A review of financial trends involving Russian oligarchs and how U.S. financial institutions have helped in the identification of more than $30 billion in assets owned by sanctioned Russians was published last week by the Financial Crimes Enforcement Network (FinCEN).
The Bank Secrecy Act (BSA) mandates that U.S. financial institutions disclose any suspicious financial activity to the Treasury Department. The Russian Elites, Proxies, and Oligarchs (REPO) Task Force, which is co-chaired by the Department of Justice and the Treasury, has looked into reports regarding Russian dirty money.
On February 24, Russia invaded Ukraine. FinCEN sent three alerts to financial institutions between March and June asking them to disclose any attempt by wealthy Russians to evade sanctions by concealing their funds in American banks or turning them into virtual currency.
According to FinCEN's analysis report, more than 7,000 BSA complaints concerning suspicious transactions with a link to Russia were submitted between March 1 and October 31. According to FinCEN, some of the transactions ranged in time from January 2005 to October 2022.
The REPO Task Force was able to block, freeze, or confiscate more than $30 billion from sanctioned Russians as a result of 454 of the reports, according to a news statement from FinCEN dated December 22.
Russia accounted for the majority of the accounts, companies, or individuals involved in sanctioned transactions, followed by the United Kingdom, Switzerland, and other countries in Europe. Middle Eastern transactions followed, with Cyprus, the United Arab Emirates (UAE), and Israel being the most commonly engaged accounts.
Transactions involving the Caribbean, North America, and Asia were less common.
According to the allegations, a number of Russian oligarchs gave family members beneficial ownership of their accounts, businesses, and trusts around the time that Russia invaded Ukraine.
In February, one billionaire transferred more than $1 million to a US account held by his child. Another allegedly deposited $2 million to a UAE-based real estate business in March for the purpose of buying and selling houses.
According to FinCEN, on February 24 another oligarch connected to numerous shell firms transferred ownership of his Cyprus-based company to a business partner. Additionally, the oligarch transferred items like yachts, art, and aircraft, designating them as payments to his ex-wife and associates for the maintenance of properties he owned. He gave his children the beneficial ownership of numerous of his trusts and enterprises in the months of March and April.
Just before the invasion of Ukraine, some oligarchs tried to conceal their liquid assets by buying expensive art and other items.
Approximately 78% of the 454 BSA reports were submitted by depository institutions situated in the United States. According to FinCEN, holding companies and financial technology firms made up the majority of the remaining 19 percent of the submissions.
FinCEN said that 284 of the reports it examined cited the agency's alerts.
"The U.S. government will continue to leverage BSA reporting to investigate and counter their illicit networks," according to FinCEN Acting Director Himamauli Das, who was quoted in the agency's press release. "These targets tend to be extremely sophisticated at money laundering and illicit finance," he added.
By fLEXI tEAM