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One of the companies in the network, Netherfield, was involved in a complex offshore transaction that generated $50 million for a company controlled by Igor Shuvalov, one of Putin’s top advisers. The deal was reported in Barrons in 2011. The story did not name Abramovich as the owner of Netherfield, but State Street investigators eventually discovered that he did. In the month after the story ran, Netherfield was closed, and the investment was transferred to a newly formed company in the British Virgin Islands, found State Street investigators.
The cash used for the network’s investment comes from an account at a small commercial bank in Austria called Kathrein. But when several investor accounts were created, Kathrein did not name Abramovich as the main owner of the money in any documentation. Kathrein did not comment for this story, citing Austrian bank secrecy laws.
A company called Concord Management appears to have been set up to oversee the investment. But State Street is having trouble finding basic details about Concord — including whether it even exists.
Investigators “were unable to identify or verify the existence of CONCORD and the entity has a non-functional website,” he wrote in one suspicious activity report. “Several of the individuals named as contacts have a limited internet presence.”
“In addition, the address provided for CONCORD … is a commercial office park.”
In a statement sent to BuzzFeed News, a spokesperson for Concord Management said the company “provides third-party research, due diligence and investment monitoring, but does not invest in any funds.”
Ultimately, State Street investigators reported Abramovich, his offshore company, Concord Management, and Kathrein Bank to the Treasury for suspicious activity in December 2015.
He also noted that Och-Ziff and several other American investment funds, including BlackRock, have counted Abramovich’s offshore company among their clients. State Street has not cited the funds for suspicious or criminal activity, and there is no evidence that they acted against financial regulations or laws.
Representatives for BlackRock and Och-Ziff, now renamed Sculptor Capital Management, declined to comment on Abramovich. “BlackRock has a robust compliance program, complies with all applicable regulations, and takes the necessary steps to ensure compliance with appropriate sanctions,” a spokesperson said. Neither fund has commented on whether Abramovich remains a client, although several US investment firms have frozen their cash.
One employee of the fund who worked with Abramovich said that all transactions were legal at the time, and it was no secret in financial circles that Abramovich invested in the US. “People know who Concord is and they know they’re part of it, and there may be cases where their names are on the documents,” the employee said. “There’s a dynamic where they become toxic retroactively in some people’s minds.”
In March 2016 State Street followed up with a series of additional suspicious activity reports that provided more details about the bank’s investigation. The bank said it had halted some transactions linked to Abramovich’s offshore network until investigators had received documents showing how the company was linked to Abramovich. The bank has asked Abramovich’s advisers in the UK for documents detailing how he owns the company.
Once these documents arrive, the money continues to flow. Investigators watched as Abramovich restructured his investment into a new company owned by an offshore trust that, they wrote, “allowed RA to anonymously own/control entities.” The bank said it was concerned that the move would “further distance the RA as the source of wealth and the beneficiary of these assets.”
In the UK, Abramovich’s assets are currently frozen. Those properties, including a £125 million mansion in Kensington Palace Gardens, are in limbo.
So is Chelsea Football Club, which must operate under strict government control to ensure Abramovich does not receive revenue from the club. Season ticket holders can still attend games, but clubs are not allowed to sell new tickets. Millionaire football stars may have to stay in budget hotels for away games. Business owners around the world are bidding for Chelsea, once Abramovich’s most prized Western asset. The British government reportedly said the proceeds of any sale would not go to Abramovich.
When or how American authorities will act remains unclear. Political pressure is mounting: Last week, three Democrats in Congress sent a letter to President Joe Biden calling for sanctions against Abramovich, saying that “US sanctions against Abramovich are conspicuous by their absence.”
“I’m not sure why the U.S. hasn’t acted,” said Rep. Steve Cohen, Democrat of Tennessee, BuzzFeed News. “I know we need to act together with our allies, but in this case we seem to be late to the table.”
Meanwhile, Abramovich’s more mobile assets have moved out West. His yachts have left European ports for the open sea, and jets have flown to Russia and Istanbul.
Abramovich was once a familiar figure in the director’s box at Chelsea, but now it is unclear where the enigmatic oligarch is. He was last seen in the luxury lounge of Ben Gurion Airport in Tel Aviv with a mask on his chin. He reportedly flew to Turkey, or possibly Moscow. ●
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