The United States Department of Justice has recently moved to file a civil forfeiture complaint targeting more than $3.4 million in proceeds, from the sale of a music studio in Burbank, California, which allegedly belong to Russian oligarch Oleg Deripaska. The Southern District of New York's U.S. Attorney Damian Williams spearheaded the announcement, alongside Task Force KleptoCapture Co-Director Michael Khoo and FBI Assistant Director in Charge James E. Dennehy of the New York Field Office. The filing represents a concerted effort to clamp down on sanctions violations relating to the proceeds, understood to have connections with Deripaska, who has been previously indicted and currently remains at large.
In a statement obtained by the U.S. Attorney's Office for the Southern District of New York, Williams articulated the Office's dedication to "utilizing all available legal remedies to enforce our critical sanctions program." Despite the oligarch's absence, his influence appears to extend through complex financial networks which this legal action seeks to unravel. Khoo added insight into the Task Force's vigilance, especially relevant "nearly three years into Russia’s unprovoked further invasion of Ukraine," highlighting the ongoing commitment to protecting American financial systems from exploitation by criminal entities.
According to the complaint filed, the sanctions which form the basis of the allegations were initially imposed by the U.S. Treasury's Office of Foreign Assets Control (OFAC) on April 6, 2018. The indictment includes charges against Deripaska and his associates for participating in a conspiracy to violate the U.S. sanctions post his designation as a Specially Designated National (SDN), a status granted due to his support of the Russian government and involvement in the Russian energy sector.
Deripaska had acquired the Music Studio in 2008 through shell companies, with Ocean Studios California LLC later overseeing its operations, including holding a bank account at Wells Fargo Bank. Despite being designated an SDN, Deripaska's associates allegedly continued to operate and manage the studio, leading to the sale of its contents in June 2019 for more than $500,000 and the property itself in December 2019, garnering over $3 million that was subsequently deposited. In March 2021, Wells Fargo Bank chose to block the associated account after determining its connection with the sanctioned oligarch.
This case underscores a broader enforcement strategy by the Justice Department's Task Force KleptoCapture to pursue illicit financial activities and enforce the sanctions levied in response to Russian aggression in Ukraine. The FBI's commitment to halting sanction violations is exemplified in Dennehy's remarks, emphasizing the importance of punishing any attempts to undermine U.S. national security laws. Assistant U.S. Attorney Vladislav Vainberg is leading the current legal action, further backed by the Department of Justice's Office of International Affairs.
