U.S. Charges Five Russians, Three Syrians Over Alleged Sanctions Violations
Eight people, including five Russian businessmen from a company with ties to the nation’s military, were indicted here Tuesday on charges they helped ship jet fuel to Syria, in violation of U.S. sanctions.
In an indictment handed up Tuesday by a federal grand jury in Washington, five employees at Russian freight forwarding company Sovfracht and three Syrian men who allegedly worked with them, were charged with violating U.S. sanctions on Syria and Crimea.
The men also created new shell companies to continue moving the fuel after their conduct was earlier flagged by U.S. authorities, the indictment said.
Sovfracht was barred by the U.S. Treasury Department in September 2016 from access to the U.S. financial system without a special license over its alleged involvement in Russia’s role in a crisis in Ukraine.
The company is close to the Russian military, and its alleged front company was nominated as the general agent of the Russian naval fleet, according to a September 2016 email the alleged front company sent to another firm, the indictment said. One of the defendants also previously worked with the Russian Ministry of Defense, according to the indictment.
“The defendants allegedly conspired to defy our sanctions against Syria and Crimea, endangering both American interests in the region as well as our foreign policy and national security at home,” John Demers, who runs the Justice Department’s national security division, said in announcing the case.
A representative for Sovfracht couldn’t immediately be reached for comment. The defendants aren’t in custody and are believed to be overseas, according to a spokesman for the U.S. attorney’s office.
The U.S. attorney’s office in Washington filed a civil case in September 2016 to seize $2.5 million in funds held at two U.S. banks, alleging that the funds were illicit payments that were part of a Sovfracht scheme to ship Russian fuel to Syria.
After that case was filed, the employees used another front company, Maritime Assistance LLC, to circumvent the U.S. sanctions and make payments in U.S. dollars, the indictment said.
In May 2017, after nearly $3 million in Sovfracht wire transfers were blocked in the U.S., one of the defendants allegedly told colleagues that Maritime “has been burned,” that is was “unadvisable to make further use of it,” that they couldn’t risk large payments through Maritime and needed “to create a new (1 or more) clean company,” according to the indictment.
In the earlier case, prosecutors alleged that Sovfracht tried to pay an oil company in Cyprus, Petrolina, around $2.5 million “for the supply of fuel.”
That fuel was intended for the regime of Syrian President Bashar al-Assad, prosecutors said in 2016, pointing to ship location data that tracked the Russian vessel at issue, Mukhalatka. That ship’s movements coincided with the wire payments, and appeared to have disabled its equipment that provides its location data in an apparent effort to hide its movement to Syria, that 2016 complaint said.
Russia intervened in Syria in the fall of 2015, providing air power to prop up Mr. Assad and reversing the tide of the multisided civil war, which at one point appeared to threaten to topple the Assad regime.
The Russians have frequently been at odds with Washington over the U.S.’s military mission in Syria, which includes an air campaign against Islamic State and the deployment of hundreds of ground troops.
The Tuesday indictment provides additional details on the 2016 allegations, including emails that allegedly confirmed the tanker had unloaded nearly 5 million metric tons of jet fuel in Syria, and includes the movements of another Russian ship, Yaz.
The civil war in Syria sharply limited Syria’s fuel production, which prosecutors said dropped down to 25,000 barrels of oil and gas a day in 2014 from 400,000 in 2011. That created an urgent need for Syria to procure fuel from other sources, prosecutors said in the earlier case.
Prosecutors had asked the court to put that civil case on hold in recent months as a related criminal investigation continued, according to court records.
Source: U.S. Charges Five Russians, Three Syrians Over Alleged Sanctions Violations – WSJ