First of Two Blog Posts in a Series Pertaining to Attorneys Convicted of Money Laundering
In February, we blogged on the indictment of Vladimir Voronchenko (“Voronchenko”) in the Southern District of New York (“SDNY”), who was charged in connection with a scheme to make payments to maintain multiple properties in New York and Florida owned by his friend and associate, sanctioned Russian oligarch Viktor Vekselberg (“Vekselberg”). The February indictment also contained allegations that Voronchenko had retained a then unnamed U.S.-based attorney to help carry out those alleged money laundering activities.
On April 25, the U.S. Attorney’s Office for the SDNY announced that Robert Wise (“Wise”), a New York attorney, had pled guilty to a single count of conspiring to commit money laundering, in violation of 18 U.S.C. § 371. The substantive offense that was the object of the conspiracy was 18 U.S.C. § 1956(a)(2)(A), which criminalizes the act of transferring monetary instruments or funds into or outside of the United States with the intent to promote the carrying on of specified unlawful activity. Interestingly, the superseding information charges Wise with violating the general criminal conspiracy statute, Section 371 (which carries a statutory maximum sentence of “only” five years), rather than violating the specific money laundering conspiracy provision, 18 U.S.C. § 1956(h) (which carries a statutory maximum sentence of 20 years). It is unclear whether Wise is cooperating with investigators.
In our next post, we will discuss the Fourth Circuit’s affirmation of attorney Kenneth Ravenell’s conviction at trial for money laundering conspiracy, in violation of Section 1956(h).
Alleged Evasion of Sanctions
The charge against Wise identifies the specified unlawful activity as a violation of the International Emergency Economic Powers Act (“IEEPA”), by the transfer of U.S. dollars for the benefit of Vekselberg, who was sanctioned at the time by U.S. Department of Treasury’s Office of Foreign Assess Control (“OFAC”) via a designation as a “Specially Designated National” (“SDN”). A SDN designation is intended to block the individual’s property and interests, and prohibiting transactions not specifically authorized or exempted that involve dealing in said property or those interests. The indictment alleges no such authorization for these transfers from OFAC was ever sought by Wise or any other party. The count specified that the IEEPA violation was comprised of violations of Executive Orders 13660, 13661, and 13662, and 31 C.F.R. § 589.201 (which implemented those Executive Orders as part of a package of regulations promulgated by OFAC).
As outlined in the February indictment, while knowing that Vekselberg was designated as a SDN, Wise was said to have received U.S. dollar wire transfers into an IOLTA account from a shell company located in the Bahamas (namely, “Smile Holding Ltd.”), which was controlled by Voronchenko. From on or about April 2018 to March 2022, Wise received multiple transfers to the IOLTA account, totaling approximately $3.8 million dollars. These funds were subsequently used to maintain and service Vekselberg’s six properties – one located in Southampton, NY; two units at 515 Park Avenue in Manhattan; a penthouse apartment also on Fisher Island, Florida; and two located in Miami Beach. In particular, the count to which Wise ultimately pled highlights a single $150,000 wire transfer from Smile Holding Ltd. that occurred on June 27, 2019.
Wise also agreed to entry of a forfeiture order in the amount of $3,771,727.67, which will be satisfied by a payment of $210,441. As for Voronchenko himself, he was previously served in May of 2022 with a grand jury subpoena while at one of Vekselberg’ Florida properties. Nine days later, he flew to Moscow via Dubai, and reportedly has remained there ever since.
Among the individuals and teams credited with this guilty plea is “Task Force KleptoCapture”, an interagency law enforcement task force launched in May 2022 explicitly as a direct response to the invasion of Ukraine. In keeping with Task Force KleptoCapture’s involvement, the announcement of April 25 makes several references to the invasion of Ukraine, including a statement by the Director of Task Force KleptoCapture Andrew C. Adams: “From its inception, the Task Force has targeted those enablers of money laundering and sanctions evasion who aim to hide crime behind a veneer of professionalism. Admission to the bar carries with it a public trust that attorneys will act with honesty and integrity – a trust that Robert Wise chose to betray in exchange for an easy, illicit paycheck. The Task Force will continue to pursue those who have made the same poor decision.” We previously covered the task force’s involvement in the forfeiture of Voronchenko’s 255-foot luxury yacht, named “Tango,” which was seized in Spain in response to a warrant granted in the United States District Court for the District of Columbia.
If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. Please click here to find out about Ballard Spahr’s Anti-Money Laundering Team. Please click here to read our article on potential money laundering and client due diligence issues facing attorneys.