A megayacht seized by US authorities from a Russian oligarch is costing the government nearly $1 million a month to maintain, new court filings have revealed.
The US Department of Justice is seeking permission to sell a 100-meter yacht named Amadea that it seized in 2022, claiming it was owned by sanctioned Russian billionaire Suleiman Kerimov. The government said it wants to sell the $230 million yacht because of the “excessive costs” of maintenance and crew, which it said could reach $922,000 a month.
“It is excessive that taxpayers pay almost $1 million a month to maintain Amadea, when this expenditure could be reduced to zero by [a] sale,” according to a lawsuit filed by U.S. prosecutors on Friday.
Monthly costs for Amadea, now based in San Diego, California, include $600,000 per month in operating expenses: $360,000 for crew; $75,000 for fuel; and $165,000 for maintenance, garbage disposal, food and other expenses. They also include $144,000 in monthly pro-rata insurance costs and special costs including dry dock fees, at $178,000, bringing the total to $922,000, according to the documents.
The battle for Amadea and the costs to the government highlight the financial and legal challenges of seizing and selling assets owned by Russian oligarchs following the country's invasion of Ukraine. European Commission President Ursula von der Leyen said last week that the European Union should use profits from more than $200 billion in frozen Russian assets to finance Ukraine's war efforts.
Her comments echoed government calls in spring 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, almost two years later, the legal process to prove ownership of the Russian assets and sell them has proven to be much more time-consuming and expensive. In London, Russian billionaire Eugene Shvidler has faced a lawsuit over his private jets being seized, and Sergei Naumenko has appealed the detention of his superyacht Phi.
Sanctioned Russian oligarch Suleiman Kerimov's megayacht Amadea, seized by the Fijian government at the request of the US, arrives at the port of Honolulu, Hawaii on June 16, 2022.
Eugene Tanner | AFP | Getty Images
The battle for Amadea began in April 2022, when it was seized in Fiji at the request of the US government, court documents show.
Although the US claims the yacht is owned by Kerimov, who made his fortune in mining, lawyers for Eduard Khudainatov, an ex-CEO of Rosneft who has not been sanctioned, say he owns the yacht and have tried to take back possession of the yacht. ship.
In court filings, Khudainatov's lawyers have objected to the U.S. government's efforts to sell the yacht, saying a hasty sale could lead to a distressed sale price and that maintenance costs would be small compared to the potential resale value.
Khudainatov's lawyers are refusing to pay ongoing maintenance costs while the government pursues a sale and forfeiture. However, they say their client will reimburse the US government for the more than $20 million already spent on maintaining the yacht if it is returned to the right owner.
In court filings, the government says Kerimov disguised his ownership of Amadea through a series of shell companies and other owners. They say emails between crew members show that Kerimov “was the ultimate owner of the yacht, regardless of ownership of the vessel.”
The emails show that Kerimov and his family ordered several improvements to the yacht's interior, including a new pizza oven and spa, and that between 2021 and 2022, when the boat was seized, there were “no guest voyages on the Amadea did not involve Kerimov or his relatives,” the court documents said.
The government also says Kerimov has been trying to sell Amadea for years, so a sale would be consistent with his intentions.
“This is not a situation in which a court would order the sale of a precious heirloom that a plaintiff is desperate to keep for sentimental reasons,” the government said in the filings.
Even if Amadea were sold quickly, the proceeds would not automatically go to the government. Under the law, the money would be held while Khudainatov and the government continued their battle in court over ownership and forfeiture.
Don't miss these stories from CNBC PRO: