Sovcombank Co-Owner Secretly Invested Millions in U.S. Real Estate as Sanctions Loomed
WASHINGTON D.C. – Sergey Khotimsky, a co-owner of Sovcombank, one of Russia’s largest private banks, quietly invested millions of dollars in U.S. real estate through shell companies in teh years leading up to and following Russia’s 2022 invasion of Ukraine, according to a joint inquiry by iStories and The Moscow times. The purchases, totaling over $16 million, included properties in Miami, Florida, and Los Angeles, California, and appear to have been structured to obscure Khotimsky’s ownership as Western governments prepared to impose sanctions on Russian individuals and entities linked to the Kremlin.
The timing of these investments, coupled with Sovcombank’s subsequent lobbying efforts in Washington D.C. to avoid sanctions, raises questions about whether Khotimsky and the bank were attempting to shield assets from potential seizure. While not illegal in itself, the pattern of investment and lobbying underscores how Russian elites sought to mitigate the financial impact of anticipated sanctions following the outbreak of war in Ukraine, highlighting the challenges faced by authorities in tracking and freezing illicitly obtained wealth.
The investigation reveals that Khotimsky utilized a network of offshore companies registered in the British virgin Islands and Cyprus to purchase the properties. Records show that these companies, including Breakers Row LLC and Emerald Bay Estate LLC, were linked to khotimsky through a complex web of ownership and control. A Miami condo purchased in 2021 for $6.2 million and a Los Angeles property acquired in 2022 for $9.8 million are among the identified assets.
According to Kimberly Donovan, former deputy director of the U.S. Treasury department’s Financial Crimes Enforcement Network (FinCEN), Russian elites were actively transferring assets to family members, close associates, and ex-wives “two weeks or a month before Russia’s invasion of Ukraine.” This suggests a coordinated effort to preemptively move wealth out of reach of potential sanctions.
Sovcombank was eventually sanctioned by the U.S. in May 2023, but the timing and structure of Khotimsky’s real estate purchases suggest a degree of foresight and preparation. Ilya Shumanov, a board member of the anti-corruption association Transparency International – Russia, stated, “Getting Sovcombank and it’s executives on the U.S. sanctions list was an expected outcome – it was obvious they were directly connected to the Russian state.In my view, they were definitely prepared for this.”
Prior to the imposition of sanctions, Sovcombank engaged Mercury Public Affairs, a U.S. lobbying firm, and former U.S. Senator David Vitter to argue against sanctions. Vitter stated in a filing that sanctions on Sovcombank “will have serious negative consequences for the market,” citing the bank’s “deep ties with the U.S. and Western institutions.”
Khotimsky and Elena Baskina, another individual identified in the investigation, did not respond to inquiries. In a recent interview with Vedomosti, Khotimsky expressed a negative view of media outlets designated as “foreign agents” by Russian authorities. Baskina denied any involvement in attempts to hide assets or arrange false ownership.
