OFAC Cites Claims that Oleg Deripaska Laundered Money for Putin

The US Treasury Department has justified sanctions against a Russian oligarch by citing reports claiming that he helped President Vladimir Putin launder illicit funds, the Financial Times reported Friday.

In a letter sent last month to attorneys representing Oleg Deripaska, the Office of Foreign Assets Control (OFAC) outlined allegations that the Russian tycoon held and laundered funds on behalf of the Russian president, including by misrepresenting transfers made for Putin’s personal benefit as unrelated business transactions, the news outlet said.

“In or before July 2011, Deripaska’s business activity was reportedly used, on at least one occasion, as a cover to facilitate the transfer of funds for the personal use of then Russian prime minister Vladimir Putin,” OFAC said in the letter cited by the FT. Deripaska purportedly cancelled an initial public offering for the automaker Gaz in order to “hide Russian president Vladimir Putin’s money laundering through the company, as recently as September 2017,” according to OFAC, which also cited claims that Deripaska once “ordered the murder of a businessman, and had links to a Russian organised crime group”. The agency separately alleged that Deripaska invested $800 million in projects tied to the 2014 Winter Olympics in Sochi after Putin “reportedly compelled Russian oligarchs” to do so, the FT said. In the letter, OFAC states that the cited allegations included only “unclassified” and “releasable” justifications for the agency’s April 2018 decision to impose sanctions on Deripaska, according to the FT, which also noted that the Treasury Department did not identify specific sources of the “reported” claims. The disclosure comes in response to a lawsuit filed by Deripaska seeking to force OFAC to justify his inclusion on US sanctions lists intended to penalize Russia for its 2014 invasion of Crimea and its meddling in the 2016 US election, according to the report.

“They don’t provide any facts—just guesses, rumours and balderdash,” Deripaska told the FT in an interview. “These are unsupported allegations. This is nonsense, instead of the presumption of innocence until presented with facts that should be proven in a court.”

Democratic lawmakers who spoke to the FT said that OFAC’s letter provided further proof that US sanctions against the tycoon should remain in place. Eliot Engel, the Democratic chairman of the House Foreign Affairs Committee, said the Treasury Department should take additional steps against Deripaska, whose investments in the aluminum, energy and industrial sectors made him Russia’s wealthiest man prior to the 2008 financial crisis.

Last year, the Treasury Department lifted sanctions against aluminum giant Rusal, its parent company En+ and energy firm EuroSibEnergo after Deripaska reduced his “direct and indirect shareholding stake in these companies and severed his control.” The decision was strongly opposed by House Democrats, who criticized the department for its alleged lack of transparency in the decision.