One of the companies in the network, Netherfield, was involved in a complex offshore transaction that raised $50 million for a company controlled by Igor Shuvalov, one of Putin’s top advisers. The deal was reported in Barron’s in 2011. The story didn’t name Abramovich as Netherfield’s owner, but State Street investigators eventually found it was him. In the months since the story ran, Netherfield was shut down and its investments transferred to a newly formed company in the British Virgin Islands, State Street investigators found.
The cash used to fund the network came from accounts at a small commercial bank in Austria, Kathrein. But while some investor accounts were established, Catherine Abramovich was not named as the ultimate owner of the funds in any documentation. Catherine did not comment for this story, citing Austrian bank secrecy laws.
A firm called Concorde Management was set up to oversee the investments. Yet State Street had trouble finding basic details about Concorde — including whether it even existed.
Investigators were “unable to identify or verify the existence of CONCORD and the entity has a non-functional website,” they wrote in a suspicious activity report. “Several individuals named as contacts have limited Internet presence.”
“Additionally, the address provided for CONCORD is a commercial office park.”
In a statement sent to BuzzFeed News, a spokesperson for Concorde Management said the company “provides independent third-party research, due diligence and monitoring of investments, but does not invest in any funds.”
Ultimately, State Street investigators reported Abramovich, his offshore companies, Concord Management and Catherine Bank to the Treasury for suspicious activity in December 2015.
He noted that several other American investment funds, including Ochs-Ziff and BlackRock, count Abramovich’s offshore companies among their clients. State Street did not name those funds for suspicious or criminal activity, and there is no evidence that they ran afoul of any financial regulations or laws.
Representatives for BlackRock and Ochs-Ziff, now renamed Sculptor Capital Management, declined to comment on Abramovich. “BlackRock has a robust compliance program, adheres to all applicable regulations and takes the necessary steps to ensure compliance with relevant sanctions,” the spokesperson said. None of the funds would comment on whether Abramovich remained a client, although some US investment companies have frozen their funds.
An employee at one of the funds who worked with Abramovich said at the time that all the transactions were legal and that Abramovich was investing in the US was not a secret in financial circles. “People knew who Concord was and they knew they were a part of it, and there may have been times when their names were on the records,” the employee said. “There’s a dynamic in some people’s minds that he’s a former poisoner.”
A series of additional suspicious activity reports followed in March 2016, providing more details about the ongoing investigation of State Street Bank. The bank said it had frozen several transactions linked to Abramovich’s offshore network until investigators received documents showing how the companies were linked to Abramovich. The bank was asking Abramovich’s advisers in the UK for documents detailing how he owned the companies.
After those documents arrived, the money flow continued. Investigators watched Abramovich restructure his investments into new companies owned by an offshore trust, which they wrote, “allows RA to own/control entities anonymously.” The bank is concerned that these measures will “further serve to alienate the RA as a source of wealth and beneficiary of assets”.
In the UK, Abramovich’s assets have now been frozen. His properties, including a £125 million mansion in Kensington Palace Gardens, are unstable.
Chelsea Football Club, too, will have to operate under tight government controls to ensure Abramovich does not siphon off income from the club. Season ticket holders can still attend games, but the club is not allowed to sell any new tickets. Its millionaire football stars may have to stay in budget hotels for away games. Business owners from around the world are submitting bids for Chelsea, once Abramovich’s most prized Western property. The UK government reported that none of the sale proceeds would go to Abramovich.
It remains unclear when or how American officials might act. Political pressure is mounting: Last week, three Democrats in Congress sent a letter to President Joe Biden urging him to sanction Abramovich, saying “US sanctions against Abramovich are conspicuous by his absence.”
“I’m not sure why the US hasn’t acted yet,” Rep. Steve Cohen, Democrat of Tennessee, told BuzzFeed News. “I understand that we may need to act together with our allies, but in this case we seem to be late to the table.”
Meanwhile, most of Abramovich’s mobile assets have moved away from the West. His yachts left European ports for the open sea and his jets flew to Russia and Istanbul.
Abramovich was once a familiar figure in the directors’ box at Chelsea, but it is unclear where the mysterious oligarch is at the moment. He was last seen with a mask over his chin in a luxury lounge at Tel Aviv’s Ben Gurion Airport. He reportedly flew to Turkey or Moscow. ●