A mega-yacht seized by U.S. authorities from a Russian oligarch is costing the federal government nearly $1 million a month to take care of, in line with latest court filings.
The U.S. Department of Justice is searching for permission to sell a 348-foot yacht called Amadea, which it seized in 2022, alleging that it was owned by sanctioned Russian billionaire Suleiman Kerimov. The federal government said it desires to sell the $230 million yacht as a result of the “excessive costs” of maintenance and crew, which it said could total $922,000 a month.
“It’s excessive for taxpayers to pay nearly a million dollars per month to take care of the Amadea when these expenses may very well be reduced to zero through [a] sale,” in line with a court filing by U.S. prosecutors on Friday.
The monthly charges for Amadea, which is now docked in San Diego, California, include $600,000 per month in running costs: $360,000 for the crew; $75,000 for fuel; and $165,000 for maintenance, waste removal, food and other expenses. Additionally they include $144,000 in monthly pro-rata insurance costs and special charges including dry-docking fees, at $178,000, bringing the overall to $922,000, in line with the filings.
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The battle over Amadea and the costs to the federal government highlight the financial and legal challenges of seizing and selling assets owned by Russian oligarchs after the country’s invasion of Ukraine. European Commission President Ursula von der Leyen said last week that the European Union should use profits from greater than $200 billion of frozen Russian assets to fund Ukraine’s war effort.
Her comments echoed government calls within the spring of 2022 to freeze the yachts, private jets and mansions of Russian billionaires in hopes of putting pressure on Russian President Vladimir Putin and raising money for the war effort.
Yet, nearly two years later, the legal process for proving ownership of the Russian assets and selling them has proven to be much more time-consuming and expensive. In London, Russian billionaire Eugene Shvidler has waged a court battle over his private jets that were impounded, and Sergei Naumenko has been appealing the detention of his superyacht Phi.
Mega-yacht Amadea of sanctioned Russian oligarch Suleiman Kerimov, seized by the Fiji government on the request of the U.S., arrives on the Honolulu Harbor, Hawaii, on June 16, 2022.
Eugene Tanner | AFP | Getty Images
The battle over Amadea began in April 2022, when it was seized in Fiji on the request of the U.S. government, in line with the court filings.
Though the U.S. alleges that the yacht is owned by Kerimov, who made his fortune in mining, attorneys for Eduard Khudainatov, an ex-Rosneft CEO who has not been sanctioned, say he owns the yacht, and have sought to take back possession of the vessel.
In court filings, Khudainatov’s attorneys have objected to the U.S. government’s efforts to sell the yacht, saying a rushed sale could lead on to a distressed sale price and that the upkeep costs are minor relative to the potential sale value.
Khudainatov’s attorneys refuse to pay the continued maintenance costs so long as the federal government pursues a sale and forfeiture. Nonetheless, they are saying their client will reimburse the U.S. government for the greater than $20 million already spent to take care of the yacht if it’s returned to its proper owner.
In court papers, the federal government says Kerimov disguised his ownership of Amadea through a series of shell corporations and other owners. They are saying emails between crew members show Kerimov “was the useful owner of the yacht, regardless of the titleholder of the vessel.”
The emails show that Kerimov and his family ordered several interior improvements of the yacht, including a latest pizza oven and spa, and that between 2021 and 2022, when the boat was seized, “there have been no guest trips on the Amadea that didn’t include either Kerimov or his members of the family,” in line with the court filings.
The federal government also says Kerimov has been attempting to sell Amadea for years, so a sale could be consistent with his intent.
“This will not be a situation by which a court could be ordering sale of a precious heirloom that a claimant desperately wishes to maintain for sentimental reasons,” the federal government said in filings.
Even when Amadea were sold quickly, the proceeds would not routinely go to the federal government. Under law, the cash could be held while Khudainatov and the federal government proceed their battle in court over the ownership and forfeiture.
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