It has been reported today in the Yachting press that the United States Department of Justice charged Richard Masters, a well known figure in the yacht industry, and Vladislav Osipov, a Russian businessman, with conspiracy to defraud and to commit offences against the United States through money laundering and violating the International Emergency Economic Powers Act (IEEPA).

It is understood that the charges relate to the 77m superyacht named ‘Tango’ reportedly worth $90 million and that belongs to sanctioned Russian oligarch Viktor Vekselberg. Masters was arrested on Friday in Madrid and taken for questioning. The US had requested Masters be extradited immediately but it is reported that the National Court released him on bail having confiscated his passport. 

According to the indictment (https://www.justice.gov/opa/press-release/file/1563251/download ), despite U.S. sanctions issued against Vekselberg in April 2018, Osipov and Masters allegedly advised, enabled and facilitated the ongoing operation of Tango through a web of shell companies and the U.S. financial system. They attempted to obscure Vekselberg’s involvement in the vessel. Spanish law enforcement executed a Spanish court order freezing Tango until April 4, 2022.

Masters apparently used a false name “Fanta” and opaque reference numbers on invoices and other payment documents to try and hide transactions from financial institutions. This resulted in the U.S. financial institutions processing hundreds of thousands of dollars of transactions for Tango that they otherwise would not have allowed if they had known of Vekselberg’s involvement in the transaction. 

Also it is reported that Osipov and Masters advised and enabled Tango employees to continue conducting business with numerous U.S. companies, using methods such as payments in other currencies or through third parties. 

These arrests and the investigation demonstrate that the FBI are not letting up their pursuit of anyone who is dealing with any high net-worth sanctioned Russian individuals. “Today’s indictments and the arrest executed by Spanish law enforcement demonstrate the FBI’s continued focus on tracking down and holding accountable those who assist sanctioned Russian oligarchs,” said FBI Deputy Director Paul Abbate.

See here for the United States Justice Departments announcement - https://www.justice.gov/opa/pr/arrest-and-criminal-charges-announced-against-british-and-russian-businessmen-facilitating   

We, in the yacht sphere, deal with high net worth individuals all the time. The Client Due Diligence checks become increasingly onerous as the years go by, but this case appears to be much more than just carelessness or oversight. 

We continue to advise our clients, guiding them through the various sanctions and ever-changing regulations but they can be difficult to navigate. In the meantime we will follow this in the Press but please do remember that these are currently allegations and all defendants are presumed innocent until proven guilty. Watch this space!