US prosecutors can seize $5.4 million belonging to sanctioned Russian businessman Konstantin Malofeev, a judge ruled Thursday, clearing the way for the funds to be used to help rebuild war-torn Ukraine.

War in Ukraine: Russian missile attack on the city of Kostyantynivka, Donetsk regionPhoto: Agerpres

The decision by U.S. District Judge Paul Gardef in federal court in Manhattan was the first order to seize assets of a Russian oligarch since the Justice Department created a task force in 2022 to seize the finances of allies of Russian President Vladimir Putin in response to the invasion of Ukraine.

In late 2022, US President Joe Biden signed a law allowing the Department of Justice to transfer some seized assets to the State Department for aid to Ukraine. US law limits how the government can use seized assets.

The US authorities accused Malofeev, the owner of the Orthodox Tsargrad TV channel, of financing separatists in Crimea, which was annexed by Russia in 2014.

Malofeev, who has denied funding the separatists, was sanctioned by Washington in 2014 and accused of violating sanctions in 2022. He could not be reached for comment and is believed to be at large in Russia.

Andrew Adams, head of the Justice Department’s KleptoCapture task force, said last month that the first seized funds could be transferred to Ukraine soon.

“These sums are small compared to the cost of the Russian disaster to the people and land of Ukraine, but the contribution is significant,” Adams said in a speech at the Hudson Institute, a think tank in Washington, DC.

Prosecutors said in court documents late last year that they were entitled to the money in Malofeev’s Sunflower Bank account in Denver because he tried to transfer it to a business partner in violation of U.S. sanctions.

Because Malofeev did not contest the forfeiture request, prosecutors said Thursday that the funds should be forfeited by default.

The KleptoCapture task force has temporarily seized other oligarchs’ assets, including a $300 million yacht, but has yet to receive permanent seizure orders.

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