The U.S. government revealed a spending of over $7 million annually on a seized superyacht, urging a judge to allow its auction despite an ongoing ownership dispute. Fiji authorities apprehended the 348-foot, $300 million vessel in May 2022, under a U.S. warrant alleging ownership by Russian billionaire Suleiman Kerimov, who has faced U.S. sanctions since 2014 and 2018 for Russia’s actions in Syria and Ukraine.
Eduard Khudainatov, a former head of Russian state oil and gas company Rosneft, contests the yacht’s seizure, claiming ownership and arguing that since he has not been sanctioned, the yacht cannot be forfeited. Federal prosecutors in Manhattan argue that the monthly $600,000 maintenance cost is excessive. They have also informed the judge that talks to have Khudainatov cover the maintenance bill have broken down.
Prosecutors assert that Khudainatov is serving as a “straw owner” to mask Kerimov’s involvement and that the maintenance payments are crucial for maintaining the yacht’s value. Khudainatov’s lawyers have until Feb. 23 to respond to the prosecutors’ request. They claim that the motion to sell the vessel is “premature” and urge the judge to wait until determining the constitutionality of the seizure.
The yacht’s seizure came amidst heightened U.S. sanctions enforcement targeting Putin-affiliated individuals, aiming to pressure Russia into ending its war on Ukraine. If the U.S. government successfully auctions the yacht, the sale proceeds would likely be transferred to Ukraine.
Prosecutors argue that Kerimov violated U.S. sanctions by making over $1 million in maintenance payments for the yacht through the U.S. financial system. This makes the vessel, currently docked in San Diego, subject to forfeiture. Kerimov and his family are valued at $10.7 billion by Forbes magazine, with his fortune amassed through Russian gold miner Polyus, from which he is no longer a shareholder.
Reporting by Luc Cohen in New York; editing by Jonathan Oatis
