One of the companies in the network, Netherfield, was involved in a complex offshore transaction that raised $50 million for a company controlled by Igor Shuvalov, one of Putin’s key advisers. The deal was reported in Barrons in 2011. The story did not name Abramovich as the owner of Netherfield, but the State Street investigators ultimately found that it belonged to him. In the months after the story ran, Netherfield was closed down, and its investments were moved to a newly formed company in the British Virgin Islands, the State Street investigators found.
Cash used for the network’s investments came from accounts at a small commercial bank in Austria called Kathrein. But when some investor accounts were set up, Kathrein did not name Abramovich as the ultimate owner of the money on any documentation. Kathrein did not comment on this story, citing Austrian bank secrecy laws.
A firm called Concord Management appeared to have been set up to oversee the investments. Yet State Street had trouble finding basic details about Concord — including whether it even existed.
Investigators were “unable to identify or verify the existence of CONCORD and the entity has a non-functional website,” they wrote in one suspicious activity report. “Several of the individuals named as contacts have a limited internet presence.”
“Additionally, the address provided for CONCORD … is a commercial office park.”
In a statement sent to BuzzFeed News, a spokesperson for Concord Management said the company “provides independent third party research, diligence and monitoring of investments, but does not invest in any funds.”
In the end, the State Street investigators reported Abramovich, his offshore companies, Concord Management, and Kathrein Bank to the Treasury for suspicious activity in December 2015.
They also noted that Och-Ziff and several other American investment funds, including BlackRock, had counted Abramovich’s offshore companies among their clients. State Street did not name those funds for suspicious or criminal activity, and there is no evidence that they acted against any financial regulations or laws.
Representatives for BlackRock and for Och-Ziff, now rebranded as Sculptor Capital Management, declined to comment on Abramovich. “BlackRock has a robust compliance program, abides by all applicable regulations, and takes the necessary steps to ensure adherence with relevant sanctions,” a spokesperson said. None of the funds commented on whether Abramovich remains a client, though some US investment companies have frozen his cash.
One employee at a fund that worked with Abramovich said that all the transactions were legal at the time, and that it was no secret in financial circles that Abramovich was investing in the US. “People knew who Concord was and they knew he was part of it, and there may be cases where his name is on paperwork,” the employee said. “There’s a dynamic where he is retroactively toxic in some people’s minds.”
In March 2016 State Street followed up with a series of additional suspicious activity reports offering further details about the bank’s ongoing investigation. The bank said it had halted a number of transactions linked to Abramovich’s offshore network until investigators had received documents showing how the companies were linked to Abramovich. The bank had been asking Abramovich’s advisers in the UK for paperwork detailing how he owned the companies.
Once those documents arrived, the money continued to flow. Investigators watched as Abramovich restructured his investments into new companies owned by an offshore trust that, they wrote, “allows RA to anonymously own/control the entities.” The bank said it was concerned that the moves “further serve to distance RA as the source of wealth and beneficiary of the assets.”
In the UK, Abramovich’s assets are now frozen. His properties, including a £125 million mansion in Kensington Palace Gardens, are in limbo.
So too is Chelsea Football Club, which has to operate under tight government controls to ensure Abramovich does not receive revenue from the club. Season ticket holders can still attend games, but the club is not allowed to sell any new tickets. Its millionaire football stars may have to stay in budget hotels for away games. Business owners across the world are lining up bids for Chelsea, which was once Abramovich’s most prized Western asset. The UK government has reportedly said that the proceeds of any sale would not go to Abramovich.
When or how American authorities might act remains unclear. Political pressure has been ramping up: Last week, three Democrats in Congress sent a letter to President Joe Biden urging him to sanction Abramovich, saying “U.S. sanctions against Abramovich are conspicuous by their absence.”
“I’m not sure why the US hasn’t acted yet,” Rep. Steve Cohen, a Democrat from Tennessee, told BuzzFeed News. “I understand we may need to act in concert with our allies, but in this instance we seem to have been late to the table.”
Meanwhile, Abramovich’s more mobile assets have moved away from the West. His yachts left European ports for the open sea, and his jets have flown to Russia and Istanbul.
Abramovich was once a familiar figure in the director’s box at Chelsea, but at the moment it is unclear where the enigmatic oligarch is. He was last seen in the luxury lounge of Ben Gurion Airport in Tel Aviv with a mask at his chin. He reportedly flew to Turkey, or maybe Moscow. ●
Source by www.buzzfeednews.com
