Sanctioned Russian Oligarch And Others Indicted For Sanctions Violations And Money Laundering

 

Sanctioned Oligarch Andrey Kostin Charged with Using U.S. Dollars to Operate His Two Superyachts; Oligarch and Two U.S. Persons Charged in Connection with Aspen, Colorado Home

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; Lisa O. Monaco, the Deputy Attorney General of the United States; Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”); and David J. Scott, the Special Agent in Charge of the Washington Field Office (“WFO”) of the FBI, announced the unsealing of an Indictment charging sanctioned Russian oligarch and the President and Chairman of a Russian state-owned bank, ANDREY KOSTIN, with participating in two separate schemes that violated U.S. sanctions.  In one scheme, KOSTIN and others conspired to evade sanctions and launder funds by using a series of shell companies and strawmen in order to access the U.S. financial system to operate, maintain, and improve KOSTIN’s two superyachts, collectively worth over $135 million.  The other scheme charges KOSTIN and two U.S. persons, VADIM WOLFSON and GANNON BOND, for their roles in providing goods, funds, and services to KOSTIN related to a luxury home in Aspen, Colorado, including wiring KOSTIN approximately $12 million after he was sanctioned.  WOLFSON and BOND were arrested this morning in Austin, Texas, and Edgewater, New Jersey, respectively, and will be presented in federal courts in Texas and New York.  KOSTIN remains at large and is believed to be in Russia.  The case is assigned to U.S. District Judge Gregory H. Woods. 

U.S. Attorney Damian Williams said: "As alleged, sanctioned oligarch Andrey Kostin and his co-defendants flouted U.S. sanctions to support his exceptionally lavish lifestyle.  Through complex schemes involving shell companies and illicit transactions, Kostin and his associates allegedly laundered funds and illegally made transactions with U.S. currency for the maintenance and enhancement of Kostin’s superyachts and luxury Aspen home, blatantly disregarding U.S. law.  This investigation highlights the collaborative efforts of this Office and our law enforcement partners around the globe to uphold critical sanctions put in place to support our national security goals and hold accountable those who seek to undermine them." 

Attorney General Merrick B. Garland said: “The Justice Department is more committed than ever to cutting off the flow of illegal funds that are fueling Putin’s war and to holding accountable those who continue to enable it.  That is why today we are announcing several additional enforcement actions that the Justice Department has taken to bring prosecutions against and seize assets of sanctioned enablers of the Kremlin and Russian military.”

Deputy Attorney General Lisa O. Monaco said: “Since the onset of Russia’s brutal and unprovoked invasion of Ukraine, the Justice Department has used every tool in our arsenal – including our international partnerships – to target the criminal actors and activity propping up Vladimir Putin, his henchmen, and his illegal war.  Over the last two years, our Task Force KleptoCapture has restrained, seized, and obtained judgments to forfeit nearly $700 million in assets from Russian enablers and charged more than 70 individuals for violating international sanctions and export controls levied against Russia.  The charges we announce today against oligarchs, facilitators, and money launderers are the next chapter: so long as Russia's aggression continues, so too will our resolve to hold its enablers accountable.  We stand firmly with the people of Ukraine.”

FBI Director Christopher A. Wray said: “It has been two years since Russia's unprovoked invasion of Ukraine and the FBI continues to go after the Russian criminals who finance and enable Russia’s war.  To the people of Ukraine fighting for their freedom: The FBI remains steadfast in our efforts to disrupt and hold accountable the criminals supporting the Russian War, and we will continue to stand with you to fend off Russian aggression for as long as it takes.”

FBI WFO Special Agent in Charge David J. Scott said: "As alleged, Kostin conspired with the defendants and others to violate U.S. sanctions.  Today's indictment demonstrates that the FBI will work with our partners to hold sanctioned oligarchs and their co-conspirators responsible for their crimes and ensure that they cannot use U.S. financial institutions to harbor illicit funds and goods."

As alleged in the Indictment:[1]

KOSTIN is a Russian oligarch who was sanctioned and designated a Specially Designated National (“SDN”) by U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) on April 6, 2018, pursuant to the International Emergency Economic Powers Act (“IEEPA”).  From at least on or about April 6, 2018, through at least on or about March 2, 2022, KOSTIN and others, including at times WOLFSON and BOND, participated in schemes to violate IEEPA through the provision of funds, goods, and services, including U.S. financial services and U.S. dollar transactions, to and for KOSTIN’s benefit.  KOSTIN also engaged in a scheme to commit money laundering to promote IEEPA violations.

Before and after OFAC sanctioned KOSTIN, he beneficially owned and controlled, through various shell companies, several assets worth tens of millions of dollars, including two superyachts identified as the Sea Rhapsody and Sea & Us.  The Sea Rhapsody, valued at approximately $65 million, is a 216-foot superyacht and has six staterooms, including two luxurious master cabins identical in size.  This superyacht is equipped with amenities including water toys, gym equipment, an infinity pool, a jacuzzi, a cinema and club area, and customized stationery.  The Sea & Us, valued at approximately $70 million, is a 205-foot superyacht that was custom-built for KOSTIN.

KOSTIN and others violated IEEPA on numerous occasions, including by causing U.S. dollar payments to be made for the maintenance, operation, and/or improvement of the Sea Rhapsody and Sea & Us for the benefit of KOSTIN and without an OFAC license, which is required to transact with an SDN.  In causing these U.S. dollar payments to be made, KOSTIN and others also committed international money laundering.

KOSTIN also owned a luxury home in Aspen, Colorado, that he purchased for $12.5 million in 2010.  From at least on or about April 6, 2018, through at least in or about September 2019, KOSTIN, WOLFSON, BOND, and others participated in a scheme to violate IEEPA by providing funds, goods, and services for the benefit of KOSTIN, whose property and interests in property, including the Aspen home, were blocked as a result of his SDN designation.  Specifically, notwithstanding having been designated an SDN by OFAC, KOSTIN and his conspirators schemed to operate, maintain, and improve KOSTIN’s Aspen residence in a manner designed to conceal KOSTIN’s continued ownership of this luxury asset.  In addition, in or about September 2019, KOSTIN, WOLFSON, BOND, and others committed additional sanctions violations by dealing in and transferring KOSTIN's blocked property.  Specifically, the conspirators arranged to sell the Aspen home and provide KOSTIN with approximately $12 million resulting from the sale.

KOSTIN, 67, of Russia, is charged with two counts of conspiracy to violate IEEPA, two counts of violating IEEPA, and one count of conspiracy to commit international money laundering, each of which carries a maximum sentence of 20 years in prison.

WOLFSON, 56, of Austin, Texas, a legal permanent resident of the U.S., is charged with one count of conspiracy to violate IEEPA and two counts of violating IEEPA, each of which carries a maximum sentence of 20 years in prison.

BOND, 49, of Edgewater, New Jersey, a U.S. citizen, is charged with one count of conspiracy to violate IEEPA and two counts of violating IEEPA, each of which carries a maximum sentence of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding work of the FBI and its Washington Field Office.  Mr. Williams further thanked the Department of Justice (“DOJ”)’s National Security Division, Counterintelligence and Export Control Section, and DOJ’s Criminal Division, Money Laundering and Asset Recovery Section for their work on this matter.

Assistant U.S. Attorneys Emily Deininger and David Felton for the Southern District of New York’s Illicit Finance and Money Laundering Unit, and Trial Attorneys Derek Shugert of the National Security Division’s Counterintelligence and Export Control Section and Oleksandra Johnson of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

This case was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitutes only allegations, and every fact described therein should be treated as an allegation.

Man Arrested for Making Threat to Arizona Election Official

 

A California man was arrested in San Diego for allegedly leaving a voicemail containing a violent threat on the personal cell phone of an election official with the Maricopa County Recorder’s Office in Phoenix, Arizona.

William Hyde, 52, of San Diego, is scheduled to make his initial appearance tomorrow at the federal courthouse in San Diego.

“As alleged in the indictment, the defendant left threatening messages on a Maricopa County election official’s personal cell phone the day after county officials certified the 2022 election results. The indictment alleges that the defendant accused the official of cheating the election and told the official to ‘run’ and ‘hide,’” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The Criminal Division is committed to aggressively investigating and prosecuting individuals who threaten election officials. We will not tolerate criminal intimidation of those who administer and safeguard our elections.”

According to an indictment, on or about Nov. 28, 2022, a victim election official attended a meeting of the Maricopa County Board of Supervisors, where the Board of Supervisors certified the 2022 general election results in Maricopa County. The following day, Hyde allegedly left the following voicemail message on the personal cell phone of the election official: “Run, [expletive].” Approximately one minute later, Hyde allegedly left the following voicemail message on the personal cell phone of the election official: “You wanna cheat our elections? You wanna screw Americans out of true votes? We’re coming, [expletive]. You’d better [expletive] hide.”

“Intimidation of election officials strikes at the very heart of our democracy,” said U.S. Attorney Tara McGrath for the Southern District of California. “Even just one case can have a ripple effect.  This office will aggressively prosecute any attempt to intimidate, threaten, or frighten election officials as they engage in these critical duties.”

“Election integrity starts with protecting those we entrust to administer elections,” said U.S. Attorney Gary M. Restaino for the District of Arizona. “We appreciate the admirable efforts of the Recorder’s Office and Elections Department in Maricopa County to efficiently register Arizonans as eligible voters, and to accurately and transparently tabulate their votes.”

“Individuals who work to ensure the integrity of our elections should not have to worry about their safety while working for the American people,” said Acting Special Agent in Charge TJ Holland of the FBI San Diego Field Office. “We will continue to collaborate with our local, state, and federal law enforcement partners to protect election officials and prosecute anyone who threatens to harm them.”

Hyde is charged with one count of communicating an interstate threat. If convicted, he faces a maximum penalty of five years in prison.

The FBI San Diego Field Office is investigating the case, with substantial assistance from the FBI Phoenix Field Office.

Trial Attorney Tanya Senanayake of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorney Seth Askins for the Southern District of California are prosecuting the case, with substantial assistance from Assistant U.S. Attorney Mary Sue Feldmeier for the District of Arizona.

This case is part of the Justice Department’s Election Threats Task Force. Announced by Attorney General Merrick B. Garland and launched by Deputy Attorney General Lisa Monaco in June 2021, the task force has led the department’s efforts to address threats of violence against election workers, and to ensure that all election workers – whether elected, appointed, or volunteer – are able to do their jobs free from threats and intimidation. The task force engages with the election community and state and local law enforcement to assess allegations and reports of threats against election workers, and has investigated and prosecuted these matters where appropriate, in partnership with FBI Field Offices and U.S. Attorneys’ Offices throughout the country. A year after its formation, the task force is continuing this work and supporting the U.S. Attorneys’ Offices and FBI Field Offices nationwide as they carry on the critical work that the task force has begun.

Under the leadership of Deputy Attorney General Monaco, the task force is led by the Criminal Division’s Public Integrity Section and includes several other entities within the Justice Department, including the Criminal Division’s Computer Crime and Intellectual Property Section, Civil Rights Division, National Security Division, and FBI, as well as key interagency partners, such as the Department of Homeland Security and U.S. Postal Inspection Service. For more information regarding the Justice Department’s efforts to combat threats against election workers, read the Deputy Attorney General’s memo.

To report suspected threats or violent acts, contact your local FBI office and request to speak with the Election Crimes Coordinator. Contact information for every FBI field office may be found at www.fbi.gov/contact-us/field-offices/. You may also contact the FBI at 1-800-CALL-FBI (225-5324) or file an online complaint at www.tips.fbi.gov. Complaints submitted will be reviewed by the task force and referred for investigation or response accordingly. If someone is in imminent danger or risk of harm, contact 911 or your local police immediately.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

Attorney General James Wins Trial Against NRA and Wayne LaPierre

Jury Finds NRA, Wayne LaPierre, Woody Phillips, and John Frazer Violated New York Law

Wayne LaPierre and Senior Executive Ordered to Pay $6.35 Million for Causing Damages to the NRA

New York Attorney General Letitia James today announced that the jury in her case against the National Rifle Association (NRA) and three current and former senior leaders has found the defendants liable for violating the law. The jury found that Executive Vice President Wayne LaPierre and former Treasurer and Chief Financial Officer (CFO) Wilson “Woody” Phillips were liable for financial misconduct and corruption in managing the organization. The jury concluded that LaPierre abused his position for his personal benefit and steered lucrative contracts to friends and relatives, including spending millions of organization dollars on lavish travel, private planes, expensive clothing, and more. LaPierre was found to have caused the NRA $5.4 million in damages and must pay $4.35 million. The jury also determined that Attorney General James has shown cause for removal of LaPierre from the NRA based upon his violations. 

The jury also found that the NRA failed to properly administer charitable funds and violated state laws that protect whistleblowers. Phillips and the current General Counsel and Corporate Secretary John Frazer were found liable for failing to uphold their duties as nonprofit executives. Phillips was ordered to pay $2 million in damages. Frazer and the NRA were also found liable for making false statements on the NRA’s regulatory filings.

“This verdict is a major victory for the people of New York and our efforts to stop the corruption and greed at the NRA,” said Attorney General James. “For years, Wayne LaPierre used charitable dollars to fund his lavish lifestyle, spending millions on luxury travel, expensive clothes, insider contracts, and other perks for himself and his family. LaPierre and senior leaders at the NRA blatantly abused their positions and broke the law. But today, after years of rampant corruption and self-dealing, Wayne LaPierre and the NRA are finally being held accountable. We will not hesitate to pursue justice against any individual or organization that violates our laws or our trust, no matter how powerful they are.”

Over the course of a six-week trial, the Office of the Attorney General (OAG) presented evidence revealing the extent of the NRA and its senior leaders’ violations of the law and misuse of NRA funds. The evidence presented included:

• Invoices of repeated private flight trips to the Bahamas taken by Wayne LaPierre with friends and family and paid for by the NRA, including some invoices which concealed passengers and destinations;
• Invoices of helicopter trips to NASCAR races to avoid being stuck in traffic;
• Expense reports submitted by Wayne LaPierre and paid by the NRA for reimbursement of outdoor mosquito treatment at his house, landscaping for his house, and gifts for friends and family;
• A no-show post-employment contract between the NRA and Woody Phillips to pay him $360,000 annually in addition to $3,500 in monthly office rent; 
• Invoices worth more than $4 million dollars from the NRA’s then-largest vendor, Ackerman McQueen, for “out-of-pocket” expenses that had no detail and were used as a pass through for other expenses incurred by NRA Executives, including high end travel expenses for Wayne LaPierre and hair and makeup expenses for LaPierre’s wife; and
• Testimony from whistleblowers detailing harassment, intimidation, or other forms of retaliation by the NRA for raising concerns about the misuse of funds.

Following the jury determination of liability against the NRA and the individual defendants, a separate court proceeding before Justice Cohen, sitting without a jury, will be held to determine whether to award non-monetary relief, including: 

• Whether an independent compliance monitor, which would report to the Court, should be appointed to ensure the proper administration of the NRA’s charitable assets.
• Whether an independent governance expert should be appointed to advise the Court on reforms necessary to the NRA’s governance to ensure the proper administration of the NRA’s charitable assets.
• Whether Wayne LaPierre and Woody Phillips should be permanently barred from re-election or appointment as an NRA officer or director, or from any other New York state not-for-profit corporation.
• Whether the NRA and John Frazer should be barred from soliciting or collecting funds on behalf of any charitable organization operating in New York.

Attorney General James thanks the jury for their time and service. 

Attorney General James filed a lawsuit against the NRA, LaPierre and the other current and former senior officers in August 2020. In January 2021, Judge Joel Cohen ruled in Attorney General James’ favor and denied motions to dismiss the case and change the court venue. In January 2021, the NRA filed for bankruptcy in an attempt to avoid accountability by trying to reorganize in Texas. In May 2021, a federal bankruptcy court in Texas rejected the NRA’s bankruptcy petition, stating, “that the NRA did not file the bankruptcy petition in good faith.”  

In September 2022, Judge Joel Cohen rejected another attempt by the NRA to challenge the Attorney General’s claims and affirmed that Attorney General James can seek an independent monitor to ensure the proper administration of the NRA’s charitable assets as part of her lawsuit. In December 2023, the New York State Supreme Court, Appellate Division, First Department affirmed that decision. In January 2024, a final effort to delay the trial was rejected by the Appellate Division, First Department.

On the eve of the trial, Wayne LaPierre stepped down as Executive Vice President and CEO of the NRA, a role he held for more than 30 years. Also days before the trial, the Office of the Attorney General (OAG) reached a $100,000 settlement with the NRA’s former Executive Director of Operations and Chief of Staff Joshua Powell in which he admitted wrongdoing.

Statement From Governor Kathy Hochul on White House Visit

“Today I traveled to the White House for conversations with President Biden, Chief of Staff Zients, Secretary Mayorkas and other White House officials. I had a chance to express my gratitude for President Biden’s leadership of our economy, securing major investments in transportation infrastructure and clean manufacturing that will create tens of thousands of jobs across New York.

“We also had a series of productive meetings, focused on immigration and finding solutions to New York’s migrant crisis. Speaker Johnson and the House Majority’s decision to kill a bipartisan immigration compromise will have devastating consequences for our state. In the absence of legislation, I expressed to President Biden and Chief of Staff Zients that New York would support executive action on immigration.

“These meetings made one thing exceedingly clear: President Biden is the leader our nation needs in these difficult times.”

 

Upcoming Events, Legislative News, Grant Opportunities, & More

(Friday) Extra, Extra Click here for this week's video: Bronx Chamber Celebrates Black History Month NYSABPRHAL Legislative Conference Implementation of Commercial Waste Containerization  NYC Small Business Open + Online Program New Credit Card Surcharge Law Take Upcoming Events The International Restaurant & Foodservice Show of New York 2024 3.3rd - 5th 2024 -10:00am to 5:00 pm Ladies First: Women's History Month Event 3.6.2024 Irish Heritage Month Celebration 3.14.2024 Women of Distinction - 3.22.2024 11:30am - 2:00pm Workforce Career Developing Skills for Success To Shape Future Careers - 4.9.2024 Event Highlight

The Bronx Chamber Celebrates Black Owned Businesses during our Annual Black History Month Celebration and Networking Event

On Thursday, The Bronx Chamber of Commerce hosted its annual Black History Month Celebration and Networking event at the Residence Inn by Marriot. This event celebrates the fullness of African American history, culture, and unique black-owned businesses throughout our borough. Businesses like: *   Papaye Restaurant *   Loc' & Lit *   AAA Environmental & Construction Services LLC For a list of minority-owned businesses in your area, Click Here

NYSABPRHAL Legislative Conference

Caucus Weekend 2024. A meaningful discussion about the future of New York State and the development of new technologies for business and economic growth. The Bronx Chamber leadership team traveled to Albany for the 52nd Annual Caucus, a weekend-long conference focused on building bonds and policy to impact New Yorkers positively. The mission is to engage New State residents of a minority descent in a dialogue about issues and policies that have an impact on their daily lives and communities. 

Commercial Waste Containerization

Starting next week on March 1, 2024, ALL businesses of any size MUST set out waste in a bin with a secure lid. This applies to ALL businesses that set out waste on the curb. This does not apply to businesses with waste collected from a loading dock. This includes catering, food manufacturing, food service, and food preparation businesses, food wholesalers, and retail food stores. It also includes businesses under the same name, under common ownership, or businesses pursuant to a franchise agreement with the same franchisor. For more information, Click Here

NYC SMALL BUSINESS OPEN + ONLINE PROGRAM

It's crucial that your small business has a strong online presence to compete in today's marketplace. The Open + Online program offers FREE website building, logo/branding design, or expert SEO (search engine optimization) consulting. For more information about this program, Click Here

NEW CREDIT CARD SURCHARGE LAW TAKES EFFECT

Governor Kathy Hochul announced a new consumer protection law that went into effect on February 11, 2024.  This new law will clarify New York’s existing credit card surcharge law. The NYS Division of Consumer Protection assists aggrieved consumers in the marketplace, and the New York State Attorney General and local governments have the authority to enforce the credit card surcharge law.  For more information, Click here

BUSINESS OPPORTUNITIES

NYC Funds Finder NYC's Department of Small Business Services (SBS) and Next Street announced the launch of a new platform connecting small businesses with trusted resources they need to open, grow, and maintain their business. The user-friendly platform – NYC Funds Finder is where small businesses can review funding options, including loans and grants, and request free 1-on-1 financing assistance from the SBS team.  NYC Funds Finder is a partnership between SBS and Next Street and the Mastercard Center for Inclusive Growth. Next Street Scale, the platform that powers NYC Funds Finder, was created to address the hurdles that small businesses, especially those run by women and minorities, face in accessing the resources required to grow their business and build wealth.

M/WBE Certification Unlocking Opportunities The Bronx Chamber of Commerce is proud to partner with NYC SBS to help guide you through the application process of getting certified as a Minority/Woman-Owned Business Enterprise (M/WBE). This certification program, offered by NYC Small Business Services, is a critical initiative aimed at promoting diversity and inclusion in government contracting and procurement processes. The program seeks to create opportunities for businesses owned and operated by minority individuals and women, ensuring they have fair access to government contracts and economic opportunities, opens your business up to increased opportunities from New York City agencies, free advertising in the NYC Online Directory of Certified Businesses, mentorship programs and workshops, networking events, and more. The City has committed to awarding $16 billion in contracts to M/WBE certified organizations over the next decade--don’t miss out! Are you eligible? (Qualification checklist below)   Business is legally authorized to transact business in New York City   Business has been in operation for at least one year   Business is more than 51% minority and/or woman owned

JOB OPPORTUNITIES IN THE BRONX Seeking a candidate to work alongside Owner and Broker of Commercial Real Estate Company to provide general administrative assistance. We are searching for an individual with an outgoing personality who is comfortable interacting with Landlords/Owners and potential clients. We are asking candidate to work out of the office 2 days per week (preferably Tuesdays and Thursdays) between the hours of 10:00 am and 2:00 pm. For more information or to apply, Click Here For the complete Bronx Chamber Events Calendar, featuring educational workshops, networking events and other opportunities hosted by the Chamber, its members, & partners, please visit and bookmark our website events calendar link in your browser - new events are added weekly!