Russian Oligarch Charged With Sanctions Violations Over Attempts to Establish TV Network

Konstantin Malofeyev, a Russian oligarch, was charged in the U.S. District Court for the Southern District of New York with violating U.S. sanctions in his efforts to establish television networks in Russia and Greece and acquire a television network in Bulgaria, DOJ announced April 6. Malofeyev is charged with conspiracy to violate U.S. sanctions and violations of U.S. sanctions relating to the hiring of U.S. citizen and television producer Jack Hanick to set up the networks. Malofeyev allegedly transferred a $10 million investment from a U.S. bank to a business associate in Greece in violation of the U.S. asset freeze on the oligarch.

The U.S. designated Malofeyev under the International Emergency Economic Powers Act in a wave of sanctions in 2014 relating to Russia's occupation of Crimea. Malofeyev was listed due to his role as "one of the main sources of financing for Russians promoting separatism in Crimea" and Donetsk. According to the indictment, Malofeyev hired Hanick in 2013 with plans to create a Russian cable television news network.

The U.S. discovered details about the nature of Hanick's work through his unpublished "memoir," which FBI agents found through a search of the defendant's email account. Hanick filled a leadership role at the new Russian network, including as board chairman, general producer and chairman of the HR committee. Hanick was indicted in March and is in custody (see 2203030060). Malofeyev remains at large and is believed to be in Russia, DOJ said.

Malofeyev also hired Hanick to hide the oligarch's role in acquiring a Bulgarian television network, DOJ alleged. The defendant did so by allegedly arranging to travel to Bulgaria with a Greek associate of Hanick's to give the appearance that a Greek national, not Malofeyev, was buying the network. The oligarch allegedly used a shell company in 2014 to make the investment, with plans to then give company ownership to an associate in Greece to transfer the funds that were sitting in a bank in Texas. Malofeyev allegedly backdated a sale and purchase agreement to make it look like the transfer of the shares in the Texas bank from Moscow to Athens occurred before the oligarch's sanctions listing.

“The Justice Department will work relentlessly to counter Russian aggression, including by enforcing U.S. sanctions law,” Assistant Attorney General Matthew Olsen of DOJ's National Security Division said. “As alleged in the indictment, Konstantin Malofeyev is a Russian oligarch who has been sanctioned since 2014 for threatening Ukraine and providing financial support to the Donetsk separatist region. Malofeyev knowingly violated U.S. sanctions by paying for services of a U.S. person and by seeking to transfer money that had been invested in the United States.” Each of the two sanctions charges carries a maximum penalty of 20 years in prison.