Investigators Are Scrutinizing Newly Uncovered Payments By The Russian Embassy – By Jason Leopold & Anthony Cormier (Buzzfeed.com) / Jan 17 2018
Officials investigating the Kremlin’s interference in the 2016 US presidential election are scrutinizing newly uncovered financial transactions between the Russian government and people or businesses inside the United States.
Records exclusively reviewed by BuzzFeed News also show years of Russian financial activity within the US that bankers and federal law enforcement officials deemed suspicious, raising concerns about how the Kremlin’s diplomats operated here long before the 2016 election.
Special counsel Robert Mueller’s team, charged with investigating Russian election interference and possible collusion by the Trump campaign, is examining these transactions and others by Russian diplomatic personnel, according to a US official with knowledge of the inquiry. The special counsel has broad authority to investigate “any matters” that “may arise” from his investigation, and the official said Mueller’s probe is following leads on suspicious Russian financial activity that may range far beyond the election.
The transactions reveal:
- One of the people at the center of the investigation, the former Russian ambassador to the US Sergey Kislyak, received $120,000 ten days after the election of Donald Trump. Bankers flagged it to the US government as suspicious in part because the transaction, marked payroll, didn’t fit prior pay patterns.
Five days after Trump’s inauguration, someone attempted to withdraw $150,000 cash from the embassy’s account — but the embassy’s bank blocked it. Bank employees reported the attempted transaction to the US government because it was abnormal activity for that account. - From March 8 to April 7, 2014, bankers flagged nearly 30 checks for a total of about $370,000 to embassy employees, who cashed the checks as soon as they received them, making it virtually impossible to trace where the money went. Bank officials noted that the employees had not received similar payments in the past, and that the transactions surrounded the date of a critical referendum on whether parts of Crimea should secede from Ukraine and join Russia — one of Vladimir Putin’s top foreign policy concerns and a flash point with the West.
- Over five years, the Russian Cultural Centre — an arm of the government that sponsors classes and performances and is based in Washington, DC — sent $325,000 in checks that banking officials flagged as suspicious. The amounts were not consistent with normal payroll checks and some transactions fell below the $10,000 threshold that triggers a notice to the US government.
- The Russian Embassy in Washington, DC, sent more than $2.4 million to small home-improvement companies controlled by a Russian immigrant living not far from there. Between 2013 and March 2017, that contractor’s various companies received about 600 such payments, earmarked for construction jobs at Russian diplomatic compounds. Bankers told the Treasury they did not think those transactions were related to the election but red-flagged them because the businesses seemed too small to have carried out major work on the embassy and because the money was cashed quickly or wired to other accounts.
Each of these transactions sparked a “suspicious activity report” sent to the US Treasury’s financial crimes unit by Citibank, which handles accounts of the Russian Embassy. By law, bankers must alert the government to transactions that bear hallmarks of money laundering or other financial misconduct. Such reports can support investigations and intelligence gathering — but by themselves they are not evidence of a crime, and many suspicious activity reports are filed on transactions that are perfectly legal. Intelligence and diplomatic sources who reviewed the transactions for BuzzFeed News said there could be justifiable uses for the money, such as travel, bonuses, or pension payouts.
The Treasury Department turned over the suspicious activity reports to the FBI after the bureau asked for records that might relate to the investigation into the election, according to three federal law enforcement officials with knowledge of the matter. The bureau did not respond to requests for comment on what, if anything, it has done to investigate the transactions.
The Senate Intelligence Committee, which is conducting its own investigation into the election, requested suspicious activity reports on former ambassador Kislyak as far back as August. It is unclear whether senators have received those documents yet. The top Republican and Democrat on the committee each declined to comment.
“All the transactions which have been carried out through the American financial system fully comply with the legislation of the United States,” said Nikolay Lakhonin, a spokesperson for the Russian Embassy. “We are not going to comment on any concrete names and figures mentioned in BuzzFeed articles.” He added, “We see such leaks by US authorities as another attempt to discredit Russian official missions.”
Kislyak, through a spokesperson, declined to comment. The home improvement contractor said all the payments he received were aboveboard for legitimate work.
A Citibank spokesperson said the bank would not comment or confirm any particular report because they are confidential. “Consistent with our commitment to protect the integrity of the financial system,” wrote Jennifer Lowney, the spokesperson, “Citi is diligent in filing Suspicious Activity Reports with the US Treasury Department when appropriate.”
An ambassador at the center of Washington
Former ambassador Kislyak left the US in 2017 and now serves in the legislature of the Republic of Mordovia, which is part of Russia. But his contacts with people in Trump’s inner circle have shaken the administration.
Attorney General Jeff Sessions recused himself from the Russia investigation largely because he failed to mention a Kislyak meeting when he was confirmed.
Jared Kushner, the president’s son-in-law and adviser, drew criticism after he discussed setting up a secure communications channel at the Russian Embassy with Kislyak during the transition.
And Michael Flynn, the former national security adviser, pleaded guilty last year to lying to the FBI about multiple calls with Kislyak during the transition, one of which Kushner apparently asked him to make.
Now, according to the US official with knowledge of Mueller’s inquiry, the special counsel’s team is examining two financial transactions from Kislyak’s final weeks in the US.
The first occurred on Nov. 18, 10 days after Americans went to the polls. The Russian embassy sent $120,000 to Kislyak’s personal bank account, marked for “payroll.” Employees at Citibank raised an alarm about the transaction because it didn’t fit with prior payroll patterns and because he immediately split the money in half, sending it by two wire transfers to a separate account he maintained in Russia.
Then on Jan. 25, five days after Trump was inaugurated, someone attempted to withdraw $150,000 in cash from an embassy account. Citibank officials blocked that transaction. It is not clear why bankers stopped the withdrawal, but they flagged the attempt to the government as suspicious. Treasury officials then sent it on to the FBI, according to the three law enforcement sources with knowledge of the matter.
Kislyak, a nuclear scientist who became ambassador in 2008, was an affable figure in Washington who was known to throw lavish parties, including a 2010 bash with edible Fabergé eggs, baton twirlers, and a guest list that included a US Supreme Court justice and at least two senators.
As Russia annexes Crimea, checks get cashed
Now authorities appear to be digging into the entire Russian diplomatic corps operating in the US, with bank records dating back 10 years that show financial conduct flagged as suspicious. The official with knowledge of Mueller’s probe said it is examining a wide range of financial behavior by Russian diplomats.
One of Putin’s main strategic goals was the annexation of Crimea from Ukraine, key to controlling the Black Sea and home to a large Russian naval base. He accomplished the takeover on March 18, 2014, two days after a widely disputed Crimean referendum in favor of joining Russia.
Around that critical period, from March 8 to April 7, 2014, Citibank officials flagged nearly 30 checks totaling about $370,000 to Russian Embassy employees, including military attachés, living in Washington. The checks, which were for nearly identical amounts, were all cashed as soon as they were received.
Bank officials noted that the employees had not received similar payments in the past, and that the timing of the transactions matched that of the Crimean referendum.
The embassy would not say what the money was used for. Capt. Vyacheslav Khlestov, in charge of the Russian Office of the Defense, Military, Air, and Naval Attachés, did not return an email seeking comment. Even though the transfers were first noted by American officials in 2014, it is not clear whether the Treasury Department or the FBI took further action to investigate.
But it wouldn’t be the last time a diplomatic financial transaction raised alarms.
In August of that year, Alexey Voronov, an assistant air attaché, made a cash deposit of $44,000 in his account and then sent the money to an unknown individual. Voronov did not return emails seeking comment.
In the fall of 2015, bankers noted deposits into an account identified as “Russian Cultural Center in New York.” No such entity could be found in public filings, but the banking records show its address as 9 East 91st Street in New York, the same address where the Russian Consulate General is located. The phone number listed in banking records is disconnected. Bankers noted that the cash deposits appeared to be “structured,” which means they were separated into small amounts that seemed designed to stay under the $10,000 daily threshold that would trigger an alert to authorities. For example, in a single afternoon, someone made ATM cash deposits into the “Russian Cultural Center in New York” account of $5,000, $4,400, and $600.
Bank employees also raised alarms about payments to a home improvement contractor. They reported that his companies didn’t appear to have the capacity to perform large construction projects such as those at the embassy.
Bankers flagged to the Treasury Department’s financial crimes unit about 600 payments from the Russian Embassy to this contractor’s companies. The bankers found that those transactions did not appear connected to the presidential campaign but that they were suspicious for other reasons. For example, a company controlled by the contractor received multiple checks from the Russian Embassy for a total of about $320,000; he then withdrew cash in amounts below the level that would have triggered an alert to government watchdogs.
The Treasury, in turn, reported the transactions to the FBI, according to a law enforcement report shared with the bureau. The FBI declined to comment on what, if anything, it did with the information.
The contractor said the payments were normal for a small business like his and he had no idea why investigators would think the transactions were suspicious. He explained that he used multiple accounts at different banks to pay workers, vendors, and suppliers, and that he often deposited money in one account and immediately transferred it to another to make payments.
The contractor and his wife registered a computer company in the greater Washington, DC, area in June 2016. There is little else publicly available about this company, which was dissolved in late 2016. The contractor said the company sold computers to businesses and estimated the firm made only $400 in revenue during its brief life.
The Senate Intelligence Committee’s investigation
For the past five months, the bipartisan leadership of the Senate Intelligence Committee has been trying to get records on any financial transactions involving Kislyak that the Treasury Department may have. It is unknown if they have received them or not.
In August, the committee sent a letter to the Treasury’s financial crimes unit requesting any suspicious activity reports or other “derogatory notification” the Treasury might have received from financial institutions on the former ambassador, as well as more than 30 other people and entities. The August letter, signed by the committee’s top Republican and Democrat, also asked for any records that the Treasury may have provided to the FBI, the intelligence community, and the Office of the Special Counsel.
The committee’s letter does not indicate that any financial institution has actually issued reports or other notifications to the Treasury about any of the people or entities named in the letter, or that the Treasury actually has records about them.
The senators made it clear they wanted the Treasury to turn over whatever records it might have to the committee before handing them over to special counsel Mueller.
“It is our expectation that these documents will be provided directly to the Committee, without pre-review by any outside entities, including the Office of Special Counsel,” said the letters, marked “committee sensitive,” meaning they are not intended to be made public. “Treasury is free to provide a copy of any documents provided to the Committee to the Office of Special Counsel for review in parallel to production to the Committee, but these documents should not be provided to the Office of Special Counsel prior to receipt by the Committee.”
In a follow-up letter sent in December, the committee leaders asked again for any records, as well as information that the Treasury might have on still more people. “We trust that your staff is working to provide those documents as soon as possible,” Sen. Richard Burr, a Republican and the committee’s chair, and Sen. Mark Warner, the ranking Democrat, wrote.
It is not clear why the Treasury had not fulfilled the original request for almost four months. “We generally refrain from providing specifics on requests related to committee investigations,” a spokesperson for the department said.
But the committee’s letters — not previously made public — raise a curtain on its secret investigation.
The senators requested financial information that the Treasury may have on a total of 45 people or entities. While most of the names in the Senate letters have been mentioned publicly in connection with the Trump–Russia investigation, at least three have not.
The committee also asked for financial information, if the Treasury has any, on Ivan Tavrin, a Putin ally who is the chief executive at telecom giant MegaFon and has a stake in the Russian social media site VKontakte. And the senators sought any records the Treasury might have on Bob Foresman, who once ran the Russia desk at Barclays bank and was in charge of Renaissance Capital, a Moscow-based investment firm. No suspicious activity reports on Tavrin or Foresman have been located, according to two law enforcement officials.
The senators also requested any records on Alisher Usmanov, one of the richest men in Russia and a close ally of President Putin. He has majority control of the Russian social media site VKontakte and was an investor in Facebook.
It is not known why the committee is seeking records on these individuals, and they did not return messages asking for comment.
In its December letter, the committee also asked for documents “connected in any way to funds, sent from Russia or Russian banks, that are designated to ‘finance election campaign of 2016.’”
That request came after BuzzFeed News reported in November that the FBI had been investigating those transactions. Almost 60 such transfers were flagged as suspicious after they were sent by the Russian foreign ministry to embassies across the globe, including nearly $30,000 to the compound in Washington.
Russian officials labeled the BuzzFeed News story “propaganda” and said the money, which totaled almost $380,000, was used to help Russian nationals living overseas vote in their country’s parliamentary election held last year. ●
