By: David Lally
Task Force KleptoCapture is a new interagency law enforcement task force, created by the United States Justice Department. The task force was formed in an effort to enforce the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed in response to Russia’s unprovoked military invasion of Ukraine. The sanctions ordered against the Russian Federation seek to isolate the country from global markets, imposing serious costs on the people of Russia for the country’s unjustified acts of war. By targeting Russian officials, government-aligned elites, and Russian financial institutions, the United States and its allies hope that their freeze on trillions of dollars in assets controlled by Moscow and its oligarchs will push President Putin to withdraw from Ukraine.
In a statement given Wednesday, March 2, 2022, Merrick B. Garland, the current Attorney General, promised that “[t]he Justice Department will use all of its authorities to seize the assets of individuals and entities who violate these sanctions.” Stating further, “[w]e will leave no stone unturned in our efforts to investigate, arrest, and prosecute those whose criminal acts enable the Russian government to continue this unjust war. Let me be clear: if you violate our laws, we will hold you accountable.” Task Force KleptoCapture will be run out of the Office of the Deputy Attorney General and staffed with prosecutors, agents, analysts, and professional staff across the Department of Justice (“DOJ”), who are experts in sanctions and export control enforcement, anti-corruption, asset forfeiture, anti-money laundering, tax enforcement, national security investigations, and foreign evidence collection.
Andrew Adams, a veteran federal prosecutor in New York City, has also been assigned to the task force in a leadership position, having experience handling cases involving Russian organized crime groups. Adams has a “long and successful track record of investigating Russian organized crime and recovering illicit assets,” according to the DOJ. In 2015, Adams led a team that successfully recovered a rare Stradivarius violin that was stolen in 1980. In 2018, he led the prosecution of Razhden Shulaya, leader of the Russian organized crime group who was accused of running a crime syndicate that engaged in extortion, fraud, theft, and trafficking in stolen goods. Adams has also served as Deputy Chief of the Southern District of New York’s Money Laundering and Asset Forfeiture Unit until 2018, where he also had a hand in some of New York City’s biggest fine art-related cases in recent years. This experience could prove invaluable as global authorities go after Russian elites known to park wealth in alternative assets like real estate, jewelry, and art.
The announcement of the task force comes as the Biden administration is preparing another package of sanctions against more Russian oligarchs, according to a person familiar with the plans. President Biden issued a warning to Russian oligarchs in his State of the Union address on Tuesday night, in which he declared that the administration was “joining with European allies to find and seize their yachts, their luxury apartments, their private jets.” The Biden administration has penalized several Russian entities, including the country’s main development and military banks, one of its sovereign wealth funds, and a subsidiary of the state-controlled energy giant Gazprom. It has sought to freeze Mr. Putin’s assets as well as those of his foreign minister, Sergey V. Lavrov, and other Russian national security officials. It has also curbed purchases of Russian sovereign bonds, barred some Russian banks from Western financial markets, and cut off Russia’s access to certain foreign technology products. But how are these sanctions different from sanctions the United States has imposed on Russia in the past?
For starters, these sanctions, unlike ones of the past against the Russian government, seek to punish Russia’s elites for supporting President Vladimir Putin. Billionaire industrialist Oleg Deripaska and Mikhail Fridman, a founder of Russia’s largest private bank, both urged an end to Putin’s war, which was viewed as a startling break in ranks among the country’s elites amongst Western nations. “Deripaska is on the U.S. sanctions list; Fridman is on the EU’s. Even those who have not yet faced individual sanctions appear to be feeling pressure.” Another billionaire businessman and close associate of Putin’s, Roman Abramovich, has put his British soccer club, Chelsea Football Club, a Premier League powerhouse, up for sale and vowed to donate the proceeds to “all victims of the war in Ukraine.” If figures like these are calling for, even demanding, an end to the war, the sanctions are far more effective than past efforts by Western powers to target the Russian elite. The oligarchs play essential roles in Putin’s Russia as they provide public support for the regime, lead key companies and institutions, and distract attention from and, by some accounts, help conceal the president’s own enormous wealth. Exactly how much power these elites exercise over Putin is a matter of debate, as some critics have argued that sanctions are designed only to make Western countries feel good, but the wealthiest Russians are far better placed than the average citizen to communicate to Putin how his invasion is devastating his own country. It is unclear how successful the Justice Department will be in ending the war in Ukraine by pursuing these wealthy oligarchs, but the department typically establishes task forces in an effort to underline its priorities.
Student Bio: David Lally is a second-year law student at Suffolk University Law School and a staffer on the Journal of High Technology Law. David received his bachelor’s degree from the University of New Hampshire in History and Justice Studies.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
