Narrator: This superyacht is worth
almost $100 million.
It's owned by a sanctioned Russian oligarch,
and in April 2022,
FBI agents and Spanish officials seized it.
For years, the oligarchs didn't have much trouble
buying up boats, jets, and mansions in places like this.
That's if they didn't end up in prison,
exiled, or mysteriously dead.
Around 60% of the wealth of the richest Russians
is held offshore.
But the war in Ukraine has turned the world
against members of this opulent uber-class.
Erich: It's caused a lot of chaos.
They've lost access to their accounts.
Their family members have had their own accounts frozen,
or restricted, or been kicked out of their banks.
Narrator: So where did all the money come from?
And is there still a chance
of the oligarchs holding onto it?
The year was 1992, and new business opportunities
were emerging from the ashes of the Soviet Union.
The president of the new Russian Federation,
Boris Yeltsin, started privatizing companies that had been
under communist state control.
It was as if the whole country was up for sale.
The government issued millions of these vouchers
that Russians could use to buy shares in companies.
Each voucher was worth about two months' wages at the time.
Stephen: There were already some people
who had amassed small fortunes.
They were the ones who were
in the best position to take advantage
of the new opportunities that were available.
Narrator: Businessman Roman Abramovich was one of them,
and Boris Berezovsky, a car dealership owner, another.
More than 15,000 companies were privatized
between 1992 and 1994.
And as these companies grew,
so did the wealth of their owners.
And that's how the oligarchs were born.
But Russia's rich were about to get much richer.
In 1995, the government really needed cash.
Stephen: Oligarchs managed to edge their way in the door.
Narrator: They were part of the group
that loaned the government hundreds of millions of dollars
in exchange for a slice of some
of Russia's biggest enterprises.
The deal was if the government couldn't pay back the loans,
the shares would be auctioned off,
which is what ended up happening.
The oligarchs ended up with vast business empires,
some at well below market rate.
The bank Menatep, run by Mikhail Khodorkovsky,
acquired oil company Yukos.
Abramovich, with the help of Berezovsky,
took control of another oil company.
The newly privatized businesses
and their oligarch owners did very well.
Stephen: They were thought to be somehow keeping the system afloat.
Narrator: It was reported the oligarchs
were behind the funding of Yeltsin's reelection in 1996.
They also helped launch the career of his successor,
Vladimir Putin.
But he would turn out to be no friend of the oligarchs.
TV reporter: The Russian president has warned
that the country's superrich are not above the law.
The authorities have been getting tough with the oligarchs.
Narrator: Putin didn't want the oligarchs
meddling in his politics.
The wealthiest of them all, Mikhail Khodorkovsky,
was imprisoned for alleged tax crimes
after openly challenging Putin --
charges which he has denied.
Stephen: The message that was sent to other oligarchs was,
I'll let you run your businesses,
and you let me run the country.
Narrator: Another critic, Berezovsky, fled to the UK,
while Abramovich stayed loyal,
serving as a governor in northeast Russia.
It wasn't long before all this Russian money
started cropping up overseas.
Berezovsky bought this house in the UK
and this one in the south of France.
Abramovich went one step further.
He bought Chelsea Football Club for around $200 million,
along with a vast London mansion
and about 70 other properties in the UK.
Berezovsky remained a vocal critic of Putin.
Putin's Russia is very dangerous for democracy.
Narrator: He was found dead in his home
in England in 2013.
Investigators recorded an open verdict,
which means they could not say if he died by suicide
or was murdered.
Back in Russia, a new class of oligarchs emerged.
Remember Khodorkovsky?
The reins of his oil empire eventually went
to a man known in Moscow as Darth Vader.
Igor Sechin is reported to be a former KGB officer,
like Putin himself.
This new class of oligarchs is known
as the siloviki, or strongmen.
Today's oligarchs are all essentially beholden to Putin,
because their business depends on the state.
Narrator: The number of Russians on the Forbes rich list
rose from zero in 1996 to over 100 in 2014.
And the oligarchs certainly knew how to splash their cash.
This part of London was nicknamed "Red Square"
because so many wealthy Russians moved in.
and parts of the French Riviera became known
as the "Bay of Billionaires."
Then there were the floating palaces,
soccer teams, and private jets.
But their fortunes were about to take a turn.
Russia's annexation of Crimea in 2014
triggered sanctions on individuals with close ties
to the Kremlin, including Sechin.
But these were nothing in comparison to the sanctions storm ...
Sanctions.
Narrator: ... that was to hit the oligarchs in 2022.
What's different about it is just the speed
and aggressiveness with which these sanctions
have been imposed.
Narrator: The brutal invasion of Ukraine
launched by Putin in February
caused an international outcry.
Narrator: Sanctions came thick and fast,
aimed at restricting the wealth and movement
of those with links to the Kremlin.
We're coming for your ill-begotten gains.
Narrator: In a matter of weeks,
the US sanctioned more than 400 people and entities.
Our clients are all scrambling
to understand what these new restrictions on them are,
what they have to do to comply.
Narrator: Lawyers like Erich Ferrari advise people
and companies that have been sanctioned.
Erich: The US government has determined there was a threat,
in this case, Russia's harmful foreign activities,
which allows them to designate parties who are engaged
in certain types of conduct.
Narrator: The sanctions hit not just government officials,
but also executives of state-owned enterprises.
The US Treasury only needs a reasonable cause
to believe that they meet the designation criteria.
The two biggest factors are proximity to Putin
and doing Putin's bidding,
set up against what's the impact going to be,
and can we mitigate it properly?
Narrator: The UK and the EU
have their own sanctions lists,
as do a handful of other countries.
Oligarchs in London will have nowhere to hide.
All of these measures will significantly
harm Putin's ability to finance his war.
Narrator: As the net tightened,
the race was on for oligarchs to find safe havens
for their money, boats, and planes.
Abramovich could see the storm coming.
He reportedly shifted an investment company
to a close associate as Russia was invading Ukraine.
About two weeks later, he was added
to the UK's sanctions list for having a stake
in a company accused of producing steel for Russian tanks,
which the company denies.
His UK assets were also frozen.
The majority of the wealth of these people
in in publicly-traded companies.
There might be complicated corporate structures around them,
but blocking up those holdings
and impacting those companies has an effect,
and that's just hard to dodge.
Narrator: Some of Abramovich's business interests
have been harder to track down.
Take Matterhorn Capital,
which has been linked to Abramovich.
It was first registered in the Cayman Islands
before being moved to the British Virgin Islands.
Both are British overseas territories
known for helping wealthy people hide their money.
And then, it moved to the island of Jersey.
But in April 2022, Jersey froze assets worth more
than $7 billion connected to Abramovich.
That's around half of his estimated wealth.
He won't even be able to profit
from the sale of his beloved Chelsea Football Club.
Meanwhile, Abramovich has done all he can
to distance himself from the Kremlin,
even playing a role as mediator in peace talks
between Ukraine and Russia.
But after one of these meetings, he and other negotiators
reportedly suffered symptoms of poisoning.
The US has so far spared Abramovich from its sanctions list,
but the EU hasn't.
About a dozen properties in France linked
to Abramovich were seized.
In fact, the EU and UK have banned him from entering.
He was spotted at Tel Aviv airport
a few days after being sanctioned.
A jet linked to him then flew to Istanbul and on to Moscow.
Two of his yachts were scrambled to Turkey,
beyond the reach of Western sanctions.
Maritime trackers show yachts belonging to wealthy Russians
also fleeing to places like Montenegro and the Maldives.
But Sechin wasn't quick enough.
French authorities seized the superyacht, Amore Vero,
near Marseilles in March 2022
as its crew was preparing to set sail.
The French say it belongs to Sechin, which he denies.
Another boat that's also linked to Sechin
was detained by Spanish authorities.
Brian: He fundamentally will have trouble conducting any sort
of cross-border transaction, period.
He's probably confined mostly to living in Russia.
Narrator: Fast boats and homes can be hard to hide,
but much of the oligarchs real wealth
is carefully hidden away.
Many of their assets and businesses are registered
under a different name as trusts or shell companies
based in offshore tax havens.
Brian: This is oftentimes a game of whack-a-mole.
That's a lot of what sanctions is.
Narrator: In the US, banks are required
to name the beneficial owner of an account,
while private equity firms and hedge funds are not.
But it's been getting harder for the oligarchs
to conceal their wealth.
Since 2016, the UK has required that the beneficial owners
of companies be named.
The Cayman Islands said it froze $7.3 billion in assets
belonging to sanctioned Russians.
Once they are blacklisted,
the reputational damage can last a lifetime.
And no amount of money can buy that back.
I have clients who are off of the sanctions list,
who've been removed years ago,
who still can't get a bank account in UAE.
Or whose family members still can't get a bank account,
although they were never sanctioned.
Narrator: Sanctioned oligarch Mikhail Fridman
feels he has been unfairly targeted.
We do not have any impact for political decision.
Narrator: According to Forbes,
his wealth has shrunk by more than $3.5 billion.
By April 2022, 18 oligarchs had dropped off
the Forbes billionaires list
because of the avalanche of sanctions.
Sanctions may be hurting the oligarchs,
but they are not the real target.
That would be Vladimir Putin and his war machine.
And so far, Putin appears unfazed
as he doubles down on his invasion of Ukraine.
Erich: Over the past several years,
the Russian government and the Russian president
had kind of insulated themselves from the influence
of elite businesspersons in that country.
Narrator: In the end, the biggest threat
of all to the oligarchs may not be the West.
Stephen: These are people who are so dependent on Putin,
that what they're worried about most
is that Putin's own power over them will actually increase
as a result of sanctions, because they have nowhere to go.
They have to rely on Putin's goodwill.