Oligarch’s Cousin and Prince’s Heirs: Russia Probe-Tied Lawsuit Takes Aim at Treasury Rule

The U.S. Treasury Department building in Washington on June 8, 2017. (AP Photo/Pablo Martinez Monsivais)

MANHATTAN (CN) – Months before the raid on Michael Cohen’s home, the FBI investigated what the bureau believed to be substantial payments from foreign sources into his shell company Essential Consultants.

According to search warrants unsealed in March, the FBI traced seven payments totaling $583,332.98 to Columbus Nova, an investment firm run by Andrew Intrater, the cousin of sanctioned Russian oligarch Viktor Vekselberg. The FBI believed at the time that Columbus Nova had been controlled by the Renova Group, Vekselberg’s Swiss company.

Intrater and Columbus Nova, who have long denied being conduits for restricted foreign cash, fired back with a federal lawsuit on Monday seeking to unfreeze hundreds of millions in assets that the government tied to his sanctioned cousin.

Some of the blocked funds, according to Intrater’s lawsuit, involve loans to the heirs to the fortune of Prince, the late pop icon.

“Upon information and belief, none of the heirs to Prince’s estate is subject to OFAC sanctions,” Latham & Watkins attorney Richard Owens wrote in the lawsuit, abbreviating the name of the Treasury’s Office of Foreign Assets Control.

That is just one of the notable details of the 58-page complaint, which aims to scuttle the Treasury’s 50% rule.

The Treasury office’s rule treats any entity in which a sanctioned person has at least half of an ownership interest as if it were a sanctioned person itself.

“Defendants’ blocking of plaintiffs’ property by operation of the 50% Rule is a warrantless and unreasonable seizure of property in violation of the Fourth Amendment of the United States Constitution,” the complaint alleges.

Other than Intrater, eight LLCs and one other corporations are named as plaintiffs: US VC Partners GP LLC; US VC Partners Management, LLC; Israeli VC Partners Ltd.; Israeli VC Partners Management, LLC; CN Odyssey GP LLC; CN MapAnything GP LLC; Sparrow Capital Holdings LLC; Audubon Loan Funding GP LLC; and CN Partners LLC.

Those entities deny ties to sanctioned people or entities, and Intrater emphasized he is not a specially designated person.

“Plaintiffs remain in complete limbo, unable to control, manage, use, or dispose of their property,” the lawsuit claims, alleging the Treasury has not provided them with a hearing to dispute the allegations.

Though special counsel’s office interviewed Intrater, neither his nor Vekselberg’s names appear in the public version of Robert Mueller’s report.

“There are people I’ve been doing business with for nearly 20 years who were suddenly afraid to do business with me,” Intrater told The New York Times in an interview.

Intrater told the Times that the Treasury blocked more than $250 million tied to him and his firm’s investments, including $10 million lent to three of Prince’s heirs. The lawsuit does not cite these estimates.

Earlier this year, Russian oligarch Oleg Deripaska sued over Treasury sanctions that he claimed had been crippling his business. The Trump administration under Treasury Secretary Steven Mnuchin controversially eased sanctions against some of his businesses earlier this year, sparking outrage among Democrats.

Deripaska, a Putin-tied metals magnate who hired Paul Manafort as a consultant in Ukraine, is a key figure in the first volume of Mueller’s report and has been named among the figures the Treasury said attempted to “subvert Western democracies.”

The Treasury did not immediately respond to a request for comment on Intrater’s lawsuit.

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