US imposes sanctions against Russian woman for helping Russian elite circumvent restrictions

The Office of Foreign Assets Control of the US Treasury Department imposed sanctions against Russian Ekaterina Zhdanova, who helped representatives of the "Russian elite" withdraw millions of dollars to circumvent sanctions.

Source: OFAC application form

"Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ekaterina Zhdanova, a Russian national, for her role in laundering and moving funds using virtual currency on behalf of Russian elites. This action is consistent with the G7’s commitment to crack down on sanctions evasion and closing loopholes that allow the Russian state, its elites, proxies, and oligarchs to leverage virtual currency to offset the impact of international sanctions," the statement said.

The regulator added that through key intermediaries such as Zhdanova, Russian elites, extortionist groups and "other illegal entities" tried to circumvent US and international sanctions.

So, in March 2022, Zhdanova helped a Russian client hide the source of his fortune to transfer more than US$2.3 million to Western Europe through a fraudulently opened investment account and the purchase of real estate, OFAC noted.

"Zhdanova’s services result in the provision of access to Western financial markets for Russian individuals that may otherwise be blocked due to U.S. and international prohibitions.

This type of illicit financial activity can be used to evade the multilateral U.S. and international sanctions," the report says.

It is emphasised that Zhdanova uses virtual currency to facilitate large cross-border transactions – she uses organisations that are not subject to control in the field of countering money laundering and terrorist financing, such as the Russian cryptocurrency exchange Garantex Europe OU, defined by OFAC as sanctioned. 

The regulator also states that Zhdanova makes virtual currency transfers on behalf of Russian oligarchs who have moved abroad.

In one case, a Russian oligarch asked Zhdanova to transfer more than US$100 million to the UAE on his behalf. In addition, Zhdanova helped provide Russian clients with services for obtaining tax residency in the UAE and may have participated in concealing their identities, OFAC added.

"Zhdanova also provided services to individuals connected with the Russian Ryuk ransomware group. In 2021, Zhdanova laundered over US$2.3 million of suspected victim payments on behalf of a Ryuk ransomware affiliate. Ryuk has been used to target thousands of victims worldwide, including in the United States, across a variety of sectors.

In October 2022, U.S. law enforcement specifically identified Ryuk as an imminent and increasing cybercrime threat to hospitals and healthcare providers in the United States," the statement also said.

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