Reported by: U.S. Attorneys » Eastern District of New York

A seven-count indictment was unsealed today in federal court in Brooklyn charging Andrii Derkach with conspiracy to violate the International Emergency Economic Powers Acts (IEEPA), bank fraud conspiracy, money laundering conspiracy and four counts of money laundering in connection with the purchase and maintenance of two condominiums in Beverly Hills, California.  Derkach allegedly purchased the properties in violation of new U.S. sanctions imposed earlier this year and concealed his interest in the transactions. Derkach remains at large.

As alleged in the indictment, beginning in 2013, Derkach and a co-conspirator devised a scheme to purchase and maintain two luxury condominiums in Beverly Hills while concealing his interest in the transactions from U.S. financial institutions.  Specifically, Derkach used the services of a corporate nominee, a multi-tiered structure of California-based shell companies, and numerous U.S. bank and brokerage accounts. Using this framework, Derkach wired approximately $3.92 million to the nominee from overseas accounts in Latvia and Switzerland belonging to companies registered in the British Virgin Islands.  The money was then used to pay $3.2 million in cash in the name of a corporate entity set up by the nominee, with Derkach having no visible affiliation with the purchase.  The remaining $800,000 was invested in a brokerage account maintained by the nominee for Derkach’s benefit and used to pay expenses on the condominiums, including taxes, homeowners’ fees, and utilities.  Because Derkach had fraudulently obscured details about his identity and involvement from the financial institutions holding the aforementioned bank and brokerage accounts, he prevented those financial institutions from moving funds into blocked accounts, and instead caused those financial institutions to engage in transactions involving blocked funds and transactions for the benefit of the condominiums, which were blocked property pursuant to the sanctions.

The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls, and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by Attorney General Merrick Garland on March 2, 2022 under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the Department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

Read full report: https://www.justice.gov/usao-edny/pr/russian-intelligence-agent-charged-fraud-and-money-laundering-connection-purchase-and