If it seems like a remote possibility that the U.S. will go to war over Ukraine, it’s much likelier that Washington will attempt to impose some form of sanctions, including asset freezes on Russian leaders and some of Russia’s richest individuals. Speculation about this is widespread, for instance in Reed Smith’s Global Regulatory Enforcement Blog.
As the Wall Street Journal editorialized today, Russia’s most powerful people view as critical
“… access to the Western financial system, especially as a safe harbor for their investments. No sensible commissar keeps any more wealth than he has to inside Russia. Russians put their cash in Cyprus or Swiss banks, Miami or New York condos, or British sports teams.”
Bank accounts are easy for governments to identify, as are prominent sports teams and well publicized multi-million dollar mansions.
Less prominent are assets owned in the name of secret companies or other family members. That is the way Iran circumvented sanctions for years.
We’ve written extensively about our methodology when it comes to asset searches, for example here and here. This is how the government, if it’s smart, should be starting to identify hidden assets that could go onto a freeze list.
- Start with where the person lives and works. If he doesn’t own the place, who does? Some of the very wealthy like to rent, but usually the owner of the property will be connected to the famous person living there via a limited liability company, a limited partnership, or by marriage.
- If you’re lucky, the tycoon will group lots of assets into one big company. While New York real estate developers like to form a new company (or group of companies) for each project, you may find that a Russian oligarch has grouped lots of assets under one British Virgin Islands company. Find that company through his mansion or office and you can freeze all the assets at once.
- Find out what car the person drives. We have researched ultra-rich people and found at first blush that they don’t appear to own a car. Security conscious wealthy people not only like to have their own cars, but their own security-conscious and vetted drivers as well. You may need to observe the license plate number of the car they enter after emerging from the airport or their office, but then tracing ownership to a company is easy.
- Figure out who has sued and been sued by the person you are searching. These people play hard and don’t settle easily. Chances are the other side obtained discovery against them, and found names that could help you inside the corporate structure. Even before this, people are often sued personally alongside a bunch of companies their former business partners know to be controlled by the person being sued. Find a person’s lawsuits and you often zero in on his web of companies too.
Basic first steps for any asset search whether related to economic warfare, corporate struggles or divorce, but if successful they can cause some severe pain.