From the New York Times
The Middlemen at the Heart of an Oligarch-Industrial Complex
They oversee the flow of billions of dollars from Putin-connected Russians to companies involved in superyachts and villas. They’ve drawn the attention of a U.S. task force.
By Michael Forsythe, Gaia Pianigiani and Julian E. Barnes — June 1, 2022
On Feb. 24, as Russian troops poured into Ukraine on Day 1 of the invasion, an employee of a yacht management company sent an email to the captain of the Amadea, a $325 million superyacht: “Importance: High.”
The family of a Russian oligarch under sanctions had spent much of January and February cruising from island to island in the Caribbean and had some questions and concerns. When would be a good time to visit New Zealand? Bali? Could the yacht get a special boat to pull water skiers? And would the staff of the Amadea please stop folding napkins in triangles? “Guests don’t like it,” wrote the employee, Victoria Pastukhova, a “client coordinator” for the company, Imperial Yachts.
At Imperial Yachts, no detail is too small to sweat. Based in Monaco, with a staff of about 100 — plus 1,200 to 1,500 crew members aboard yachts — the company caters to oligarchs whose fortunes turn on the decisions of President Vladimir V. Putin. Imperial Yachts and its Moscow-born founder, Evgeniy Kochman, have prospered by fulfilling their clients’ desires to own massive luxury ships.
For a Russian with hundreds of millions of dollars to spend, Mr. Kochman’s company takes care of everything: It oversees construction, hires the crew, manages the vessel’s day-to-day operation and can charter the ship or sell it, if need be. Another company also run by Mr. Kochman, BLD Management, performs a similar service for villas.
Imperial’s rise has benefited an array of businesses across Europe, including German shipbuilders, Italian carpenters, French interior design firms and Spanish marinas, which together employ thousands of people. Imperial Yachts is at the center of what is essentially an oligarch-industrial complex, overseeing the flow of billions of dollars from politically connected Russians to that network of companies, according to interviews, court documents and intelligence reports.
Imperial Yachts and BLD are now under scrutiny by a U.S. government task force, called KleptoCapture, that is trying to disrupt the Russian war machine by going after the assets of oligarchs tied to Mr. Putin.
After some high-profile raids and seizures, the Americans are focusing on the network of enablers working outside of Russia. Investigators from the F.B.I., the Treasury and several intelligence agencies are gathering evidence showing that businesses and individuals knowingly aided Russians under sanctions whose wealth came through corruption, making them vulnerable to U.S. charges.
Andrew Adams, a federal prosecutor leading the task force, said in an interview that “targeting people who make their living by providing a means for money laundering is a key priority.”
Documents obtained from the Amadea by U.S. officials show the role Imperial Yachts plays in managing the myriad requests of stunningly rich, seaborne Russians. The Amadea is now in Fiji, where American officials are fighting a court battle to take possession of the yacht.
Mr. Adams said that Russian superyachts that don’t find a buyer may be sold to salvagers for their pricey fittings: gold-plated bathroom fixtures, marble, inlaid floors made of rare wood.
In pursuing the enablers, American and European investigators have confronted a deliberately confusing ownership structure involving daisy chains of shell companies stretching from the Marshall Islands to Switzerland. Along with the Amadea, Imperial Yachts oversaw the construction of the Scheherazade, a $700 million superyacht that U.S. officials say is linked to Mr. Putin, and the Crescent, which the Spanish police believe is owned by Igor Sechin, chairman of the state-owned oil giant Rosneft.
A secret U.S. intelligence assessment concluded that the money to build the ships came from a group of investors led by Gennady Timchenko, a confidant of Mr. Putin and one of Russia’s richest men, who, like Mr. Sechin, has been under U.S. sanctions since 2014. Mr. Timchenko and his partners designed the Scheherazade — seized in early May by the Italian police — as a gift for Mr. Putin’s use, according to the assessment.
Together, the three vessels may have cost as much as $1.6 billion, enough to buy six new frigates for the Russian navy.
Simon Clark, a lawyer for Imperial Yachts, said that the company “is unaware of any connection between our business and Mr. Timchenko. However, we are in the yacht-building business; we are not involved in our clients’ financial affairs.” Mr. Clark added that the company has “never conducted business or provided services to any parties subject to international sanctions.”
But U.S. officials are not buying such explanations. Elizabeth Rosenberg, the assistant secretary for terrorist financing and financial crimes at the Treasury Department, said it was the responsibility of people in the yacht services industry to avoid doing business with people under sanctions.
“And if you do,” she said, “you yourself will be subject to sanctions.”
Courting Russia’s Wealthiest
Mr. Kochman, 41, got his start in the yacht business in Russia in 2001, the year after Mr. Putin took power, selling Italian-made yachts. . . .
As some well-connected Russians joined the ranks of the world’s wealthiest people and began to buy up villas on the French and Italian Rivieras, Mr. Kochman moved to Monaco. Instead of selling mere yachts, often made on a production line, Mr. Kochman and his sister, Julia Stewart, now 46, entered into the world of superyachts, custom-made vessels of about 100 feet or longer. “We grow with our clients like parents with babies,” he said in 2016 in a rare interview.
Company records in Monaco show that Imperial Yachts was set up in 2008. The business also registered that year in the secrecy haven of Jersey in the English Channel.
But Mr. Kochman was still spending a lot of time in Moscow. That year he attended an exhibition for the ultrawealthy, with one of his British-built yachts on display. “We [Rssian oligarchs] buy your yachts and you buy our [Russian] gas,” Mr. Kochman told a Guardian reporter. Soon, his business took off.
Rich Russians and Persian Gulf royalty now dominate the ranks of owners of the world’s most extravagant superyachts, which can cost up to $75 million a year to operate. Since 2010, 17 superyachts 400 feet or longer have been delivered; all are owned by Russians or members of the Gulf monarchies.
In about 2014, Imperial Yachts landed its biggest project to date, a 349-foot superyacht to be constructed by Lürssen, a German shipbuilder: This would become the Amadea.
Its Russian owner was sparing no expense, with hand-painted Michelangelo-style clouds above the dining table, a lobster tank, a fire pit and, at the bow, a five-ton stainless-steel Art Deco albatross figurehead. Nick Flashman, a former yacht captain who had joined Imperial, oversaw the project. Zuretti, a French firm, did the interior design.
Sébastien Gey, the director at Zuretti, said in an interview that the yacht’s owner — whom he declined to name because of nondisclosure agreements — was deeply involved in its design and construction, making frequent visits as the ship was built and outfitted. It was delivered in 2017.
But even before it was finished, the owner had Lürssen build another, larger superyacht, the Crescent, delivered in 2018, followed by the even bigger 459-foot Scheherazade, which went into service in 2020. . . .
Eduard Khudainatov, a Russian oil tycoon not under sanctions, has been identified as the owner of three superyachts under scrutiny. U.S. intelligence indicates that the vessels were paid for by a group of investors led by a Putin ally. . . .
In an affidavit, Timothy J. Bergen, special agent for the Federal Bureau of Investigation, said that Mr. Khudainatov, who doesn’t appear on lists of Russia’s richest people, was a “clean, unsanctioned straw owner” of the Amadea and the Scheherazade.
Mr. Bergen said that Imperial Yachts, referred to as “Company A” in his affidavit, “has a practice of concealing yacht ownership behind nested shell companies” and using stand-ins like Mr. Khudainatov “in order to conceal the true beneficial owner.”
Mr. Clark, the lawyer for Imperial Yachts, said the company “would never knowingly create structures to hide or conceal ownership, nor would we knowingly broker deals to sanctioned individuals.”
AP News: Danish voters give strong ‘yes’ to joining EU defense policy
BY JAN M. OLSEN — June 1, 2022
COPENHAGEN, Denmark (AP) — With nearly all votes counted from a referendum Wednesday, Denmark is headed toward joining the European Union’s common defense policy that it long eschewed, a new example of a country in Europe seeking closer defense links with allies after Russia’s invasion of Ukraine.
The electoral commission said that with ballots fully counted in 84 of 92 Denmark’s electoral districts, 66.9% voted in favor of abandoning the country’s 30-year opt-out from the common EU policy and 33.1% against.
“An overwhelming majority of Danes have chosen to abolish the defense opt-out. I’m very, very happy about that,” Prime Minister Mette Frederiksen said.
“We have sent a clear signal to (Russian President Vladimir) Putin,” she added. “With the decision we have made, we show that when Putin invades a free and independent country and threatens peace and stability, we will move closer together.”
On Twitter, German Foreign Minister Annalena Baerbock applauded the outcome of the Danish vote. “Every step each of us takes, makes us stronger in the face of these tectonic shifts.”
Ending Denmark’s opt-out would have limited practical effect for either Denmark or the EU. The referendum follows the historic bids by fellow Nordic countries Sweden and Finland to join NATO — something to be taken up at a summit next month.
For Denmark, a founding member of the 30-member defense alliance, joining the EU’s defense policy would have a relatively modest impact on Europe’s security architecture, particularly compared to Sweden and Finland joining NATO. But Christine Nissen, a researcher with the Danish Institute for International Studies, said both moves were “part of the same story,” and would strengthen military cooperation on a continent stunned by the war in Ukraine.
The main effect of abandoning the opt-out will be that Danish officials could stay in the room when EU colleagues discuss defense topics, and Danish forces can take part in EU military operations, such as those in Africa and Bosnia and Herzegovina.
It would be the first time that one of the four Danish opt-outs from the EU’s Maastricht Treaty, which laid the foundation for political and economic union, is scrapped by voters in Denmark.
”I believe people have voted yes because of the war in Ukraine. The ‘yes’ side has tried to misuse the war in Ukraine to make the Danes feel that it is important that we stand together,” said Morten Messerschmidt, the leader of the opposition Danish People’s Party and a leading opponent of removing the defense opt-out.
One of the founding members of NATO, Denmark has stayed on the sidelines of the EU’s efforts to build a common security and defense policy in parallel with the trans-Atlantic military alliance.
For decades, Europe’s been a source of contention in Denmark. In 1992, voters set back plans to turn the European construction into a union by rejecting the Maastricht treaty amid widespread opposition to a federal European government that could limit the sovereignty of individual nations.
At an EU summit in Edinburgh, Scotland, later that year, European leaders agreed on a text with tailor-made provisions allowing Danes to ratify a revised treaty with four provisions.
They allowed Danes to stay out of a joint EU citizenship, justice and home affairs, the monetary union which allowed Danes to stay out of the euro and keep the krone, and defense.
The citizenship issue, which said European citizenship would not replace national citizenship, has since become irrelevant as other members later adopted the same position.
But the other provisions remain intact despite efforts by successive government to overturn them. In a 2000 referendum, Danish voters decided to stay outside the euro and 15 years later they voted to keep the exemption on justice and home affairs.
Frederiksen, who Wednesday became the first Danish prime minister to win a referendum on removing an opt-out, said she was not tempted to test other opt-outs in plebiscites.
Turnout was 66.23%, according to initial official figures.