Treasury blocks $1 billion in Delaware trust tied to Russian oligarch

By Jennifer Hansler, CNN

The US Treasury on Thursday notified a Delaware-based trust that it is blocking $1 billion in assets for its connection to sanctioned Russian oligarch Suleiman Kerimov.

According to a press release from the agency, Heritage Trust “was formed in July 2017 for the purpose of holding and managing Kerimov’s US-based assets.” Kerimov was sanctioned in April 2018.

“Kerimov has retained a property interest in Heritage Trust following his designation, which results in Heritage Trust being blocked,” the Treasury Department said.

Thursday’s action comes as the United States and its partners have sought to aggressively clamp down on sanctions evasions in the wake of Russia’s war in Ukraine and ratchet up the cost to Moscow for continuing the conflict.

According to a news release from the Treasury Department, the Russian Elites, Proxies, and Oligarchs (REPO) Task Force — a multilateral group comprised of the US and allies — blocked or froze “more than $30 billion worth of sanctioned Russians’ assets” and “Immobilized about $300 billion worth of Russian Central Bank assets” in its first 100 days.

In May, Kerimov’s $300 million yacht in Fiji was seized at the request of the US.

Heritage Trust’s assets were blocked after an investigation “revealed that Kerimov used a complex series of legal structures and front persons to obscure his interest in Heritage Trust, the funds of which first entered the US financial system through two foreign Kerimov-controlled entities prior to the imposition of sanctions against him,” the Treasury Department said Thursday.

“The funds were subsequently invested in large public and private US companies and managed by a series of US investment firms and facilitators. Kerimov and his proxies used various layers of US and non-US shell companies to hold formal title to assets and to conduct transactions in a manner that concealed his interest,” it said.

In addition to Heritage Trust’s connection to Kerimov, the Treasury Department said Thursday that his nephew, Ruslan Gadzhiyevich Gadzhiyev — who was sanctioned in March — is a beneficiary of the trust, “and his continuing property interest in Heritage Trust provides a separate and independent basis for Heritage Trust to be blocked.”

“Treasury continues using the full range of our tools to expose and disrupt those who seek to evade our sanctions and hide their ill-gotten gains,” Treasury Secretary Janet Yellen said in a statement. “Even as Russian elites hide behind proxies and complex legal arrangements, Treasury will use our broad enforcement authorities, as well as our partnerships through the REPO Task Force, to actively implement the multilaterally coordinated sanctions imposed on those who fund and benefit from Russia’s war against Ukraine.”

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