High-Ranking Russian Citizen, Ukrainians Targeted By US, Swiss In Separate Moves

Tom Burroughes

24 March 2014

Amid the continued crisis involving Russia and Ukraine, a Russian citizen living in the US has been indicted attempting to interfere with tax laws and file false tax returns, while a report said Swiss authorities have opened an anti-money laundering probe into associates of Ukraine’s deposed president.

The developments come as the US and European Union moved to impose sanctions on Russia, with the US expanding the number of people being targeted. (For more on those developments, see here.) And there were reports that Russian citizens are spending far less money in the UK, perhaps indicative of greater reluctance to visit the country as diplomatic rows escalate.

Victor Lipukhin, a Russian citizen and former lawful permanent US resident, has been indicted in the US by a federal grand jury in Kansas City, Missouri, for attempting to interfere with the administration of the internal revenue laws and filing false tax returns, the US Justice Department and Internal Revenue Service said in a statement.

Lipukhin previously served as president of Severstal (USA), a subsidiary of AO Severstal - the largest steel producer in Russia. He reportedly hid “millions of dollars in several Swiss bank accounts held at UBS,” according to the indictment.

Lipukhin kept between around $4,000,000 and $7,500,000 in assets in two secret UBS bank accounts in Switzerland from “at least 2002 through 2007.”

“An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Lipukhin faces a potential maximum sentence of three years imprisonment on each count,” the DoJ said.

In a note from Citigroup, it said that following the latest sanctions move by the US administration versus Russia, some US credit card companies have ceased transactions with Russian banks owned by the sanctioned individuals.

“The press debate over ownership structures of the companies held by the listed individuals has underscored the opaqueness of these entities and the difficulty in ascertaining how sanctions may apply,” Citigroup sdaid.

Switzerland
In Switzerland, the country’s Federal Prosecutor’s Office has opened two money laundering investigations into associates of Ukraine’s deposed president, Viktor Yanukovych. Switzerland has already frozen the assets of 29 Ukrainians, including those of the former leader, media reports said.

A spokesperson for the prosecutor’s office told Reuters the formal investigations were opened on Thursday last week after confirmation from the federal police unit responsible with liaising with Swiss banks in cases of suspected money laundering.
The state public prosecutor can only open an investigation when there is a reasonable suspicion of possible punishable behaviour," the spokesperson said.

In connection with the notification from Switzerland's money laundering reporting office last week, this was confirmed after a thorough analysis, the spokesperson said.

A report by Swissinfo said it is not known not known how much money Ukrainian politicians and their families have in Switzerland, nor how much has been frozen by banks. The Swiss measures began to come into force at the end of February.
In total the assets of 29 Ukrainians have been frozen, including those of Yanukovych’s sons Alexander and Viktor, and Alexey Azarov, son of the former Ukrainian prime minister, Mykola Azarov. Also on the list are the former head of the secret services and the son of the general prosecutor, the report added.

Visitor decline
A report by Agence France Presse and other media outlets said Russian spending in UK shops fell by 17 per cent in February compared with the same month a year earlier, according to data issued by tax-free shopping statistics.

Visitors from Russia spent an average £669 ($1,103, 800 euros) per transaction, according to Global Blue, seeing them overtaken in third place by those from Nigeria compared to 12 months ago. Spending by Russian visitors was up 16 per cent for the year in 2013 but fell in February 2014.