Russian Oligarch Charged with Violating US Sanctions
United States prosecutors indicted a Russian oligarch for violating sanctions imposed against him in 2014 over his support for the Russian occupation of Donetsk, according to a press release from the Department of Justice.
To avoid those sanctions, Konstantin Malofeyev allegedly hired American national Jack Hanick to assist him in operating television networks in Russia and Greece, and to acquire another network in Bulgaria. Additionally, Malofeyev conspired with Hannick to transfer a US$10 million investment he made in a U.S. bank to a business associate in Greece.
Hanick, 71, has been charged in March with violations of U.S. sanctions and false statements in connection with his years-long work for Malofeyev.
“Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine,” said U.S. Attorney Damian Williams for the Southern District of New York. OFAC is the Office of Foreign Assets Control, a financial intelligence and enforcement agency of the U.S. Treasury Department.
In an affidavit released by the New York Southern District court, Malofeyev was added to the U.S sanctions list on December 19, 2014 after Russia invaded Ukraine. Back then, a special Presidential order - Executive Order 13660 - blocked all property and interest in property from a list of sanctioned individuals who were affiliated with fuelling the violence.
“Kremlin-linked Russian oligarch Konstantin Malofeyev played a leading role in supporting Russia’s 2014 invasion of eastern Ukraine, continues to run a pro-Putin propaganda network, and recently described Russia’s 2022 military invasion of Ukraine as a ‘holy war,’” said Assistant Director Michael J. Driscoll of the FBI’s New York Field Office.
Malofeyev hired Hanick in 2013 to launch a new Russian cable news network - the Russian TV Network. Emails show back-and-forth conversations between the two, including negotiations on terms of employment, payment, and a Russian visa for Hanick, the statement said.
Hanick allegedly moved to Russia in July 2013 after signing a contract with Malofeyev and agreeing to a housing allowance in Moscow, health insurance, and a full-time salary. He was paid by two separate Russian entities owned by Malofeyev until the end of 2018, prosecutors claim.
Between 2015 and 2016, Hanick is believed to have traveled to Greece and Bulgaria on numerous occasions at Malofeyev’s direction to begin establishing a Greek television network, and attempted to acquire a Bulgarian television network. At one point Malofeyev instructed Hanick to conceal his involvement in the acquisition of the television deals by channeling negotiations through a third party associate, listed in the affidavit as the Greek Business Associate.
“According to the indictment, the defendant [Malofeyev] used shell companies and other means to hide his deceptions and evade important sanctions meant to ensure the territorial integrity of Ukraine,” said Assistant Director Alan E. Kohler Jr. from the FBI’s Counterintelligence Division. “While this case is about violating sanctions, it’s also about bringing people to justice who think they can violate our laws with impunity.”
Hanick is suspected of having helped transfer to the Greek business associate a shell company which Malofeyev used to invest $10 million in a Texas-based bank holding company.
The sale and purchase agreement had been signed in June 2015 but had been fraudulently backdated to July 2014, prior to the imposed U.S. sanctions against him. It sold the shell company to the Greek business associate for one dollar.
If found guilty of violating the two sanction evasion charges, Malofeyev may face up to 40 years in prison.