The Groundworks of the Money Laundering Scheme
Russian Oligarchs Viktor Vekselberg and Vladimir Voronchenko are accused of running a money laundering operation through their real estate properties in the U.S. The Department of Justice has alleged that six luxury properties have been maintained by channeling millions of dollars into the U.S.
Voronchenko, Vekselberg’s associate, obtained an attorney who would be connected with purchasing these properties. According to the U.S. Attorney’s Office, Southern District of New York, the attorney managed the finances of the properties. Finances including property taxes, insurance premiums, and other fees associated with the properties. These finances were linked with the “Properties in U.S. dollar transactions from the Attorney’s interest on lawyer’s trust account (“IOLTA account”)” (U.S. Attorney’s Office, Southern District of New York).
Preventing Money Laundering and Sanctions Evasion in Real Estate
Money laundering is a crime that is pervasive throughout many economic avenues in the United States. Real estate is particularly vulnerable to money laundering schemes. For more information, click here.
On January 25, 2023, the Financial Crimes Enforcement Network (FinCEN) issued an Alert on Potential U.S. Commercial Real Estate Investments by Sanctioned Russian Elites, Oligarchs, and their Proxies. The Alert aims to help financial institutions identify potential sanctions evasion activity by providing potential red flags related to this activity.
Russian Oligarchs Attempt to Avoid Sanctions
Before Vekselberg was declared a Specially Designated National (SDN), “companies owned by Vekselberg sent approximately 90 wire transfers totaling 18.5 million dollars to the IOLTA account” between February 2009 and March 2018 (U.S. Attorney’s Office, Southern District of New York). The attorney used these funds to make payments for those properties.
After Vekselberg was declared as an SDN, the source of the funds changed. The IOLTA account started to receive wires from a shell company controlled by Voronchenko, Smile Holding Ltd., located in the Bahamas. The IOLTA account also received wires from a Russian bank account held by a Russian national. Approximately 25 wire transfers totaling 4 million dollars were sent to the IOLTA account between June 2018 and March 2022 (U.S. Attorney’s Office, Southern District of New York).
Even when the payments’ source changed, the payments’ management remained the same. After Vekselberg was sanctioned in 2018, Voronchenko tried to sell some of their properties.
On May 13, 2022, federal agents served Voronchenko with a Grand Jury subpoena (U.S. Attorney’s Office, Southern District of New York). The Grand Jury required his appearance for testimony and documents relating to the properties.
U.S. Attorney’s Office, Southern District of New York, states that nine days later, around May 22, 2022, “Voronchenko took a flight from Miami, Florida, to Dubai, United Arab Emirates, and then went to Moscow, Russia”. Voronchenko did not appear before the Grand Jury and has not returned to the U.S.
How TTI Can Help
Sanction Evasion, Money Laundering, and Real Estate can pose problems with staying in compliance. Truth Technologies ‘provides software that can help prevent financial crime within your organization. Contact us today for a free demo and see how we can help your organization adhere to the Bank Secrecy Act and AML/KYC regulations.
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