US authorities appear closer to adding Roman Abramovich to its list of sanctioned hyper-rich Russians, after reports surfaced of a complex transaction of funds through a US hedge fund that was linked to the UK- and European-sanctioned owner of Chelsea football club.
Abramovich, reputedly the one-time steward on Boris Yeltsin’s plane, and tapped by the then up-and-coming Vladimir Putin to manage Russian state-owned energy assets, was reported by the New York Times on Monday to be behind a $20m transfer from a shell company registered in the British Virgin Islands to an investment vehicle in the Cayman Islands controlled by a US hedge fund.
According to the newspaper, the singular transfer was the culmination of months of work by “a small army of handlers and enablers in the United States, Europe and the Caribbean” that may have placed billions of dollars of Abramovich’s fortune with prominent US hedge funds and private equity firms.
“In some cases, participants weren’t even aware of whose money they were helping to manage,” the Times reported.
The transaction was organized by Concord Management, a US investment consultancy in White Plains, New York, that has been named as a vehicle through which the 55-year-old Abramovich may have invested $1.3bn 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 executive Michael Matlin issued a statement that described the firm as “a consulting firm that provides independent third-party research, due diligence and monitoring of investments”.
The report comes days after a red flag alert was issued by the US Financial Crimes Enforcement Network (Fincen), advising “all financial institutions to be vigilant against potential efforts to evade the expansive sanctions and other US-imposed restrictions implemented in connection with the Russian Federation’s further invasion of Ukraine”.
“In the face of mounting economic pressure on Russia, it is vitally important for US financial institutions to be vigilant about potential Russian sanctions evasion, including by both state actors and oligarchs,” said Fincen acting director Him Das.
The US government has also announced potential $5m payouts to Americans offering information leading to seizure of assets belonging to super-rich Russians, via the justice department kleptocracy taskforce.
Abramovich, who is believed to be in Moscow, has not been placed on US sanctions lists, despite what is reported to be a frantic effort by him to sell funds via Concord on 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 imposed sanctions on Abramovich last week, saying his “privileged access” to Putin has “helped him to maintain his considerable wealth”. It followed similar penalties by the UK.
Abramovich’s two superyachts, Bermuda-registered Eclipse and Solaris, are currently in Turkish waters, according to Reuters. Turkey has not agreed to follow or enforce UK and EU sanctions on Russian oligarchs, including Abramovich.
But the Biden administration has identified his Gulfstream G650ER jet, considered one of the most prestigious in private aviation, for apparent violations of US export controls after it broke sanctions by flying to Moscow in recent weeks.
Despite Abramovich not being named by the US, a number of US-based hedge funds have reportedly agreed to freeze his assets under guidance from the UK.
“Currently, accounts attributed to Roman Abramovich are blocked from transacting. As such, any distributions, redemptions or payment cannot be made and no subscriptions or contributions can be accepted,” fund administrator SS&C Globe Op wrote.
The report comes as the Internal Revenue Service has asked US legislators to approve more resources for the US sanctions program, and lawmakers push a bill, known as the Enablers Act, that would require investment advisers to identify and vet their customers.
According to documents cited by BuzzFeed, the Concord advisory firm at the center of the 2012 Abramovich transaction, may have arranged more than 100 investments in different hedge funds and private equity firms, mostly for Abramovich.
The outlet cited a 2015 and 2016 report by State Street, a financial services firm, that it had filed “suspicious activity reports” concerning transactions that Concord arranged involving some of Abramovich’s Caribbean shell companies.