to Konstantin Malofeev, a businessman and founder of the Tsargrad TV channel, who is under Washington sanctions, Reuters reports.

The agency notes that this is the first such decision since the US Department of Justice created the interagency task force KleptoCapture last spring, tasked with enforcing sanctions and export restrictions against Russia, as well as fighting “corrupt Russian oligarchs.” According to Reuters, in the future, this will allow the use of confiscated funds to restore Ukraine, which has suffered from hostilities.

Malofeev has been under US sanctions since 2014. The US authorities suspect him of financing Russian citizens who sought the separation of Crimea from Ukraine. The businessman himself denies these accusations. In 2018, Malofeev said that the sanctions did not affect him much.

Konstantin Malofeev

The fact that the federal prosecutor’s office in New York is seeking the arrest of money in an American bank account, which, according to it, belongs to Malofeev, was reported by CNN, citing court documents in June last year. We are talking about money frozen back in 2014, then Malofeev told Forbes.

“These idiots are reporting on the 2014 event. They froze my former investments in America in 2014. It’s just that now they apparently moved something somewhere from a frozen account and reported on how they continue to search for funds of sanctioned Russian patriots, ”he said.

Malofeev then stated that since 2014 he had no assets in the West. “I have been under Western sanctions since 2014, since that moment I have no assets in the West, and Prosecutor Garland does not know his job well or passes it off as what happened eight years ago today,” the businessman told Forbes. The US Treasury claimed to have placed restrictions on it for funding “separatist activities in eastern Ukraine” and ties to the Donetsk People’s Republic. In April 2022, the US also imposed sanctions against Konstantin Malofeev’s son Kirill, as well as companies that Washington links to Malofeev, his projects, or his son.

Last April, US Attorney General Merrick Garland said that Malofeev was trying to circumvent restrictive measures, in particular, he created a scheme for publications controlled by him to operate in Europe. US authorities also intercepted “millions of dollars” that the businessman was supposed to receive from an unnamed US financial institution.

In December, according to Reuters, prosecutors said they had the right to confiscate money from Malofeev’s Denver Sunflower Bank account because he “attempted to transfer it to a business partner in violation of US sanctions.” Malofeev did not challenge this requirement.

The New York federal prosecutor’s office said in court documents that they were entitled to the money because Malofeev tried to transfer it to a business partner in violation of U.S. sanctions.

In March 2014, Malofeev used a shell company in the Seychelles to invest $10 million in shares in Texas bank Strategic Growth Bancorp Inc., according to prosecutors. Prosecutors said that the very next year, Malofeev sold the shell company for $1 to an anonymous Greek business partner. At the same time, the sale agreement was dated July 2014 intentionally – before the date of the introduction of sanctions against the Russian businessman.

According to the statement, the Texas bank, while continuing to recognize Malofeev as the owner of the shares, signaled to the Treasury Department about an attempt to transfer funds. Prosecutors said Malofeev’s shares were converted into cash and deposited into a blocked account when Strategic merged with Denver-based Sunflower Bank in 2016. In a June statement on the case, Sunflower Bank said it was “proud to work with US law enforcement.” Neither Strategic Growth Bancorp Inc nor Sunflower Bank have been charged with wrongdoing.

In accordance with the sanctions regime, in light of the events in eastern Ukraine, Malofeev was prohibited from paying for or receiving services from American citizens, as well as from conducting transactions with his property in the United States. But according to the United States Department of Justice, the businessman allegedly violated those restrictions systematically for years after he was sanctioned.

“From at least 2013 to approximately 2018, defendant Konstantin Malofeev used the services of John Hanick, also known as “Jack Hanick” (“Hanik”), a US citizen, to provide funds, goods and services for and on behalf of Malofeev and companies owned and controlled by Malofeev, as well as to receive funds, goods and services from Malofeev. Malofeev continued to receive funds, goods and services from Hanik and provide funds, goods and services to Hanik after he was placed on the Specially Designated Persons List in December 2014 and in violation of the Ukraine-Related Sanctions Regulations, at least until the end 2018, according to the indictment. “As part of a scheme to engage Hanick in violation of the Ukraine-related Sanctions Regulations, the defendant Konstantin Malofeev used Hanik’s assistance to transfer and attempt to transfer an interest in property in the United States owned by Malofeev, a Greek associate of Malofeev, in violation of the Ukraine-Related Sanctions Regulations.”

With regard to the second count of the indictment, as noted, Malofeev allegedly intentionally and knowingly violated the International Emergency Economic Powers Act / IEEPA and engaged in activities in violation of US Presidential Executive Orders 13660, 13661 and 13662, as well as § 589.201 of Title 31 of the Code of Federal Regulations.

According to the agency, the KleptoCapture group temporarily seized other assets of Russian businessmen, including a $300 million yacht, but the court has not yet issued a confiscation order.

At the end of last year, the Senate and the House of Representatives approved the US budget for 2023 for $1.66 trillion. It includes an amendment allowing the transfer of confiscated assets of “Russian oligarchs” for humanitarian and military assistance to Ukraine. The law was then signed into law by President Joe Biden.

The Russian authorities have repeatedly criticized Western countries for sanctions and blocking the assets of Russian businessmen, calling it “robbery.” Andrey Klishas, ​​head of the Committee on Constitutional Legislation and State Building of the Federation Council, said that Moscow could respond in a mirror manner to the seizure of foreign state property, but the Constitution would not allow the same response in the event of confiscation of property of individuals.