U.S. charges head of Russian bank with sanctions evasion, arrests 2 in alleged money laundering scheme

Washington — The long-time president and chairman of a state-owned Russian bank was indicted in New York for allegedly evading U.S. law by owning and controlling assets including two superyachts and a luxury home in Aspen, Colorado, according to unsealed court documents.

Andrey Kostin — a wealthy oligarch who has led Russia's VTB Bank since 2002, and was sanctioned by the U.S. in 2018 — and two U.S.-based co-conspirators are accused of using shell companies and laundering money to help Kostin profit from his assets, worth more than $135 million. The oligarch's alleged facilitators — Vadim Wolfson of Austin, Texas, and Gannon Bond of Edgewater, New Jersey — were arrested on Tuesday. 

The trio is accused of renovating and selling Kostin's Aspen home for millions of dollars in profit and using U.S. currency to maintain his two superyachts, named Sea Rhapsody and Sea & Us, all while Kostin was barred from the U.S. financial system.

Kostin remains at large. Unlike his alleged co-conspirators, he is unlikely to ever face the charges against him in an American courtroom. But U.S. officials said Thursday that the case is illustrative of the Justice Department's ongoing efforts to use U.S. law to counter Russia's invasion of Ukraine as the war enters its third year.

The Justice Department's "Task Force KleptoCapture" is a centralized operation targeting Russian financial assets. The goal is to take down the business people who are helping to fund the war and bar wealthy oligarchs from accessing goods and services in the West, the officials 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," Attorney General Merrick Garland said in a statement on Thursday.

So far, the task force has brought charges against 70 people, 33 of whom have been arrested worldwide. Investigators are also working to seize over $700 million in assets to transfer to Ukraine to bolster its war effort. Only $6 million of those assets has actually been transferred to Kyiv, since U.S. law allows for extensive litigation before the government can seize private goods and prove their links to criminal enterprises.

Bringing charges against those accused of violating sanctions and seizing valuable assets is a time-consuming process that U.S. officials said relies on international cooperation and novel applications of law.

On Thursday, Feliks Medvedev, a Russian national living in Georgia, pleaded guilty to transferring more than $150 million of foreign funds into the U.S. He admitted to operating an illegal money-transmitting business and using some of the money to purchase more than $65 million in gold bullion from Singapore, according to prosecutors. At least four other defendants charged in conjunction with Task Force KleptoCapture have pleaded guilty in U.S. courts across the country, the Justice Department said.

Justice Department and FBI officials said the department's response to Russia's invasion of Ukraine demonstrates the challenges of using U.S. law to address an international crisis, since getting money out of banks and bringing alleged criminals to the U.S. remains complex and time-consuming.

Looking forward, officials said they will continue to focus on the lawyers, money managers and facilitators in the U.S. who help oligarchs evade sanctions.