An exclusive: Treasury official says US monitoring and countervailing of Russian intelligence services
Associated Russian War Crimes in the U.S.: Cooperation Between a Russian Military Execution and a Treasury Department Task Force Klepto Capture
EUREKA, Mo. — After falling out with his partner at a limousine company in the St. Louis suburbs, Martin Zlatev recently sought a lucrative new business opportunity: selling $30 million worth of rockets, grenade launchers and ammunition to the Ukrainian military.
“Time is of the essence,” the pair recently wrote to Ukraine’s Ministry of Defense. They outlined a plan to sell American, Bulgarian and Bosnian arms to Ukraine.
The US imposed additional sanctions on shipments to Russia after Russia’s war in Ukraine. Prosecutors say that Buyanovsky and Robertson discussed their options for continuing to send shipments to at least one client in Russia, including via third-party countries.
The US Justice Department has charged five Russian nationals and two US nationals for allegedly conspiring to violate US sanctions by smuggling US-made equipment to the Russian military, according to a recently unsealed indictment.
“The indictment alleges that these defendants attempted to smuggle a high-precision export-controlled item to Russia where it could have been used in nuclear proliferation and Russian defense programs,” US Attorney Vanessa Roberts Avery of the District of Connecticut said in a statement. “The danger created by such conduct is profound.”
On Wednesday, Garland told the Senate Judiciary Committee that he believed the Russian government was committing crimes against humanity and that the Justice Department supports the efforts to investigate and prosecute those crimes.
The indictments are the most recent of a number of actions law enforcement have taken with the help of the Department of Justice Task Force Klepto Capture, part of the effort to enforce sanctions against Russian government officials.
The seven individuals are unlawfully purchased and shipped millions of dollars.
The latest tranche of Treasury Department sanctions hit “over a dozen financial institutions in Russia, including one of the top-ten largest banks by asset value” – Credit Bank of Moscow Public Joint Stock Company – and wealth management firms. Individuals under sanctions have been known to turn to smaller banks as well as wealth-management firms to skirt sanctions, according to the Treasury Department.
The defendants created fake company names and used them to set up tens of millions of dollars in bank accounts to complete the transactions. One of the defendants allegedly bragged about how easy it was to dupe the banks, saying that there were “no worries…this is the sh*ttiest bank in the Emirates.”
According to the Justice Department, four individuals, three of which are from Latvia, and one from Ukranian, face charges for conspiring to smuggle a high-precision grinding machine to Russians.
According to the Justice Department, the three Latvians and the Ukrainian were taken into custody in their home countries on Tuesday at the request of the United States government. Charging documents have not been unsealed for the case, and it is not yet clear if the defendants have entered a formal plea.
The U.S. Department of State will continue its search for unlawfully procuring advanced semiconductors to furtherance of Russia’s brutal war on democracy
The items included a chip set of 45 advanced semiconductors, a $45,000 low noise cesium synthesizer, high quality spectrum analyzers, and expensive oscilloscopes and signal generators. Many are so-called dual-use devices that can be employed for military or civilian purposes.
“Our office will not rest in its vigorous pursuit of persons who unlawfully procure U.S. technology to be used in furtherance of Russia’s brutal war on democracy,” Mr. Peace said.
Grinin, Skvortsova, Ippolitov and Livshits remain at large, according to the Justice Department, while Brayman, a permanent resident in the US, Yermolenko, a US citizen, and Konoshchenok, a Russian national, are in custody.
The defendants could be sentenced to up to 30 years in prison if they are convicted of the most serious charges. Four of them remain at large.
Mr. Brayman, an Israeli citizen, and Mr. Yermolenko, a American citizen, were charged and pleaded not guilty on Tuesday.
Mr. Brayman was released on a $150,000 bond and subject to conditions that included turning in his passports and wearing an electronic monitoring device. David Lazarus, Mr. Brayman’s lawyer, said he was entitled to the presumption of innocence.
Mr. Yermolenko was released after posting a $500,000 bond partially secured by his house. Noori Hirozawa, Mr. Yermolenko’s attorney, declined to comment.
Treasury Under Secretary of Terrorism and Financial Intelligence Brian Adeyemo (Dennisyne) says the United States is ready to help Russia in the next war
When Estonian law enforcement searched a warehouse allegedly used by Konoshchenok they discovered 375 pounds of US-made ammunition, according to the Justice Department. The US will start proceedings to extradite Konoshchenok soon.
Grinin and Skvortsova would allegedly map out shipping routes while Livshits – through shell companies and US bank accounts – would allegedly purchase the items from US companies, according to the indictment.
Adeyemo’s remarks come on the heels of Treasury Under Secretary for Terrorism and Financial Intelligence Brian Nelson’s trip to the UAE and Turkey last month where he outlined how the department is working to “crack down” on Russian attempts to evade sanctions and export controls, as well as warn that there are consequences for working with sanctioned entities or not conducting proper due diligence.
“A big piece of this is information and intelligence sharing, which is something we started doing even before Russia’s invasion,” Adeyemo said in an interview with CNN. One of the big pieces of this is the evasion network that allows us to look across jurisdictions and share information.
In coordination with the G7, we have imposed economic sanctions and export controls on Russia that make it harder for Putin to wage his brutal war and degrade the Russian economy.
Spending the country’s savings is not enough to hide the damage caused by our actions. Russia is being forced to mortgage its economic future to save face. We need more work to do, and we will continue to do more until Russia stops its illegal invasion. But one year into this conflict, Russia’s economy looks more like Iran’s than a G-20 country,” Adeyemo will say.
“Last year, rather than the forecasted budget surplus, Russia suffered a budget deficit of $47 billion dollars. This was the second highest deficit the country has experienced in the post-Soviet era. According to Adeyemo, industrial production in Russia has decreased for 9 straight months and we are going to take further actions to decimate the Kremlin.
The latest actions by the Treasury Department are included in a number of new measures announced by the Biden administration Friday that are meant to deter the support of the Russians in the conflict that is entering its second year with no signs of relenting.
The White House fact sheet says the administration imposed sanctions on more than 200 people and entities, including both Russian and third-country actors that are supporting Russia.
The latest tranche of Treasury Department sanctions target a total of 22 individuals and 83 entities, according to a Treasury Department news release, and were taken in coordination with the Group of 7 nations.
Among those sanctioned by the Treasury Department Friday are Swiss-Italian businessman Walter Moretti “and his network of associates and companies” – including companies based in Switzerland, the United Arab Emirates, Malta, Bulgaria and Russia – whom the Treasury Department said “have covertly procured sensitive Western technologies and equipment for Russian intelligence services and the Russian military, including hydraulic presses, armament packages, and armor plating.”
“These targets include government ministers, governors, and high-level officials in Russia, as well as six individuals and three entities operating in parts of Ukraine occupied by Russia, facilitating grain theft, and governing on behalf of Russia,” he said.
The Department designed three of Russia’s nuclear weapons companies and three of its civil nuclear entities to operate under aRosatom organizational structure. In taking these actions, we highlight that Russia uses energy resources, including in the nuclear sector, to exert political and economic pressure on its customers globally,” the top US diplomat said.
In addition, they hit three companies “involved in expanding Russia’s future energy production and export capacity,” including those “involved in the design and construction of the Sever Bay Terminal as part of the Vostok oil projects,” Blinken said.
Carbon fiber and related materials are used in nearly all defense- related platforms including aircraft, ground combat vehicles, ballistic missiles, and military personal protection gear, as well as other weapons systems. They also imposed sanctions on companies tied to Russia’s aerospace, technology and electronics sectors.
Cyril Gregory Buyanovsky and Douglas Robertson are accused of exporting controlled goods without a license, filing false export information, and skirting US law by buying goods outside the country.
The Department of Commerce flagged a shipment of KanRus in February of 2022, because it didn’t have the proper licenses.
Robertson, a commercial pilot, told a Russia-based client that things are complicated in the US and that they needed to pay less than $50,000 because there would be more paperwork and visibility. There was a shipment to that Russian client that was later sent to Laos.
Merrick Garland, Attorney General Zelensky, and the Russian War Machine: a State Task Force on War Crimes in the United States
Attorney General Merrick Garland made an unannounced trip to Ukraine on Friday, according to a Justice Department official, his second trip to the country after Russia invaded a little more than a year ago.
President Joe Biden made his first trip to Ukraine since the war began almost two weeks ago and is one of many trips made by members of Biden’s Cabinet. Treasury Secretary Janet Yellen also recently made a trip to Ukraine to meet with Zelensky.
The attorney general went to Ukraine in June to help find and prosecute those who committed war crimes. During that trip, Garland announced that he was appointing Eli Rosenbaum, the top US so-called “Nazi hunter,” to lead a Justice Department team to identify and prosecute war criminals.
“The United States supports what is now being developed in The Hague, sponsored by Eurojust, looking into the possibility of creating that court [to charge crimes of aggression,]” Garland testified.
He said there were concerns that needed to be taken into account with regard to how that would deal with our own service members and other circumstances. The appropriate guardrails must be up. But we support any number of different ways in which war crimes, crimes against humanity, and the potential for crimes against aggression are investigated.”
“We thought it was really important to go after, in the first instance, those individuals whose corruption has fueled the Russian war machine,” Deputy Attorney General Lisa Monaco told NPR. We could send a very clear signal to our partners that we have the will to enforce these sanctions quickly.
Part of the work that was done was to seize the big-ticket items that the Russians had obtained from the ill-gotten gains.
Last May, for example, the FBI assisted authorities in Fiji in the seizure of a 348-foot luxury yacht that the U.S. says belongs to sanctioned oligarch Suleiman Kerimov.
Just last week, the department filed a forfeiture complaint for six properties in New York and Florida worth an estimated $75 million that prosecutors say belong Viktor Vekselberg, another sanctioned oligarch.
The task force has now moved to the second phase, which is going after the people that facilitate and facilitate the ability for these people to hide their wealth, to shield it, to evade sanctions.
A prime example of targeting so-called enablers is the case against Deripaska, who’s been sanctioned for what the U.S. says are his ties to the Putin regime.
Federal prosecutors have charged Deripaska and three women with conspiracy to violate American sanctions. The alleged scheme involved arranging for the Russian girlfriend to give birth in the U.S.
Russians are Not Stopped by U.S. Sanctions – but they Are Trying to Take Back the Pressure from the Kremlin
Russian citizens with questions about sanctions are being answered on a daily basis by Ferrari’s office.
Some of the Russians calling him want advice on how to comply with sanctions, while others are looking for help to get out from under the punitive measures.
“I have lots of clients who are U.S., European businesses, and I think they’re all especially careful now in terms of how they deal with Russians because of the sanctions, but also because criminal prosecution and sanctions get people people’s attention,” Firestone said.
While the task force and the broader international effort has imposed a degree of discomfort on Kremlin-aligned oligarchs, there’s little indication that it has prompted them to pressure Putin to pull back in Ukraine—as some Western policy makers had hoped.
Alexander Gabuev, a senior fellow at the Carnegie Endowment for International Peace, said that’s because oligarchs’ voices don’t matter to the Kremlin.
He points to the army, the police and the security services, although he notes that the people in charge of those organizations have been under U.S. sanctions for years, or were part of the decision making ahead of the Ukraine invasion.
As the fighting on the battlefields of eastern Ukraine rages on and Putin shows no sign of looking for a brokered peace, the the Justice Department is putting to use a new tool that gives it the ability to transfer to Ukraine assets seized from sanctioned oligarchs.
The attorney general recently authorized the transfer of some $5 million to Ukraine—the first time this tool has been employed. Monaco says that the money doesn’t compare to how much Ukraine requires in the middle of a war.
