Russia

Officials Seizing Russian Yachts Now May Steal Americans' Property in the Future

Going after oligarchs breathes new life into sketchy asset forfeiture powers.

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Efforts to punish Russia for invading Ukraine rely not just on funneling weapons to the beleaguered defenders but also on economic sanctions to deny Vladimir Putin's regime resources and to inflict pain until the aggression stops. Among the targets are "Russian elites and their families," in President Joe Biden's words, whose assets are being seized to pressure the regime. But calling somebody an "oligarch" is no substitute for legal proceedings, and the U.S. government is stretching already sketchy asset forfeiture powers in ways that will, no doubt, create precedents for the future.

"Did you see these yachts we're—that are being picked up?" President Biden boasted this week. "Think about the—the incredible amounts of money these oligarchs have stolen. These yachts are a hundred—millions and millions of dollars." 

The president riffed off a Justice Department announcement of the seizure of "a $90 million yacht— named the Tango — belonging to sanctioned Russian oligarch Viktor Vekselberg." Spanish authorities took the yacht using a U.S. warrant issued as part of Task Force KleptoCapture, launched after the invasion "to hold accountable corrupt Russian oligarchs." KleptoCapture is a catchy name, but it glosses over the fact that, while many wealthy Russians are close to Putin's regime, calling them "oligarchs" isn't the same as demonstrating that they share responsibility for the war.

"The western media employ the term 'oligarch' to describe super-wealthy Russians in general, including those now wholly or largely resident in the west," Anatol Lieven of the Quincy Institute for Responsible Statecraft wrote last month in the Financial Times. "The term gained traction in the 1990s, and has long been seriously misused. In the time of President Boris Yeltsin, a small group of wealthy businessmen did indeed dominate the state, which they plundered in collaboration with senior officials. This group was, however, broken by Putin during his first years in power."

Putin still has an inner circle of cronies who wield power and bear responsibility for invading Ukraine, but being Russian, rich, and labeled "oligarch" isn't proof of being one of them. That's important, because the West, in general, and the United States, in particular, is supposed to prove that private individuals engaged in crimes before imposing punishment.

"Serious legal questions surround the seizures of boats, planes and other property owned by oligarchs," warns George Washington University Law School's Jonathan Turley. "In these largely uncharted waters, many of the owners are likely to get back their yachts and other property after the headlines have receded. The United States and Western countries have considerable authority to seize property, but less authority to keep it. The reason is that, unlike Russia, these countries are bound by property rights and rules of due process."

True, few people harbor much sympathy for Russians of any sort these days; Rep. Eric Swalwell (D–Calif.) infamously called for expelling Russian students from the country. And owning a yacht that can be seized, let alone one worth $90 million, doesn't guarantee much sympathy from the public. But being rich doesn't erase your rights, and it means that you have the resources to defend yourself in ways not always available to regular people subject to official attention.

"While freezing an asset is a relatively simple task, seizing and taking over properties is more involved. It requires a lengthy legal process that takes years in many cases, according to several experts on the subject," Janaki Chadha observed in Politico. "Seizures can be further complicated by the fact that ownership of most if not all of the Russian oligarchs' properties is shielded by shell companies."

Contrast that with the experience of Terry Abbott from whom Indiana police seized $10,000 in 2015. "Cops used a process known as civil forfeiture, allowing them to proceed with pocketing those funds prior to securing a criminal conviction," Billy Binion reported for Reason. "Naturally, Abbott attempted to challenge that action in court. But he lost his attorney—as the money he would use to pay for that counsel had been taken by the state."

Civil asset forfeiture is frequently and accurately criticized as a "license to steal." Widely publicized abuses like the treatment of Abbott sparked an intermittently successful reform movement

"While I support further reforms to expand the role of a criminal conviction in asset forfeiture, this bill is a step forward to create higher burdens of proof imposed on the seizure of private property by the government," Pennsylvania Gov. Tom Wolf (D) said upon signing a reform measure in 2017.

But unpopular targets can breathe new life into abusive practices, and Vekselberg's property was seized under the same authority as was wielded against Abbott. The federal government sued and seized the yacht itself without proving its owner engaged in wrongdoing. Of course, Vekselberg has the resources to battle the U.S. government through the courts. In the meantime, the property must be kept up.

"A vessel is treated very much like a person or corporation," Michael Karcher, a maritime lawyer told Robb Report, which focuses on luxury lifestyles. "The boat can run up its own bills. Then, if the yacht is in someone's boatyard, there's the question of 'Can we do any business with them?'" The publication also predicts "prolonged legal battles and hefty costs to maintain these gigayachts."

Ultimately, the United States government may lose, adds Turley, because "prosecutors would have to show that large corporations that have operated for decades in international markets are now deemed criminal enterprises for the purposes of these properties. It is not clear that governments now seizing the property will be able to establish the nexus between an alleged crime and these proceeds or property for some, if not most, of the oligarchs."

A proposed bill might provide a firmer legal basis for seizures. "The legislation encourages the administration to confiscate any property – including luxury villas, yachts, and airplanes – valued over $5 million from Russian oligarchs previously sanctioned by the U.S. government for their involvement in the Kremlin's invasion and human rights violations in Ukraine," according to Rep. Tom Malinowski (D–N.J.) who is co-sponsoring the bill with Rep. Joe Wilson (R–S.C.). But rather than address due process concerns, the bill makes private property forfeit based on little more than officials' claims that its owners are linked to Putin. Lowering the bar to forfeiture reverses reform efforts and may come back to haunt us.

Russian billionaires will probably survive economic sanctions in relative comfort. But the precedent set by labeling people as untouchables and then imposing penalties without proof of a crime will set the tone for future abuses. Powers used against wealthy Russians now will be deployed in the years to come against people who cross the authorities and have fewer resources for defending themselves.

NEXT: Revenge at All Costs

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  1. This is way worse than JD implies. Sure, "drug kingpins" was the entire reason we have asset forfeiture in the first place. So of course this is just making things worse.

    But beyond that, now they are double and trippling down on extra-jurisdictiinal law to go with extr-legal

    1. ...Extra-legal proceedings. We are now declaring that US copyright law can apply criminally to foreign citizens in foreign countries. (Kim dotcom, etc.) These yachts are in no way under the legal authority of the US.

      So now any foreign power can start taking our stuff, and we don't have a leg to stand on.

      Private or public, doesn't matter. Just pass a law and take it. The only thing that matters is the will and ability to grab it back or sufficiently retaliate.

      Just like the time before states and law. The bigger guy just takes what he wants.

      1. Under this theory, international shipping is at risk. Wealthy travelers are at risk.

        It is just stupid beyond measure. Plus, the sketchy use of demonizing language should make everyone wary. They "stole" their wealth. Not even an attempt at hiding the propaganda or justifying the statement.

        And anyone who lived through Saddam and Kuwait should be wary of these claims of war crimes. Remember the senate testimony about babies ripped from incubators, etc.

        1. This is why China is pushing the yuan as a more stable and safe currency reserve. Because we're proving even less trustworthy than to totalitarian communist regime.

          1. Go live in China you weasel piece of shit. You're full of shit and a traitor.

            1. Time for a new flag on your pickup truck.

            2. Sullum, taking pride in your nation comes with the requisite of calling out tyrannical actions.

              But mean tweets broke you.

            3. You are a democrat. You are incapable of patriotism. You are also not eligible to declare anyone a traitor. I am NOT a democrat. I am an American. I am intrinsically patriotic, and fully capable of correctly condemning democrats, such as yourself, as traitors.

              You are a traitor. You have proven that h8 dress of times based ‘ Muir lasts here. You should GTFO of my country and go someplace else. Maybe Cuba.

            4. Are you calling JFree outside his name? How WUDE!!!

        2. The only people who “stole” their wealth work for the government.

      2. It should also be pointed out that, auspiciously anyway, seizing assets from drug kingpins kept drugs off of US streets and money in legal US resident's pockets because their local PDs don't have to expend resources combating local drug problems. There is no similar claim for Russian Oligarchs in either direction. It's not like the Oligarchs are charging $1000 on the street corner for a bag full of Russian propaganda or occupying the recently-vacated crackhouses in Detroit with armed footsoldiers after a successful drug war, nor is Biden is going to return these funds to average Russian citizens. It's straight up "You didn't build that." without borders.

        Moreover, there's no rational reason why the US would be exclusive in this regard. China could seize the property of Western Oligarchs for their positions in relation to Hong Kong independence or Iran could seize the assets of Western Oligarchs for their positions in relation to female genital mutilation.

        1. Absolutely they can. But their currency isn't the world reserve and our assets aren't held in the Shanghai Global Bank in explicit trust that it will be there tomorrow.

          So for Iran to breach faith is pretty minor. For the US and EU to participate in shenanigans like that is a clear signal of "with us or against us" that went over about as well as a 2am cherry bomb in the shitter.

          1. But their currency isn't the world reserve
            ---------
            Yet.

            1. Yet. If I didn't live through this shit, I wouldn't have believed it possible to fail so thoroughly.

              1. The question we have to ask now is: Is this on purpose?

                https://simulationcommander.substack.com/p/now-that-were-done-pretending-hunters?s=w

                The laptop is real. Everybody knows it. It proves that Joe Biden is bought and paid for. Now it’s time to ask the hard questions: What would a bought president be doing? Cutting our energy independence? Hurting Americans by cutting off trade via sanctions? Pushing us into a war we can’t possibly win that would likely lead to the rise of China as the world’s superpower? Devaluing the dollar and gutting the middle class?

                Maybe the better question is: If Biden’s goal was to wreck the economy and enable the rise of China, would he be doing anything at all differently?

        2. One could also claim that intradicting foreign drug supplies gave rise to domestic producers, local meth labs, bringing jobs and money back home.

          Then cracking down on these producers pushed production to industrial scale foreign producers, driving prices down and making drugs more available.

          Weird that the authoritarian ratchet only turns one way, but the results always wind-up going in the wrong direction.

        3. seizing assets from drug kingpins kept drugs off of US streets and money in legal US resident's pockets because their local PDs don't have to expend resources combating local drug problems.

          Really?

          1. *Auspiciously*, as in suggesting, not necessarily delivering, a successful outcome.

            Stealing a yacht from a Russian oligarch because Russia invaded Ukraine doesn't even carry the auspices of making American streets safer or serving domestic interests.

            1. Aspirationally

        4. Go ahead, China, seize the massive wealth western oligarchs stash in your country.

          Good lord, what a joke.

      3. So now any foreign power can start taking our stuff, and we don't have a leg to stand on.

        Philosophically? Absolutely true.

        Functionally, we have the same leg that lets America get away with all the other shit we get away with: We've got the guns.

        Now, after we've managed to plow the economy into the pavement at mach 15, that's going to be less protection, but for now, anyway, I think it's reasonable to recognize that it's basically just not a level playing field out there on this front.

      4. Which, I guess was the point you made. Sorry, I need more coffee. 😀

      5. Correct.

    2. Asset forfeiture began with pirates and smugglers, long ago, centuries before the drug war.

      1. And the US Government is just continuing that tradition of piracy on the seas.

    3. Officials Seizing Russian Yachts Now May Steal Americans' Property in the Future

      Like tbe U.S. Government couldn't and wouldn't do it before?

      Ackshuyally, according to an article I once read in The Voluntaryist, asset forfeiture is even older than the Republic. Ironically enough, it started as a means of stopping piracy on the high seas. Now it is a tool of piracy.

      The real Free-Market Libertarian way to deal with Putin and the Putineers that would have more long-term effect is to "Drill, Baby, Drill!"

    4. It is all THEATER. If the government wants your shit who will really stop them? They will make up any bullshit to justify their actions. like they always do. The courts are a fucking joke now and barely a separate branch.

      1. And now they also have the means to shut off your access to money anywhere in the world on top of that. All that stuff they're doing to Russia and Russians they can do to you.

        The government has never put a useful tool back down once it's been picked up, and it won't take long I fear for one administration or another to define someone as a dissident, take all their stuff and shut off all access to money anywhere in a move to force compliance with the will of the new regime.

  2. Nah, I don't think it will come to that. Democrats will be in power for the foreseeable future. And they're not going to hurt their ultra-wealthy base.

    #BillionairesForBiden

  3. "...unlike Russia, these countries are bound by property rights and rules of due process."

    Really? You sure? Because J6 trials and Canada turning into a dictatorship seriously undermine Western credibility on this statement.

    And, of course, the unelected EU.

    1. Yeah, I was going to say.

      Contrast that with the experience of Terry Abbott from whom Indiana police seized $10,000 in 2015.

      Or the Canadian truckers in 2022, for example...

  4. If you're a foreigner, and we don't like you, we get to take your stuff. A fair and simple rule.

    1. You don't have to be a foreigner - - - - - - -

      1. Or even a Dirty White Boy.

  5. "But the precedent set by labeling people as untouchables and then imposing penalties without proof of a crime will set the tone for future abuses."

    True. Next thing you know, "democracies" might start freezing bank accounts for peaceful protests, and taking all your money WITHOUT bothering with the pretense of a crime.

    1. Nah.... that could never happen....

  6. So; time for yet another constitutional amendment confirming the bill of rights.
    "No level of government can take any property of any kind from any citizen or legal resident or legal visitor for any reason other than these: evidence related to a crime for which the owner has been arrested and charged; items directly related to a specific search warrant issued by a judge of relevant jurisdiction; items taken in payment for court fines or civil judgements after two or more attempts to collect the sum due."

    1. So I see now you're defending terrorists and child pornographers. I bet you'd even give the devil the benefit of law.

      1. Missed that part about "items directly related to a specific search warrant issued by a judge of relevant jurisdiction"?

  7. How is naming specific people to have their assets seized not an unconstitutional "bill of attainder"?

    1. Because FYTW.

      1. And why not? Don't we have a new Supreme who takes no position on whether individuals have natural rights?

        1. To a standing ovation and a dancing senate leader.

          Weird times.

    2. Because of the due process of the President saying they a mean person? I mean issuing a sanction decree.

  8. A proposed bill might provide a firmer legal basis for seizures.

    Only in the same "firmer legal basis" as the Reichstag voting to allow Hitler to pass legislation by decree, or the Soviet constitution cloaked Stalin's diktat. Dictators gonna dictate, whether it's Putin or a legislative majority rubber-stamped by their fellow government employees in the Supreme Court.

  9. Good. If they catch Americans supporting and funding mass murder and fascist wars to subjugate millions of innocent people murdering children along the way I hope they do more then take their fucking yachts.

    1. Internet tuff gai.

      1. Quite willing to force others o do the fighting on his behalf.

        1. Keyboard commandos aren't big on field work.

    2. Everyone loves a strong man government.

    3. I hate Putin and the Putineers as much as the next real Libertarian, but acting within due process is part of who Libertarians are.

      1. Even the devil gets his due, or bankers would cheat a saint.

        It blows my mind to see a system destroyed for spite of a participant. Especially as the ruble bounced back and we're left with this hole in our foot.

    4. He said after we have just come out of two decades of supporting and funding mass murder.........

    5. Bwtter fascist harder before those nasty fascists get a chance to implement fascism.

      Because we're Democrats!

    6. By your own statements you should be executed as a traitor right away. Along with every single one of your fellow travelers.

  10. Call it a wealth tax.

  11. Going after oligarchs breathes new life into sketchy asset forfeiture powers.

    Just wait until the Russian oligarch cases are going to make it to SCOTUS and the (according to you) "well-qualified" KBJ with her "public defender" background is going to rule these seizures to be perfectly constitutional.

    Whether it's Biden or KBJ or any of the other jerks, stop pretending that you oppose the outcomes when you help put the authoritarians, war mongers, and psychopaths responsible for such policies in power.

  12. But calling somebody an "oligarch" is no substitute for legal proceedings

    "Exactly. What's your point?"

  13. Officials Seizing Russian Yachts Now May Steal Americans' Property in the Future
    Going after oligarchs breathes new life into sketchy asset forfeiture powers.

    And libertarians, forever seeking their beloved left-libertarian alliance, wonder why things like basic police reforms can't be passed even with Democratic super-dupercalifragilistic majorities in various political districts.

  14. Very perspicacious reporter, this Tuccille. The Kleptocracy can offer maybe three comebacks: 1. He's lying. 2. No True Scotsman! 3. That's exactly what the OTHER half of the Kleptocracy will do if Libertarian spoiler votes keep us from administering the proper sort of coercion. (Clip your choice to a $5 bill and we'll be passing the hat presently).

  15. Wow. No, you know what, I appreciate this take. It's peak libertarian. Somebody has to do it.

    Dear God, somebody, won't you think of the yachts?

    1. First they came for the undesirables... But Tony was too busy sucking off totalitarians to notice, and too stupid to realize it could happen to him.

      1. It’s already happening to people that aren’t Russian oligarchs, but Tony’s certain it won’t end up happening to people that aren’t Russian oligarchs in the future.

        Yes, he is that stupid.

        1. War is hell for yachts.

      2. I thought we were taking totalitarians' yachts.

        1. I haven't seen any evidence Bill Gates' oligarch yacht has been touched.

        2. Did you know yachts can have slippery slopes?

        3. So when we remove your party from America you’re all for having the assets of you democrat traitors confiscated? Awesome. If you go quietly, we can give you a some clothes and transport you and all your friends to some socialist paradise far away. Never to return.

          The end.

  16. What?!!??! No that would never happen here!

  17. I am no US Constution scholar, but I would like to know how some of these seizures do not violate the "Bill of Attainder" clause of the US Constitution?

  18. Why is it now illegal for "corrupt Russian oligarchs" to own property in the U.S.? If it's illegal now, why was it legal for them to buy it in the first place?

  19. "Spanish authorities took the yacht using a U.S. warrant"

    I wish I had lapdogs like that.

  20. Hey, if you're not doing anything wrong you got nothing to worry about. derp

  21. Officials Seizing Russian Yachts Now May Steal Americans' Property in the Future

    Future? Where you been?

  22. I can't wait until other countries start applying these same so called laws against the United States

    1. Let's not forget that corporations and governments have "suspended" legal contracts, as if a "suspended" contract could be anything but asswipe afterwards. The Russians could do a lot of "takebacks" which weren't a thing until now.

  23. Not only has the gov’t failed to prove wrong doing before stealing the yachts. The wrong doing was likely done to fellow Russians. So, the US has no jurisdiction over those alleged crimes. You folks are correct. This will bounce back to cost US citizens liberty and money. This is more reason to learn about jury nullification. For example had Abbot successfully resisted having his money stolen and ended up on trial for doing so. There needs to be a lot
    Of folks in the jury pool that would refuse to
    Vote to convict.

  24. What is to stop the Russian Navy from stealing western countries yachts? Oh, yes, if the Russians did that would be war crimes!

  25. So, like the NYT and Sarah Palin, the Reason writer's don't read their own rag, or they'd have heard of "Civil Asset Forfeiture".

  26. Who needs yachts of the Russians? Let them drown in the depths of the ocean and no one will care, I'm sure. Ordinary citizens of the Russian Federation do not have money for expensive yachts. Let the rich politicians stay without them. I have a lot of friends in Russia, the last time I flew there a year and a half ago with the help of https://www.russia-travel.com/visa-services/ who helped me apply for a visa. However, now the situation is very tense and I'm afraid that in the near future it will be impossible to get to the Russian Federation from behind the Iron Curtain, just like in Soviet times.

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