Dark money expert explains where Russian oligarchs are hiding their cash

According to dark money expert Casey Michel, if the U.S. government is serious about going after Russian oligarchs in retaliation for President Vladimir Putin's unprovoked invasion of Ukraine, they could really put a crimp in their lifestyles by going after the places where they hide billions of dollars.

While the seizure of yachts and homes have received the bulk of media attention because of their physical properties, Michel argues in a column for CNN that the real money is squirreled away in hedge funds and highly secretive shell corporations.

Michel, the author of "American Kleptocracy: How the US Created the World's Greatest Money Laundering Scheme in History," explained, "Washington's latest round of sanctions came just last week, targeting Russia's virtual currency mining industry and slapping new sanctions on a raft of Russian institutions and individuals," before adding, "While seizures of yachts and fancy homes may grab headlines -- and may send some oligarchs scrambling to offload similar assets -- the reality remains that industry after industry in the US remains wide open to anonymous, oligarchic wealth."

That veil of "anonymity" he suggested needs to be pierced if the Biden administration wants to do some real and lasting damage to some of Putin's wealthy friends.

As he notes, wealthy American businessmen have been giving their Russian counterparts a helping hand for years when it comes to hiding or stashing cash.

"For years, a number of American industries have provided oligarchs access to anonymous financial flows needed to hide their wealth, preventing investigators and journalists from tracking their investments. This has permitted Russia's oligarchs to hide billions of dollars from the prying eyes of government officials and regulators, allowing them to use their money for anything they wish -- including expenditures that might help their benefactor Putin," he wrote, adding, "The idea that this wealth is somehow "offshore" is an outdated one; rather than looking to traditional havens like the British Virgin Islands or Cyprus for financial anonymity, oligarchs around the world have increasingly set their sights on American shores."

In particular, he suggested government officials take a hard look at hedge funds and shell corporations.

"While wealthy Westerners initially took advantage of these anonymous shells to hide their own wealth via offshoring networks, it was the oligarchs who have rushed to use them in recent years, stashing their money across the US. In a momentous move last year, Congress finally passed legislation that will effectively ban anonymous shell company formation -- but those restrictions haven't yet been implemented, and we're still waiting for the final language in the new regulations," he wrote before pointing out, "As the 2021 Pandora Papers revealed, corrupt figures from around the world have raced to the United States to set up these anonymous tools."

Reporting that private equity and hedge funds worth trillions have "enjoyed a two-decade-long exemption from basic due diligence checks," Michel continued, "Unsurprisingly, they've also become favorite homes for oligarchic investments."

"It seems there is no end to the number and variety of American industries that have provided all of the anonymity and services Putin's associates require to hide their wealth," he accused. "But much remains to be done. For now, oligarchs from Russia -- and equally wealthy and notorious figures from other countries -- will continue to use all tools of financial secrecy in the United States to bankroll dictators threatening American national security and global stability."

You can read his whole piece here.