A civil forfeiture complaint was filed Monday for $3.4 million in proceeds from the sale of a music studio in Burbank, California.
The complaint alleges that the proceeds, which Russian oligarch Oleg Deripaska beneficially owns, are the proceeds of sanctions violations. An indictment charging Deripaska with sanctions violations was unsealed on September 29, 2022, and Deripaska remains large.
“As the allegations in the complaint once again demonstrate, those who have illicitly accumulated great wealth in support of lawlessness and international chaos invariably turn to the safety and stability of the United States’ rule of law principles in order to preserve their ill-gotten gains. It is predictable, hypocritical, and illegal,” said Co-Director Michael Khoo of Task Force KleptoCapture.
As alleged, Oleg Deripaska, an OFAC Specially Designated National, through a series of companies and associates, attempted to earn over $3 million in proceeds from the sale of a California-based music studio, said acting special agent in charge James E. Dennehy of the FBI.
According to the court documents, on April 6, 2018 (the Designation Date), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Oleg Deripaska as a Specially Designated National (SDN) in connection with its finding that the actions of Russia in Ukraine constitute an unusual and extraordinary threat to the national security and foreign policy of the United States.
Deripaska was sanctioned for his Russian government support and activity in the Russian energy sector. On or about the same date, OFAC also designated Basic Element Limited, EN+ Group and other entities for being owned or controlled by, directly or indirectly, Deripaska.
“Today’s filing of a civil forfeiture complaint against over $3 million in illicit proceeds of Oleg Deripaska exemplifies this office’s commitment to utilizing all available legal remedies to enforce our critical sanctions program,” said U.S. Attorney Damian Williams for the Southern District of New York.
On September 29, 2022, an indictment returned by a grand jury sitting in the Southern District of New York was unsealed, charging Deripaska and his associates Olga Shriki and Natalia Mikhaylovna Bardakova with a conspiracy to violate sanctions.
As alleged in the indictment, for over four years after Deripaska was sanctioned in 2018, and in violation of those sanctions, Deripaska paid Shriki to provide various services for his benefit in the United States.
These services included the sale of a music studio in Burbank, California, in 2019, as well as hundreds of thousands of dollars’ worth of other services to aid in Deripaska’s efforts to have two of his children be born in the United States in 2020 and 2022 and to purchase goods for Deripaska from the United States.
Before his designation by OFAC, in or about 2008, Deripaska acquired the music studio for over $3 million through a series of shell companies. The direct owner of the studio was an entity named Ocean Studios California LLC, which held a bank account at Wells Fargo (the Ocean Studios Account).
Between 2013 and 2018, Shriki lived in the United States and worked for Deripaska’s entity Basic Element in its Manhattan office.
Before and after the designation date, Shriki and Deripaska’s cousin Pavel Ezubov, among others, helped to operate and fund the music studio on behalf of Deripaska and made clear that Deripaska was the ultimate decisionmaker concerning the music studio.
In or about July 2018, approximately three months after OFAC designated Deripaska as an SDN, Shriki created a consulting business named Global Consulting Services LLC (GCS).
Through GCS, Shriki coordinated with associates of Deripaska, including Ezubov and Bardakova, to continue providing services to and for the benefit of Deripaska and to continue receiving funds from Deripaska or entities controlled by Deripaska. GCS opened a bank account at a bank in Manhattan.
Between August 2018 and September 2019, the GCS account received wires totalling over $500,000 from two entities associated with Deripaska, one entered into a separate agreement with an indicted co-conspirator to manage other Deripaska properties abroad after the designation date.
Beginning in July 2019, the Ocean Studios account received approximately $69,000 of transfers from Shriki’s GCS account, funded by overseas accounts tied to Deripaska. In or about June 2019, Shriki effectuated a sale of the contents of the music studio for more than $500,000.
In December 2019, more than a year after the designation date, while employed by Deripaska, Shriki assisted with the sale of the music studio by Ocean Studios California LLC in various ways, such as preparing the property for sale, coordinating with the accounting firm for the music studio, communicating with the real estate broker to approve the sale, facilitating the payment of outstanding taxes and bills for the music studio, signing over the property deed, and liquidating the other assets in the music studio. The music studio sale resulted in over $3 million in net proceeds deposited in the Ocean Studios account.
During 2020, while Shriki was employed by Deripaska and continued to perform services for Deripaska, Shriki requested that an accounting firm transfer the proceeds from the sale of the music studio to a bank account in Russia in the name of a company that funded the music studio’s accounts after the designation date — or, in the alternative, requested that the accounting firm add Shriki as a signatory on the bank account for the music studio so that Shriki could effectuate the transfer of funds on behalf of the owner.
The firm declined to effectuate the wire transfer itself.
In or about March 2021, Wells Fargo made the determination to block the Ocean Studios account and the funds on deposit due to the Ocean Studios account’s relationship with Deripaska.
The blocked funds subject to the complaint amount to approximately $3,435,676 plus accruing interest.
