Security News: U.K. Businessman Arrested For Sanctions Evasion Benefitting Russian Oligarch Oleg Deripaska

Damian Williams, the United States Attorney for the Southern District of New York and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging GRAHAM BONHAM-CARTER, a citizen of the United Kingdom, with conspiring to violate United States sanctions imposed on Russian oligarch Oleg Vladimirovich Deripaska and wire fraud in connection with BONHAM-CARTER’s funding of U.S. properties purchased by Deripaska and efforts to expatriate Deripaska’s artwork in the U.S. through misrepresentations.  BONHAM-CARTER was arrested today in the United Kingdom, and the United States Government will be seeking his extradition to the United States.  Deripaska was previously charged with U.S. sanctions violations in an Indictment unsealed on September 29, 2022 (the “Deripaska Indictment”).

U.S. Attorney Damian Williams said: “As alleged, Graham Bonham-Carter provided property management and other services to his employer, sanctioned Russian oligarch Oleg Deripaska.  Bonham-Carter obscured the origin of funding for upkeep and management of Deripaska’s lavish U.S. assets, in violation of the international sanctions.  OFAC sanctions preclude supporters of the brutal and unjust Russian war regime from using U.S. dollars in any financial transactions, and we thank our international partners for their continued partnership in enforcing this critical sanctions program.”

Andrew C. Adams, Director of Task Force KleptoCapture said: “The international real estate market, and its infamous opacity, afforded Bonham-Carter no shelter from the diligence and expertise of U.S. law enforcement and our partners.  Others who would attempt to move illicit money through international markets should take notice: neither powerful connections nor sophisticated deceptions succeeded in hiding Bonham-Carter’s efforts to illegally service a sanctioned oligarch.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “With each new action we take, we shine a light on the vast network of individuals willing to work with Russian oligarchs who brazenly break our laws and abuse our financial systems. Bonham-Carter allegedly hid Deripaska’s money and assets from federal authorities, and continued to do so even after Deripaska was sanctioned by the U.S. Our work would not be possible without the ongoing and dedicated partnerships with our international counterparts, all of whom are strategically focused on stopping the Russian oligarchs and their criminal kleptocracy.”

According to the allegations contained in the Indictment unsealed today in Manhattan federal court and the Deripaska Indictment:[1]

In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine.  To address this national emergency, the President blocked all property of individuals determined by the U.S. Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide support individuals or entities engaging in such activities.  Executive Order 13660 and regulations issued pursuant to it, prohibit making or receiving any funds, goods or services by, to, from, or for the benefit of any person designated by the U.S. Treasury.

On April 6, 2018, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Deripaska as a Specially Designated National (“SDN”), in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the “OFAC Sanctions”).  According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation, and for operating in the energy sector of the Russian Federation economy.

From approximately July 2003 through the present, BONHAM-CARTER worked for entities controlled by Deripaska.  Among other things, BONHAM-CARTER manages Deripaska’s residential properties located in the United Kingdom and Europe, including a house in Belgravia Square, London.  Even after OFAC designated Deripaska, BONHAM-CARTER continued to work for Deripaska and refer to Deripaska as his “boss.”  For example, in an email dated on or about June 18, 2018, BONHAM-CARTER wrote: “Times a bit tough for my boss as sanctions have hit him from the USA so not an ideal time.”  In an e-mail dated on or about October 13, 2021, BONHAM-CARTER wrote: “It[’]s all good apart from banks keep shutting me down because of my affiliation to my boss Oleg Deripaska…. I have even been advised not to go to the USA where Oleg still has personal sanctions as the authorities will undoubtedly pull me to one side and the questioning could be hours or even days!!”

As alleged in the Indictment, after Deripaska’s designation, BONHAM-CARTER engaged in over a million dollars of illicit transactions to fund real estate properties in the United States for Deripaska’s benefit.  Between in or about 2005 and in or about 2008, Deripaska purchased three residential properties in the United States, two in New York, New York, and one in Washington, D.C. (the “U.S. Properties”).  The properties were managed by a company named Gracetown, Inc.  After OFAC imposed sanctions on Deripaska on or about April 6, 2018, Gracetown, Inc. continued to manage the properties for Deripaska’s benefit.  Shortly after Deripaska’s designation, Deripaska instructed BONHAM-CARTER to set up a new company for managing Deripaska’s properties.  On or about May 25, 2018, BONHAM-CARTER wrote in an email that “OVD [i.e., Deripaska] wants me to set up my own company to run the [Belgravia Square] house and to possibly include Japan, Italy, China and more.”  Less than two months later, on or about July 17, 2018, BONHAM-CARTER incorporated GBCM Limited. 

Between in or about March 2021 and in or about December 2021, while in Deripaska’s employ, BONHAM-CARTER transmitted payments for the upkeep of the U.S. Properties. BONHAM-CARTER wired payments totaling $1,043,964.30 from a bank account in Russia held in the name of GBCM Limited, to bank accounts held by Gracetown, Inc. in New York, New York.  Gracetown, Inc. used the funds from GBCM Limited to pay for various expenses associated with the U.S. Properties, including staff salaries, property taxes, and other services, and to maintain and keep up the U.S. Properties.

As alleged, BONHAM-CARTER also attempted to unlawfully transfer artwork purchased by Deripaska from an auction house in New York City to London through misrepresentations concealing Deripaska’s ownership of the artwork.  In May 2021, when advised by the auction house that it had reason to believe that the artwork belonged to Deripaska, BONHAM-CARTER falsely stated that the artwork and a payment of $12,146 that BONHAM-CARTER had made to ship the Artwork do not belong to Deripaska.  In fact, as BONHAM-CARTER knew, Deripaska had purchased the artwork, it remained his property, and the funds used to pay for shipping would be billed to Deripaska.  

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BONHAM-CARTER, 62, of the United Kingdom, is charged in a three-count Indictment with one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (“IEEPA”), one count of violating IEEPA, and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division.  Mr. Williams further thanked the Department of Justice’s National Security Division, Counterintelligence, and Export Control Section and the Justice Department’s Office of International Affairs of the Department’s Criminal Division for their guidance and support throughout this investigation.  Finally, Mr. Williams praised the outstanding efforts of the authorities in the United Kingdom, in particular the National Crime Agency.

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 the Attorney General on March 2 and run out 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.

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Anden Chow and Vladislav Vainberg are in charge of the case.

The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.