Russian oligarch Roman Abramovich reportedly used offshore companies to secretly invest at least $1.3 billion with US firms from 2001 to 2016, newly uncovered banking documents revealed.
Abramovich — a close ally of Russian President Vladimir Putin who has drawn scrutiny following the invasion of Ukraine — purportedly funneled money through murky offshore companies in the British Virgin Islands and Cyprus that was designed for US-based investment firms and hedge funds.
Officials at State Street eventually determined Abramovich was responsible for the investments and filed several “suspicious activity reports” with the US Treasury, BuzzFeed News reported, citing confidential filings it obtained from the Treasury Department’s Financial Crimes Enforcement Network.
The State Street investigators purportedly flagged Abramovich’s dealings to the feds, citing concerns that the companies tied to the $1.3 billion or more in investments often changed their governance structures — a move the bank officials warned could be a method to “conceal ownership” and cover up the links.
The officials also noted court documents suggesting Abramovich obtained power in Russia by making “substantial cash payments” to secure “political patronage and influence.” US banks are required to report suspicious investment activity to the Treasury.
According to BuzzFeed’s investigation, State Street never handled Abramovich’s money, but one of the bank’s divisions had a contract working on behalf of hedge funds — including the performance of anti-money laundering checks.
State Street became aware of the situation after following up on a Wall Street Journal report that US officials were investigating whether hedge fund Och-Ziff was aware of a loan that a company in which it had invested made to Zimbabwean dictator Robert Mugabe, BuzzFeed reported.
During the probe, the bank’s investigators discovered Abramovich’s network of offshore companies and began probing their activity — an effort that eventually resulted in the filing of “suspicious activity reports.”
State Street uncovered one transaction in which a company owned by Abramovich, dubbed Netherfield, was involved in an offshore deal to raise $50 million for a firm controlled by Putin crony Igor Shuvalov. Netherfield shut down after the deal went public and its investments were shifted to another firm based in the British Virgin Islands.
State Street also determined that a firm called Concord Management appeared to be handling investments linked to Abramovich, but investigators were unable to uncover much information about it — including whether it actually existed.
BuzzFeed spoke to an employee at a fund involved in dealings with Abramovich who said it was well known that the Russian oligarch was making US investments — adding that all of the transactions were legal at the time.
“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.”
Abramovich did not respond to BuzzFeed’s requests for comment on the investments. Treasury Department officials could not immediately be reached for comment.
Abramovich has yet to be sanctioned in the US, though a growing number of Western nations have targeted the billionaire in the days since Putin ordered the invasion of Ukraine.
The United Kingdom slapped sanctions on Abramovich last week, freezing his assets and barring him from doing business within the country. The penalties stopped Abramovich’s hasty effort to sell the Premier League soccer club Chelsea. Other assets, such as Abramovich’s swanky superyachts and real estate properties, face potential seizure.
Abramovich could soon face similar penalties in the US. A group of three Democratic lawmakers asked President Biden last week to target Abramovich with sanctions — noting a lack of action against him so far was “conspicuous.”