The US Justice Department’s flagship seizure—a $300 million Russian superyacht—may soon be returned to its claimed owner, as the Biden administration’s sanctions enforcement weakens, Bloomberg reports.
The case underscores a core challenge in sanctions enforcement: proving true ownership of luxury assets. Since the Ukraine invasion, Western governments have targeted Russian oligarchs’ wealth, but complex legal structures and hidden ownership arrangements have made seizing and holding these assets increasingly difficult.
At the center of the dispute is a common tactic among Russia’s elite: using intermediaries to obscure asset ownership. While Eduard Khudainatov holds the legal title to the 348-foot Amadea, the DOJ argues he is merely a front for sanctioned billionaire Suleiman Kerimov. Khudainatov’s lawyers admit Kerimov’s family had usage rights but claim it was only a temporary arrangement—a distinction that could be pivotal in court.
“Title is what you would not transfer if you were trying to conceal ownership,” a government lawyer argued Friday in Manhattan federal court, as the case threatens one of the DOJ’s most high-profile sanctions victories.
The KleptoCapture task force, launched in March 2022, spearheaded the Biden administration’s most aggressive sanctions enforcement effort—targeting Russian yachts, art, and luxury real estate while scrutinizing financial institutions. But Attorney General Pam Bondi’s decision to disband the unit signals a shift in priorities.
Meanwhile, the US government spends $750,000 monthly to maintain and insure the seized yacht in San Diego, underscoring the financial strain of managing confiscated assets. Judge Dale Ho’s upcoming ruling in US v. M/Y Amadea could further challenge the administration’s sanctions strategy as the Justice Department pivots its focus from Russian oligarchs to cartel operations.
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