The U.S.-based independent news outlet The San Francisco Standard traced the ways the financial services industry helped him do it in what it’s calling the “oligarch industrial complex.”
“Oligarch” is the term used to describe rich and politically connected figures, frequently from former Soviet states, who amassed fortunes in ways that don’t always bear scrutiny.
The sheer scale of their fortunes motivates lawyers, accountants, investment managers, bankers, agents and other experts to “turn a blind eye to where that money came from and to start bending the rules,” Nate Sibley, a research fellow with the Hudson Institute’s Kleptocracy Initiative, told The Standard.
While there may not be blood on the streets of San Francisco, Sibley said, the money flowing through San Francisco’s banks, real estate and companies comes from places where blood does run in the streets.
Experts say billionaires in countries plagued by corruption and weak legal systems dream of moving their money into U.S. jurisdictions, where it will benefit from the robust legal system. And so-called enablers, like these service providers, help them do it.
According to The Standard, a businessman named Pavel Cherkashin used the services of a Russian-born accountant based in San Francisco to set up the special-purpose companies holding Kerimov’s investments. When reporters reached the accountant by phone, he denied knowing Kerimov and declined further comment.
Cherkashin, on the other hand, told The Standard his work with Kerimov’s investments was perfectly legal.
That’s not the point, experts say: facilitating such money flows creates problems in the U.S.
Although the questionable sources of many oligarch fortunes are well known, some in Kerimov’s money network worked with a venture capital firm created to connect local startups with Russian investors.
The Standard said part of Kerimov’s $4 billion fortune was invested through a self-driving car technology startup called Luminar Technologies and the purchase of a defunct San Francisco church, which was turned into a business incubator instead of the homeless shelter previously planned for the site.
Kerimov’s nephew, Nariman Gadzhiev, worked on his uncle’s U.S. investments. He told The Standard that Luminar knew whom they were dealing with, and that the company’s founder, Austin Russell, met personally with Kerimov. Those meeting plans were corroborated by leaked documents, The Standard reported.
With the advent of the war in Ukraine, many countries have slapped sanctions on Russian President Vladmir Putin’s inner circle. Among other U.S. sanctions that hit Kerimov, the U.S. Treasury earlier this year froze his Bay Area investments—particularly the Luminar shares, which have markedly appreciated in value since 2016.
