“corporate governance services” to investment managers.

For $15,000 a year, plus other fees, HighWater would provide an employee to sit on the board of the financial vehicle that the fund manager was expected to launch to accept the wealthy family’s money, according to emails between the fund manager and a HighWater executive reviewed by The New York Times.

The fund manager also brought on Boris Onefater, who ran a small U.S. consulting firm, Constellation, as another board member. Mr. Onefater said in an interview that he couldn’t remember whose money the Cayman vehicle was managing. “You’re asking for ancient history,” he said. “I don’t recall Mr. Abramovich’s name coming up.”

The fund manager hired Mourant, an offshore law firm, to get the paperwork for the Cayman vehicle in order. The managing partner of Mourant did not respond to requests for comment.

He also hired GlobeOp Financial Services, which provides administration services to hedge funds, to ensure that the Cayman entity was complying with anti-money-laundering laws and wasn’t doing business with anyone who had been placed under U.S. government sanctions, according to a copy of the contract.

“We abide by all laws in all jurisdictions in which we do business,” said Emma Lowrey, a spokeswoman for SS&C Technologies, a financial technology company based in Windsor, Conn., that now owns GlobeOp.

John Lewis, a HighWater executive, said in an email to The Times that his firm received four referrals from Concord from 2011 to 2014 and hadn’t dealt with the firm since then.

“We were aware of no links to Russian money or Roman Abramovich,” Mr. Lewis said. He added that GlobeOp “did not identify anything unusual, high risk, or that there were any politically exposed persons with respect to any investors.”

The Cayman fund opened for business in July 2012 when $20 million arrived by wire transfer. The expectation was that tens of millions more would follow, although additional funds never showed up. The Cayman fund was run as an independent entity, using the same investment strategy — buying and selling exchange-traded funds — employed by the fund manager’s main U.S. hedge fund.

The $20 million was wired from an entity called Caythorpe Holdings, which was registered in the British Virgin Islands.

Documents accompanying the wire transfer showed that the money originated with Kathrein Privatbank in Vienna. It arrived in Grand Cayman after passing through another Austrian bank, Raiffeisen, and then JPMorgan. (JPMorgan was serving as a correspondent bank, essentially acting as an intermediary for banks with smaller international networks.)

A spokesman for Kathrein declined to comment. A spokeswoman for JPMorgan declined to comment. Representatives for Raiffeisen did not respond to requests for comment.

The fund manager noticed that some of the documentation was signed by a lawyer named Natalia Bychenkova. The Russian-sounding name led him to conclude that he was probably managing money for a Russian oligarch. But the fund manager wasn’t bothered, since GlobeOp had verified that Caythorpe was compliant with know-your-customer and anti-money-laundering rules and laws.

He didn’t know who controlled Caythorpe, and he didn’t ask.

In early 2014, after Russia invaded the Ukrainian region of Crimea, markets tanked. The fund manager made a bearish bet on the direction of the stock market, and his fund got crushed when stocks rallied.

The next year, Caythorpe withdrew its money from the Cayman fund. Caythorpe was liquidated in 2017.

The fund manager said he didn’t realize until this month that he had been investing money for Mr. Abramovich.

Susan C. Beachy and Kitty Bennett contributed research. Maureen Farrell contributed reporting.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Live Ukraine Updates: Biden Moves to Suspend Normal Trade With Russia

As Russian troops massed near the border with Ukraine last month, the American ambassador to Israel received an appeal on behalf of Roman Abramovich, the most visible of the billionaires linked to President Vladimir V. Putin.

Leaders of cultural, educational and medical institutions, along with a chief rabbi, had sent a letter urging the United States not to impose sanctions on the Russian, a major donor, saying it would hurt Israel and the Jewish world. Days later, Mr. Abramovich and Yad Vashem, the Holocaust memorial, announced a partnership that a spokesman for the organization said included a pledge of at least $10 million.

The request to the diplomat reflects the extraordinary effort Mr. Abramovich, 55, has made over the last two decades to parlay his Russian fortune into elite standing in the West — buying London’s Chelsea soccer team, acquiring luxury homes in New York, London, Tel Aviv, St. Barts and Aspen, collecting modern masterworks and contributing to arts institutions around the world. With two superyachts, multiple Ferrari, Porsche and Aston Martin sports cars, and a private 787 Boeing Dreamliner jet, Mr. Abramovich wanted everyone to know that he had arrived.

But now the backlash against the Russian invasion of Ukraine is tarnishing the status that Mr. Abramovich and other oligarchs have spent so much to reach. On Thursday, British authorities added him to an ever-expanding list of Russians under sanctions for their close ties to Mr. Putin.

Mr. Abramovich, whose fortune is estimated at more than $13 billion, was barred from entering Britain or doing any business there — disrupting his plans to sell his soccer team and prohibiting it from selling tickets to matches, even blocking him from paying to keep the electricity on in his West London mansion.

Oligarchs like Mr. Abramovich “have used their ill-gotten gains to try to launder their reputations in the West,” said Thomas Graham, a Russia scholar at the Council on Foreign Relations. “But the message of these sanctions is, that is not going to protect you.”

On Friday, Canada announced sanctions of its own against Mr. Abramovich. The United States has not imposed sanctions on the billionaire — so far, at least. In a statement explaining its actions, the British government said that the businessman had profited from transactions with the Russian government and special tax breaks. The statement also suggested that a steel company Mr. Abramovich controlled could contribute to the war against Ukraine, “potentially” supplying steel for Russian tanks. The business, Evraz, said in a statement that it had not done so. A representative for Mr. Abramovich did not respond to a request for comment.

“The blood of the Ukrainian people is on their hands,” Liz Truss, the British foreign secretary, said of the oligarchs under sanctions. “They should hang their heads in shame.”

Credit…Victor Vasenin/Kommersant/Sipa USA, via Associated Press

Michael McFaul, an American ambassador to Moscow during the Obama administration, recalled that while Mr. Putin’s government claimed to despise the United States and its allies, his foreign ministry was constantly trying to help the oligarchs around him, including Mr. Abramovich, obtain visas so that they could ingratiate themselves with the Western elite.

“On our side, we have been playing right along,” he said, overlooking the oligarchs’ ties to Mr. Putin and welcoming them and their money.

Orphaned as a child in a town on the Volga River in northern Russia, Mr. Abramovich dropped out of college and emerged from the Red Army in the late 1980s just as the Soviet leader Mikhail Gorbachev was opening new opportunities for private enterprise. Mr. Abramovich plunged into trading anything he could, including dolls, chocolates, cigarettes, rubber ducks and car tires.

His big break came in the mid-1990s, after the collapse of the Soviet Union, when he and a partner persuaded the Russian government to sell them the state-run oil company Sibneft for about $200 million. In 2005, he sold his stake back to the government for $11.9 billion. Other deals followed, including the formation of a mammoth aluminum company. Many involved the Russian state, and some ended in bitter litigation.

After Mr. Putin was inaugurated president in 2000, he quickly moved to dominate the billionaire businessmen who had profited from privatization, sending a message by jailing the richest and most powerful oligarch. Mr. Abramovich is one of the few early elite who remain in his circle.

As Mr. Putin was consolidating power, Mr. Abramovich served as governor of a desolate northeastern province from 2001 until 2008.

Credit…Reuters

“I started business early, so maybe that’s why I’m bored with it,” he told The Wall Street Journal in 2001 about his interest in the region, saying he wanted to lead a “revolution toward civilized life.”

But like other oligarchs wary of the new president’s power to make or break them, Mr. Abramovich also began looking for footholds outside Russia.

Mr. Putin’s display of force “increased the incentive for the oligarchs to have acceptance in the West,” said Stephen Sestanovich, a professor of international relations at Columbia University and former ambassador at large to the former Soviet Union. “Who knows when you might fall out with Putin and need an alternative place to land?”

In spring 2003, Mr. Abramovich was in Manchester, England, to watch the legendary Brazilian forward Ronaldo score a game-winning hat trick for Real Madrid. The Russian had never shown much interest in soccer before, but that night he was smitten.

He soon began shopping for a team — looking in Spain and Italy before settling on England and finally on Chelsea. His $180 million takeover — completed in quick, stealthy talks with the British financier Keith Harris over a single weekend — transformed the club. In his first summer, he went on the largest single spending spree for players that English soccer had ever seen.

Within two years of his arrival, Chelsea was the English champion for the first time in a half-century, and the team has since won four more championships. A Russian flag has hung outside the stadium for years, emblazoned with the words “The Roman Empire,” alongside a stylized image of its owner’s face. (Britain on Friday said it would consider proposals to buy the soccer team under special conditions.)

Credit…Odd Andersen/Agence France-Presse — Getty Images

At a news conference when Russia won the right to host the 2018 soccer World Cup, Mr. Putin commended Mr. Abramovich for the development of Russian soccer, too, and suggested he might play a role in “a public-private partnership” to prepare for the tournament. “He has a lot of money in stocks,” Mr. Putin noted, smiling.

While looking after his London soccer team, Mr. Abramovich met and married his third wife, Dasha Zhukova, the daughter of a Russian oil magnate, who had grown up partly in Los Angeles; studied Russian literature at the University of California, Santa Barbara; and tried fashion design in London.

In 2011, he bought an elegant 15-bedroom mansion near Kensington Palace for a reported price over $140 million, which was expanded a few years later to include a huge underground swimming pool.

Then he turned heads in Manhattan in 2014, paying $78 million for three adjacent townhouses on East 75th Street, in a landmark district of the Upper East Side. He proposed combining the three homes of different styles into a single mega-mansion, with an elevator, a new glass-and-bronze rear facade and a pool in the lower level. The Historic Districts Council, an advocacy group, called the plan “a whole new level of egregious consumption.” But he ultimately managed to win city approval, in part by purchasing a fourth adjacent townhouse for nearly $29 million and revising his alteration plans.

Credit…Brendan Mcdermid/Reuters

Ms. Zhukova had developed a growing interest in art, and in 2008 she and Mr. Abramovich founded Garage, a seminal contemporary art center in Moscow. (Amy Winehouse performed at the opening, and early shows included works by Cindy Sherman and Jeff Koons.) He joined the board of the Bolshoi Theater. And Mr. Abramovich started to earn a reputation as one of the biggest spenders in the art world, known for buying pieces by blue-chip artists. He spent nearly $120 million at auctions in the same week, acquiring a Francis Bacon triptych and Lucian Freud’s “Benefits Supervisor Sleeping.”

It struck one figure in the New York art world as “a trophy approach to collecting.”“It’s like when you go to a hunter’s house,” said Todd Levin, an art adviser. “There’s the elephant on the wall, there’s the rhino, there’s the tiger and the lion.”

Although he rarely gave interviews, Mr. Abramovich was often photographed alongside the rich and famous at fashionable spots around the world, and his New Year’s Eve parties at his estate on the French island of St. Barts — reportedly a $90 million property covering 70 acres — have made tabloid headlines. One year, Paul McCartney joined the Killers to sing the Beatles classic “Helter Skelter.” Entertainment in other years included the Red Hot Chili Peppers and Prince.

Mr. Abramovich and Ms. Zhukova divorced by 2019, and he transferred to her the New York townhouses, plus two nearby apartments, for $92 million, according to public records. She lives in the city with their two children — he has seven in all. She serves as a board member of the Metropolitan Museum, one of the premier positions in New York philanthropy, and is a fixture in the city’s art and fashion scenes. Her network of friends includes Ivanka Trump, the daughter of former President Donald J. Trump; Jared Kushner, the former president’s son-in-law and adviser; Josh Kushner, Jared’s brother and an investor; and Josh’s wife, the model Karlie Kloss.

Credit…Team Boyko/Getty Images

On Thursday, Ms. Zhukova distanced herself from Mr. Abramovich. “Dasha has moved on with her life and is happily remarried,” a spokesman for Ms. Zhukova said in a statement. She issued a second, more personal statement denouncing the Russian invasion as “brutal,” “horrific” and “shameful.”

“As someone born in Russia, I unequivocally condemn these acts of war, and I stand in solidarity with the Ukrainian people,” Ms. Zhukova said.

Mr. Abramovich has struggled to escape the stigma of association with Mr. Putin. In 2018, after Russian spies fatally poisoned two people in Britain, the British authorities delayed renewing his business visa, reportedly seeking additional disclosures from him about his dealings.

He turned instead to Israel, where his status as a Jew allowed him citizenship. He now owns mansions in Tel Aviv and the seaside city of Herzliya, and Haaretz ranks him among the richest people in the country.

There, too, Mr. Abramovich’s big spending has set him apart. He donated $30 million to Tel Aviv University in 2015, and has since given tens of millions of dollars to the Sheba Medical Center near the city, according to a hospital official.

Credit…Orel Cohen/Agence France-Presse — Getty Images

He has also donated more than $100 million to an Israeli settler organization. An investigation last year by the BBC News Arabic service found that companies controlled by Mr. Abramovich had given that money to the City of David Foundation, which buys up Palestinian property and moves Jews in as part of an effort to bolster Israel’s claim to sovereignty.

Last November, President Isaac Herzog of Israel flew to London for the opening of a Holocaust exhibition Mr. Abramovich had funded at the Imperial War Museums. He called the Russian “a shining example of how sports and teams can be a force of good,” citing the “Just Say No to Antisemitism” banners that his Chelsea soccer team was hanging at its games.

When reports emerged of the recent appeal to the United States not to subject Mr. Abramovich to sanctions, Dani Dayan, the chairman of the Yad Vashem Holocaust memorial and a former diplomat, initially defended the letter.

“I don’t see any reason to reject a gift by a Jew, an Israeli citizen, a person that for a decade is committed to very worthy causes,” he said. He was “not a judge” and was not aware of any wrongdoing by Mr. Abramovich, Mr. Dayan added.

But after Britain imposed sanctions against Mr. Abramovich, the Israeli Holocaust memorial said it was suspending its relationship with him. A spokesman declined to say whether the memorial had received any of the multimillion-dollar pledge. “In light of recent developments,” the organization said in a short statement, “Yad Vashem has decided to suspend the strategic partnership with Mr. Roman Abramovich.”

Reporting was contributed by Graham Bowley, Stephen Castle, Stefanos Chen, Michael Forsythe, Kimiko de Freytas-Tamura, Robin Pogrebin and Rebecca R. Ruiz.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

How Western Firms Quietly Enabled Russian Oligarchs

Behind a set of imposing metal doors in an easy-to-miss office building in a New York City suburb, a small team manages billions of dollars for a Russian oligarch.

For years, a group of wealthy Russians have used Concord Management, a financial-advisory company in Tarrytown, N.Y., to secretly invest money in large U.S. hedge funds and private equity firms, according to people familiar with the matter.

A web of offshore shell companies makes it hard to know for sure whose money Concord manages. But several of the people said the bulk of the funds belonged to Roman Abramovich, a close ally of President Vladimir V. Putin of Russia.

Concord is part of a constellation of American and European advisers — including some of the world’s largest law firms — that have long helped Russian oligarchs navigate the Western financial, legal, political and media landscapes.

both said they were leaving Russia. A spokeswoman for another large firm, Debevoise & Plimpton, said it was terminating several client relationships and would not take any new clients in Moscow. Ashurst, a large London-based law firm, said it would not “act for any new or existing Russian clients, whether or not they are subject to sanctions.”

The accounting giants PwC, KPMG, Deloitte and EY — which have provided extensive services to oligarchs and their networks of offshore shell companies — also said they were leaving Russia or severing ties with their local affiliates.

wrote a letter to the White House arguing that Russia’s Sovcombank shouldn’t face sanctions, citing the bank’s commitment to gender equity, environmental and social responsibility.

Sovcombank had agreed to pay the lobbyist’s firm, Mercury Public Affairs, $90,000 a month for its work.

The Biden administration recently imposed sanctions on Sovcombank. Within hours of the announcement, Mercury filed paperwork with the Justice Department indicating that it was terminating its contract with Sovcombank.

As recently as mid-February, the British law firm Schillings represented the Russian oligarch Alisher Usmanov, a longtime ally of Mr. Putin.

Two weeks later, the European Union and the U.S. Treasury placed sanctions on Mr. Usmanov. Nigel Higgins, a spokesman for Schillings, said the firm is “not acting for any sanctioned individuals or entities.”

say on its website that it represents “some of Russia’s largest companies,” including Gazprom and VTB. The firm said it was “reviewing and adjusting our Russia-related operations and client work” to comply with sanctions.

In Washington, Erich Ferrari, a leading sanctions lawyer, is suing the Treasury on behalf of Mr. Deripaska, who is seeking to overturn sanctions imposed on him in 2018 that he claims have cost him billions of dollars and made him “radioactive” in international business circles.

And the lobbyist Robert Stryk said he had recently had conversations about representing several Russian oligarchs and companies currently under sanctions. He previously represented clients targeted by sanctions, including the administrations of President Nicolás Maduro of Venezuela and former President Joseph Kabila of the Democratic Republic of Congo.

Mr. Stryk said he would consider taking the work if the Treasury Department provided him with the necessary licenses, and if the prospective clients opposed Russia’s aggression in Ukraine.

online profiles of current and former Concord employees.

Wall Street bankers and hedge fund managers who have interacted with Concord and its founder, Michael Matlin, said it oversaw between $4 billion and $8 billion.

It isn’t clear how much of that belongs to Mr. Abramovich, whose fortune is estimated at $13 billion.

Mr. Abramovich has not been placed under sanctions. His spokeswoman, Rola Brentlin, declined to comment on Concord.

Over the years, Concord has steered its clients’ money into marquee financial institutions: the global money manager BlackRock, the private equity firm Carlyle Group and a fund run by John Paulson, who famously anticipated the collapse of the U.S. housing market. Concord also invested with Bernard Madoff, who died in prison after being convicted of a vast Ponzi scheme.

panel focused on European security, requested that the U.S. government impose sanctions on Mr. Abramovich and seize the assets at Concord, “as this blood money presents a flight risk.”

The work performed by law, lobbying and public relations firms often plays out in public or is disclosed in legal or foreign agent filings, but that is rarely the case in the financial arena.

While Russian oligarchs make tabloid headlines for shelling out for extravagant superyachts and palatial homes, their bigger investments often occur out of public view, thanks to a largely invisible network of financial advisory firms like Concord.

Hedge fund managers and their advisers said they were starting to examine their investor lists to see if any clients were under sanctions. If so, their money needs to be segregated and disclosed to the Treasury Department.

Some hedge funds are also considering returning money to oligarchs who aren’t under sanctions, fearful that Russians might soon be targeted by U.S. and European authorities.

Paradise Papers project, involved the files of the Appleby law firm in Bermuda. At least four clients owned private jets through shell companies managed by Appleby.

When sanctions were imposed on companies and individuals linked to Mr. Putin in 2014, Appleby jettisoned clients it believed were affected.

The Russians found other Western firms, including Credit Suisse, to help fill the void.

Ben Freeman, who tracks foreign influence for the Quincy Institute for Responsible Statecraft, said Russians were likely to find new firms this time, too.

“There is that initial backlash, where these clients are too toxic,” Mr. Freeman said. “But when these lucrative contracts are out there, it gets to be too much for some people, and they can turn a blind eye to any atrocity.”

David Segal contributed reporting. Susan Beachy contributed research.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<