One of the companies in the network, Netherfield, was involved in a complicated offshore transaction that raised $50 million for a company controlled by Igor Shuvalov, one of Putin’s key advisers. The deal is report in the Barrons in 2011. The story does not name Abramovich as the owner of Netherfield, but State Street investigators eventually discovered that it belonged to him. State Street investigators found that in the months after the story was released, Netherfield closed and its investments moved to a start-up in the British Virgin Islands.
The cash used for the network’s investments came from accounts at a small merchant bank in Austria called Kathrein. But when several investor accounts were set up, Kathrein did not name Abramovich as the ultimate owner of the funds on any of the documents. Kathrein did not comment for this story, citing Austrian banking secrecy laws.
A company called Concord Management appears to have been formed to oversee the investments. However, State Street has had trouble finding basic details about Concord – including whether it even exists.
They wrote in a suspicious activity report. “Some individuals known as contacts have a limited presence on the Internet.”
“Also, the address provided for CONCORD… is a commercial office park.”
In a statement sent to BuzzFeed News, a spokesperson for Concord Management said the company “provides in-depth, independent third-party research and oversight of investments, but does not invest in any funds.” “.
Ultimately, State Street investigators reported Abramovich, his offshore companies, Concord Management and Kathrein Bank to the Treasury Department for suspicious activity in December 2015.
They also note that Och-Ziff and several other US hedge funds, including BlackRock, have included Abramovich’s foreign companies among their clients. State Street does not name those funds for suspicious or criminal activity, and there is no evidence that they acted against any financial regulation or law.
Representatives for BlackRock and Och-Ziff, now renamed Sculptor Capital Management, declined to comment on Abramovich. A spokesperson said: “BlackRock has a strong compliance program, complies with all applicable regulations, and takes the necessary steps to ensure compliance with relevant sanctions. No fund has commented on whether Abramovich is still a client, although several US investment firms frozen his cash.
An employee at the fund that worked with Abramovich said that all transactions were legal at the time and that Abramovich’s investment in the US was no secret in the financial world. “People know who Concord is and they know he’s a part of it, and there may be cases where his name is on the papers,” the employee said. “There’s a dynamic that makes him toxic in some people’s minds.”
In March 2016 State Street followed with a series of additional suspicious activity reports that provided further insight into the bank’s ongoing investigation. The bank said it had halted some transactions related to Abramovich’s overseas network until investigators received documents showing how the companies were linked to Abramovich. The bank has asked Abramovich’s advisers in the UK for paperwork detailing how he owns companies.
When those documents arrived, the money kept flowing. Investigators watched as Abramovich restructured his investments in new companies owned by a foreign trust that, they said, “allowed the RA to anonymously own/control the entities body”. The bank said it is concerned that the moves “further widen the gap between RA as a source of wealth and as a beneficiary of assets”.
In the UK, Abramovich’s assets are now frozen. His properties, including a £125m mansion in Kensington Palace Gardens, are in limbo.
Chelsea Football Club, too, must operate under tight government control to ensure Abramovich does not receive revenue from the club. Season ticket holders can still attend matches, but the club is not allowed to sell any new tickets. Its millionaire soccer stars may have to stay in budget hotels for away matches. Business owners around the world are lining up to bid for Chelsea, once Abramovich’s most prized Western asset. The UK government has reported that the proceeds of any sale will not go to Abramovich.
When or how American authorities might act is unclear. Political pressure is growing: Last week, three Democrats in Congress appointed a alphabet President Joe Biden urged him to punish Abramovich, saying “US sanctions against Abramovich are conspicuous by their absence.”
“I’m not sure why the US hasn’t taken action yet,” Representative Steve Cohen, a Democrat from Tennessee, told BuzzFeed News. “I understand that we may need to act together with our allies, but in this case we appear to have been late.”
Abramovich used to be a familiar figure in the director’s chair at Chelsea, but it is currently unclear where the mysterious tycoon is. He was last seen in the luxury lounge of Ben Gurion airport in Tel Aviv with a mask on his chin. He reported fly to Turkey, or maybe Moscow. ●