Deputy Attorney General Lisa O. Monaco Delivers Remarks on Enforcement Actions to Disrupt and Prosecute Russian Criminal Activity
Washington, DC ~ Wednesday, April 6, 2022
Remarks as Delivered
Thank you, Mr. Attorney General, and good morning everyone thank you all for joining us today.
As the Attorney General said, we are here today because of actions the Department of Justice has taken today and in recent weeks — actions that make clear that the same Russian government struggling to defend its unprovoked and unjustified war in Ukraine is also corrupt at its core.
The world has watched with outrage as innocent Ukrainians continue to suffer at the hands of the Russian government. And for decades, the regime has been propped up by pervasive corruption.
The corruption starts at the top: with Vladimir Putin’s oligarch cronies who earned billions of dollars by committing crimes, often at the expense of the Russian people. The crimes of these billionaires in fact facilitate Russia’s unprovoked aggression — and fuel a life of luxury for a very few. The world watches in horror as Ukrainians are forced to flee their homes, schools and hospitals, and as they bury innocent civilians
Last month, the Attorney General asked me to establish a task force — Task Force KleptoCapture — to use the full range of the department’s authorities to hold accountable those oligarchs who enable the Russian regime, and to ensure that those same oligarchs feel the pain of the sanctions that have been levied on them in response to Russia’s aggression in Ukraine.
That task force has been hard at work.
Earlier this week, our law enforcement partners in Spain, acting on our request and pursuant to a warrant issued by a United States Court seized a $90 million yacht — named the Tango — belonging to sanctioned Russian oligarch Viktor Vekselberg. That yacht was subsequently searched by Spanish authorities, accompanied by agents of the FBI and Homeland Security Investigations.
Vekselberg was sanctioned in 2018 by the U.S Treasury Department as part of a suite of sanctions imposed in response to Russia’s invasion of Crimea. Mr. Vekselberg defied these sanctions to finance his luxury lifestyle, including making payments through U.S. banks for the support and maintenance of his yacht — a direct violation of the sanctions imposed on him.
In seizing the Tango, the department demonstrated our commitment to holding accountable corrupt Russian oligarchs — a commitment we are not finished honoring.
Today, charges have also been unsealed in the Southern District of New York against Konstantin Malofeyev, a Russian national and a Russian oligarch. Malofeyev is charged with conspiring to violate and violating United States sanctions. These are the first criminal charges brought by the Department of Justice against a Russian oligarch since Russia invaded Ukraine.
Mr. Malofeyev was designated as a result of the Crimea sanctions, which forbade him from conducting financial transactions with United States persons or with property in the United States. In the years since he was sanctioned, Mr. Malofeyev is alleged to have flagrantly and repeatedly violated the sanctions imposed on him while attempting to establish media companies across Europe, media companies that would help spread pro-Kremlin misinformation.
Mr. Malofeyev further violated U.S. sanctions in a scheme to transfer shares he owned in a Texas bank to a business associate in 2015. Today, in addition to the criminal charges filed against Mr. Malofeyev, we have seized that multi-million-dollar investment.
While the oligarchs provide some of the most ostentatious displays of Russian illicit finance, they are not the only ones whose financial misconduct is tied to Russia.
Yesterday, the Department of Justice disrupted the Hydra Market — the world’s largest and longest-running darknet marketplace.
At the same time, the Department of Justice brought criminal charges against Dmitry Pavlov, a resident of Russia, for his role in operating and administering the servers used to run Hydra. Our partners at the German Federal Criminal Police played a critical role in this operation and seized over $25 million in Bitcoin from Hydra.
And our partners at the Treasury Department announced sanctions on the cryptocurrency exchanges believed to have facilitated many of Hydra’s transactions.
As alleged, Hydra enabled users in mainly Russian-speaking countries to buy and sell a staggering variety of illicit goods and services, including illegal drugs, stolen financial information, fraudulent passports and even hacking tools and hacking services.
Transactions on Hydra were conducted in cryptocurrency, and last year, Hydra alone accounted for an estimated 80% of all darknet market-related cryptocurrency transactions. Since 2015, the marketplace has received approximately $5.2 billion in cryptocurrency.
Let me say that again – Hydra alone accounted for an estimated 80% of all darknet market transactions – more than $5 billion in cryptocurrency.
Working side by side with our German partners — whose assistance was critical to our efforts — as well as our law enforcement partners at the IRS and U.S. Postal Inspection Service here at home — the DEA and the FBI have ensured that cryptocurrency can no longer be used by these criminals to fuel their crimes.
Taken together, these actions make clear that those who violate our laws should expect to face justice.
As Russia and its aggression continues, we have our eyes on every yacht and jet, we have our eyes on every piece of art and real estate purchased with dirty money and on every bitcoin wallet filled with the proceeds of theft and other crimes. Together with our partners around the world, our goal is to ensure that sanctioned Russian oligarchs and cyber criminals will not find safe haven.
And now, I’ll turn it over to Director Wray to discuss another tool employed by the FBI to address Russia’s aggression.