Netherfield, one of the companies in the network, was involved in a complex offshore deal that raised $50 million for a company controlled by Igor Shuvalov, one of Putin’s key advisers. The deal was reported to the Barrons in 2011. The story did not say Abramovich was the owner of Netherfield, but State Street investigators eventually found that it belonged to him. State Street investigators found that in the months after the story was published, Netherfield was closed, and its investments transferred to a newly formed company in the British Virgin Islands.
Cash used for network investments came from accounts at a small commercial bank in Austria called Katherine. But when some investor accounts were created, Catherine did not mention Abramovich’s name as the ultimate owner of the funds in any documents. Catherine did not comment on this story, citing Austrian banking secrecy laws.
It appears that a company called Concord Management has been set up to oversee the investments. However, the State Street Company had a hard time finding key details about Concord – including whether it actually existed.
In one suspicious activity report, they wrote that investigators “were unable to identify or verify the existence of CONCORD and that the entity had a non-functional website.” “Many of the individuals listed as contacts have a limited online presence.”
“In addition, the address given to CONCORD … is a commercial office complex.”
In a statement sent to BuzzFeed News, a Concord Management spokesperson said the company “provides independent third-party research, diligence and oversight of investments, but does not invest any money.”
In the end, State Street investigators reported Abramovich, his offshore companies, Concord Management, and Catherine Bank to the Treasury Department for suspicious activity in December 2015.
They also note that Och-Ziff and several other US investment funds, including BlackRock, have counted Abramovich’s offshore companies among their clients. State Street has not named those funds for suspicious or criminal activity, and there is no evidence that they acted against any financial regulations or laws.
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 steps to ensure relevant sanctions are adhered to. None of the funds has commented on whether Abramovich is still a client, although some US investment firms have frozen his funds.
An employee of a fund who worked with Abramovich said that all transactions were legal at the time, and that it was no secret in financial circles that Abramovich was investing in the United States. “People knew who Concorde was and knew he was a part of it, and there may be cases where his name is written on the papers,” the employee said. “There is a dynamic where it is retroactively toxic in some people’s minds.”
In March 2016, State Street followed up with a series of additional suspicious activity reports providing more details about the bank’s ongoing investigation. The bank said it halted a number of 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 UK advisers for papers detailing how he owns companies.
Once these documents arrived, the money continued to flow. Investigators watched as Abramovich restructured his investments in new companies owned by an external trust they wrote that “allows RA to own/control entities anonymously.” The bank said it was concerned that the moves “further 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 the gardens of Kensington Palace, are in limbo.
So too is Chelsea Football Club, which has to operate under strict government controls 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. Millionaire soccer stars may have to stay in budget hotels for outdoor matches. Business owners around the world are arranging bids to buy Chelsea, once Abramovich’s most valuable Western asset. The UK government has reportedly said that the proceeds from any sale will not go to Abramovich.
It remains unclear when and how the US authorities will act. Political pressure mounts: Last week, three congressional Democrats sent a letter to President Joe Biden urging him to punish Abramovich, saying that “US sanctions against Abramovich are evident in their absence.”
“I’m not sure why the United States has not acted yet,” Representative Steve Cohen, a Democrat from Tennessee, told BuzzFeed News. “I understand that we may need to work in coordination with our allies, but in this case it appears we are late to the negotiating table.”
Meanwhile, Abramovich’s mobile assets moved farther west. His yachts left European ports for the open sea, and his planes flew to Russia and Istanbul.
Abramovich was once a familiar figure in the directors’ box at Chelsea, but at the moment it’s unclear where the mysterious oligarch is. He was last seen in the plush lounge at Tel Aviv’s Ben Gurion Airport with a mask on his chin. He has reportedly traveled to Turkey, or possibly to Moscow. ●