By Robert Frank—
CNBC
Maintaining a megayacht seized by U.S. authorities from a Russian oligarch costs the government nearly $1 million a month, according to court documents.
The Department of Justice requested permission to sell the
Amadea
,
a 348-foot yacht he seized in 2022, which was owned by sanctioned Russian billionaire Suleiman Kerimov.
[These are the superyachts seized from Russian oligarchs]
The government has indicated it wants to sell the $230 million vessel due to “excessive costs” for maintenance and crew, which it said amount to $922,000 a month.
“It is excessive for taxpayers to pay almost a million dollars a month to maintain the
Amadea
when these expenses could be reduced to zero with [its] sale,” reads a court filing by US prosecutors, unsealed on Friday.
The yacht 'Amadea' of sanctioned Russian oligarch Suleiman Kerimov arrives at the port of Honolulu on June 16, 2022. Eugene Tanner / AFP - Getty Images file
Monthly expenses for the
Amadea
, which is now docked in San Diego, California, include $600,000 a month in operation: $360,000 for crew, $75,000 for fuel, and $165,000 for maintenance, waste disposal, food and other expenses.
They also include 144,000 in insurance and special charges.
The battle over the
Amadea
and the high costs for the government highlight the financial and legal challenges of seizing and selling assets owned by Russian oligarchs following Vladimir Putin's invasion of Ukraine.
European Commission President Ursula von der Leyen declared last week that the European Union should use the proceeds of more than $200 billion in frozen Russian assets to finance Ukraine's war effort.
His comments echoed calls by the government 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.
However, almost two years later, the legal process to prove ownership of Russian assets and sell them has proven to be much longer and more expensive.
In London, Russian billionaire Eugene Shvidler has fought a court battle over his private jets that were seized, and Sergei Naumenko has appealed the detention of his superyacht
Phi
De.
[These are the superyachts seized from Russian oligarchs]
The dispute over the
Amadea
began in April 2022, when it was seized in Fiji at the request of the United States government, according to court records.
Although the United States alleged that the yacht is owned by Kerimov, who made his fortune in mining, lawyers for Eduard Khudainatov, the former CEO of Rosneft who has not been sanctioned, claimed that he is the owner and have sought to regain possession of the yacht. boat.
In their court briefs, Khudainatov's lawyers have opposed U.S. efforts to sell the yacht, arguing that a hasty sale could result in an exorbitant price and that maintenance costs are minor relative to the transaction value. potential.
Khudainatov's lawyers refused to pay maintenance costs while the government goes ahead with the sale and seizure.
However, they stated that
their client will reimburse the more than $20 million
already spent on the maintenance of the yacht if it is returned to its owner.
In court documents, the government claimed that Kerimov concealed his ownership of the Amadea through a series of shell companies and other individuals.
They specified that emails between crew members demonstrate that Kerimov “was the effective owner of the yacht, independently of the owner of the vessel.”
The emails show that Kerimov and his family ordered several interior upgrades to the yacht, including a new pizza oven and a spa, and that between 2021 and 2022, when the ship was seized, “there were no guest voyages on the Amadea that were not include Kerimov or members of his family,” according to court records.
The Government also noted that Kerimov has been trying to sell the Amadea for years, so
a sale would be in line with his intention.
“This is not a situation in which a court orders the sale of a treasured relic that a plaintiff desperately wants to keep for sentimental reasons,” the government said in the documents.
Even if Amadea were sold quickly, the profits would not automatically go to the Government.
Under the law, the money would be held while Khudainatov and the United States continue their court battle over ownership and forfeiture.