Russian Bankers Charged with Yacht & Property Violations

The Justice Department unsealed of an Indictment charging sanctioned Russian oligarch and the President and Chairman of a Russian state-owned VTB bank, Andrey Kostin, with participating in two separate schemes that violated U.S. sanctions.

In one scheme, Mr. 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  two superyachts, collectively worth over $135 million.

The other scheme charges Mr. Kostin, Vadim Wolfson and Gannon Bond, for their roles in providing goods, funds, and services related to a luxury home in Aspen, Colorado, including wiring Mr. Kostin approximately $12 million after he was sanctioned.

Mr. Wolfson a/k/a Vadim Stanislavovich Belyaev is founder and former chairman of Otkritie Bank, once the largest privately held financial group in Russia, now 100% owned by VTB.

Mr. Wolfon and Mr. Bond  were arrested Thursday morning in Austin, Texas, and Edgewater, New Jersey, respectively, and will be presented in federal courts in Texas and New York today. Mr. Kostin remains at large and is believed to be in Russia.

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."

As alleged in the Indictment

Mr. 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.

From at least on or about April 6, 2018, through at least on or about March 2, 2022, Mr. Kostin and others, 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 Mr. Kostin'sbenefit. Mr. Kostin also engaged in a scheme to commit money laundering to promote IEEPA violations.

Before and after OFAC sanctioned Mr. 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 Mr. Kostin . 

Mr. 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 Mr. Kostin and without an OFAC license, which is required to transact with an SDN. In causing these U.S. dollar payments to be made, Mr. Kostin and others also committed international money laundering.

Mr. 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, Messrs. Kostin, Wolfson, Bond and others participated in a scheme to violate IEEPA by providing funds, goods, and services for the benefit of Mr. 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, Mr. Kostin and his conspirators schemed to operate, maintain, and improve KOSTIN’s Aspen residence in a manner designed to conceal Mr. Kostin continued ownership of this luxury asset. In addition, in or about September 2019, Messrs. Kostin, Wolfson, Bond and others committed additional sanctions violations by dealing in and transferring Mr. Kostin's  blocked property. Specifically, the conspirators arranged to sell the Aspen home and provide Mr. 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.