Justice Dept. Charges Russian Oligarch With Violating Sanctions

on Apr7
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WASHINGTON — The Justice Department said on Wednesday that it had charged a Russian oligarch with violating U.S. sanctions and unveiled additional measures intended to counter Russian money laundering and disrupt online criminal networks in an effort to enforce financial penalties on Moscow.

The moves came as the United States has ratcheted up pressure on the Kremlin and some of the wealthiest Russians in light of growing evidence of atrocities in Ukraine and as Attorney General Merrick B. Garland said the United States was helping its European partners investigate potential war crimes.

The oligarch, Konstantin Malofeev, 47, is widely considered one of Russia’s most influential business moguls — he is said to have deep ties to President Vladimir V. Putin — and is among the more prominent conservatives in the country’s Kremlin-allied elite. (The indictment renders his surname as Malofeyev.)

The actions demonstrated the reach of a task force created last month to find and seize the assets of wealthy Russians who violate U.S. sanctions on Russia, and the penalties appeared meant to enforce the far-reaching economic sanctions that the United States has imposed along with European allies.

Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement on Wednesday that the sanctions barred Mr. Malofeev from paying or receiving services from American citizens, or from conducting transactions with his property in the United States.

“He systematically flouted those restrictions for years,” Mr. Williams said.

Mr. Malofeev, who is believed to be in Russia, remains at large, the Justice Department said. Mr. Garland said the department had seized “millions of dollars” from a U.S. financial institution that are believed to trace back to Mr. Malofeev.

The Justice Department also said it was taking steps to counter nefarious activity online, including disrupting a bot network organized by the Russian government’s military intelligence agency.

Mr. Garland also announced the seizure of Hydra Market, a Russian-language darknet market that processed sales of drugs, forged passports and other documents, and stolen financial data. The department said that it believed the market accounted for 80 percent of cryptocurrency transactions on the dark web, and that roughly $5.2 billion in bitcoin and other cryptocurrencies had been seized with help from German authorities.

The announcement came in tandem with new sanctions imposed by the United States and its allies on Wednesday targeting some of Russia’s largest banks.

Zach Montague reported from Washington, and Benjamin Weiser from New York.

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