The calls came from New York and Miami, two glamorous regions popular with wealthy Russians, in a possible indication of what could become the brisk sale of luxury homes, beachfront properties and condos on city skylines as Russians scramble to pre-empt international sanctions.
“People like that call them,” Elliott said of the Russian owners. They asked, “If I’m going to sell, how fast will this sell and how fast will it sell?”
“How the sensors come out is interesting,” he noted. “Maybe this is the beginning of the stampede.”
The impact of coordinated sanctions by the US, UK and EU has sent shockwaves through the Russian elite as the oligarchy, some targeted and others taking steps in anticipation of what could happen, looking to move yachts, dispose of assets and adapt to a wave of sanctions that came faster than usual. And it became wider than before.
“This is a very worrying moment if you are a Russian billionaire,” said Max Bergmann, a former State Department official. “Lawyers are busy now, trying to figure out how to write off oligarchs from the boards of various companies and how to divest assets in the United States.”
“We get a new investigation every hour,” said Eric Ferrari, a lawyer who represents foreign companies and individuals in dealing with sanctions. “The phone was ringing without contact with people all over the world who had been sanctioned or their parent company had been sanctioned.”
Ferrari said financial institutions in jurisdictions where there are no sanctions, such as the United Arab Emirates, are following the lead of the United States and the European Union and freezing accounts held by Russians. Ferrari added that some Caribbean countries – where Russian-controlled entities have set up secret foreign business – will no longer act as secretariats for such entities, leaving many unable to operate.
“I don’t remember the international sanctions program that made everyone scramble,” Ferrari said.
Bergmann remarked, “This caused a sudden panic, because the old guard class, I think, interesting enough, did not know that this [invasion] He was coming, and I think they were surprised that (Russian President) Vladimir Putin decided to invade eventually.”
Bergman explained that the oligarchy could eventually sue to try to stop the sanctions, but in the short term, these Russian billionaires are selling and shipping.
“What you really see is that oligarchs are afraid of this and are moving their yachts to places where they can’t be handed over,” Bergman said. “We have seen yachts begin to sail to Montenegro, where there is no extradition treaty.”
“We will spare no effort in our efforts to investigate, arrest and prosecute those whose criminal acts enable the Russian government to continue this unjust war,” Attorney General Merrick Garland said when announcing the new task force.
Experts monitoring the efforts unfolding across several government agencies – the Treasury Department and Justice at the fore – believe the scale of coordination is unprecedented and signal a determination to go after these oligarchs and any illegal activities with renewed vigor.
“It would take a great deal of prosecution and organization to impose sanctions on extraordinarily wealthy individuals who have a lot of resources,” said Edward Fishman, a former official on Russia sanctions at the US State Department. “By setting up this high-level task force that is clearly being overseen by some of the top officials in the Biden administration, I think this indicates that they are going to impose these sanctions with great force.”
Many oligarchs use shell companies that protect their property, leaving the authorities to dismantle a layer of companies before the true owner is discovered.
“Part of the reason we don’t see a lot of legal action is that these few are very rich, and even though many are committing white-collar crime, they hire really expensive lawyers to do things right,” said Bergman, the former State Department official.
“What the oligarchy did was just make it not worth the law enforcement time to go after them,” Bergman said. “And what Biden said is no, no, no, we’re going to take time and we’re going to allocate assets, we’re going to devote people to really start opening books, knocking on doors, and seeing what we find.”
Experts warn that this crackdown may eventually cause unrest within Russia. “One of the problems Putin has is that he has a very angry class of rich and powerful people who are all going back to Moscow and Saint Petersburg, and they don’t want to be there,” Bergman said.
One potential vulnerability of Russians in the United States is the millions of dollars that Russian oligarchs have poured into properties in New York, Miami, and elsewhere.
Rich Russians are smart, said Elliott, of Nest Seekers International and predicted, “There will be a liquidation of these people because they are smart. They will put it at least 20% below the market price because at the end of the day 80% of something is better than…nothing.” “.
Time is of the essence for some Russians who are currently not sanctioned but may be anxious about being next.
“As of today, there is nothing illegal in liquidating your assets,” Elliott said.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”