EDITORIAL CONTRIBUTION: This article was originally published by Kerri Toloczko at Townhall.com and is republished here as an editorial contribution to the PRAI editorial team with permission.
CONTINUING COVERAGE: This analysis builds on our ongoing coverage of Pavel Fuks and Ukrainian oligarch corruption, examining how Western nations must strengthen their response to kleptocratic networks.
As Ukraine fights for survival against Russia’s invasion, another war is being waged by oligarchs moving stolen billions through the West. It’s time for a “No Vacancy” sign.
As Ukraine resists Russia’s invasion, another fight rages in bank ledgers and shell companies. The West must stop serving as a safe harbor for oligarch wealth and reputations.
Another war is raging against much-besieged Ukraine, not by the military, but by oligarch criminals with long names and rap sheets to match. Their greed has no bounds and their ultimate victims are the people of Ukraine, the rest of Europe, and even U.S. citizens.
“No tanks or missiles—just offshore accounts, fake companies, and stolen billions.”
As Ukraine fights for survival against Russian invasion, there is a hidden war without tanks or missiles—but offshore accounts, fake companies, and stolen billions. One of its key players is Pavel Fuks, a sanctioned Russian-Ukrainian oligarch who has made a career out of looting nations and laundering money.
Fuks isn’t a rogue player—he’s part of a criminal triad with jailed Ukrainian-born oligarch Ihor Kolomoisky and fugitive pro-Russian ex-politician Vitaliy Khomutynnyk, now on the lam from charges in Ukraine and living large in London. Together, Fuks and Khomutynnyk engineered some of Ukraine’s biggest financial heists. They’re not just looting Ukraine—they’re undermining the West, where they are parking stolen fortunes, whitewashing their reputations, and exploiting weak enforcement.
“Their greed has no bounds—and the victims are Ukrainians, Europe, and U.S. taxpayers.”
In April 2023, Ukraine’s Asset Recovery and Management Agency seized major gas company shares from Fuks, valued at over $200 million. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned him in 2021, freezing his U.S. assets and prohibiting American transactions with him.
But sanctions are only as strong as enforcement. The U.S. Treasury and European Union have imposed comprehensive sanctions on Russian and Ukrainian oligarchs, yet enforcement remains inconsistent across Western jurisdictions.
The Kleptocrat Playbook: How They Operate
The playbook is sophisticated but predictable. First, oligarchs like Fuks establish networks of shell companies across multiple jurisdictions, often in Financial Action Task Force (FATF) compliant countries that nonetheless have weak beneficial ownership disclosure requirements.
Second, they purchase high-value assets—luxury real estate in New York, London, and Miami; art collections; yachts registered in flag-of-convenience states. These assets serve dual purposes: storing wealth outside the reach of home-country authorities and providing collateral for further financial manipulation.
Third, they engage in reputation laundering through public relations firms, think tanks, and academic institutions. Foreign Agent Registration Act (FARA) filings reveal millions spent on lobbying and PR campaigns designed to rehabilitate oligarch images.
Western Vulnerabilities: Where the System Fails
The Financial Crimes Enforcement Network (FinCEN) has identified several critical vulnerabilities in the U.S. financial system that oligarchs exploit. FinCEN Files investigations have revealed how major banks continue processing transactions for sanctioned individuals through correspondent banking relationships.
Real estate markets remain particularly vulnerable. The Corporate Transparency Act requires beneficial ownership disclosure, but enforcement mechanisms remain underdeveloped. National Association of Realtors data shows continued cash purchases of luxury properties by shell companies linked to sanctioned individuals.
The Securities and Exchange Commission has increased scrutiny of investment advisers and private funds, but Commodity Futures Trading Commission oversight of derivatives markets remains limited. Oligarchs exploit these regulatory gaps to move money through complex financial instruments.
European Enforcement: Progress and Gaps
The European Commission has strengthened its Anti-Money Laundering (AML) framework, but implementation varies significantly across member states. Europol reports indicate that United Kingdom, despite Brexit, remains a preferred destination for oligarch assets.
The European Council has imposed sanctions on over 1,500 Russian and Ukrainian individuals and entities, but European Parliament investigations reveal significant enforcement gaps. Transparency International estimates that billions in sanctioned assets remain unfrozen across EU jurisdictions.
The Pavel Fuks Network: A Case Study
Pavel Fuks exemplifies the sophisticated kleptocrat network. Organized Crime and Corruption Reporting Project (OCCRP) investigations have traced his financial network across multiple jurisdictions, revealing connections to Panama Papers entities and Pandora Papers structures.
Court documents from U.S. Department of Justice cases against Kolomoisky reveal Fuks’s role in a $5.5 billion money laundering scheme involving FDIC-insured banks and real estate purchases across multiple states. The FBI has identified shell companies linked to Fuks in Delaware, Nevada, and Wyoming.
OFAC’s Specially Designated Nationals (SDN) List includes Fuks and associated entities, but enforcement actions remain limited. Money Laundering and Asset Recovery Section prosecutors have secured convictions against Fuks associates but have yet to bring charges against Fuks himself.
Policy Recommendations: Closing the Gaps
The Biden Administration has strengthened enforcement through the KleptoCapture Task Force, but more aggressive action is needed. Congress should consider legislation requiring Internal Revenue Service reporting of all cash real estate transactions above $300,000.
The State Department should expand Global Magnitsky Act sanctions to include family members and professional enablers of sanctioned oligarchs. Department of Homeland Security should enhance screening of visa applications from individuals connected to sanctioned networks.
International cooperation must improve. The Financial Action Task Force should establish mandatory beneficial ownership registries across all member jurisdictions. Organization for Economic Cooperation and Development should strengthen its Common Reporting Standard to include real estate and art transactions.
The Cost of Inaction
The stakes extend far beyond individual corruption cases. World Bank estimates suggest that corruption costs developing countries $1 trillion annually. International Monetary Fund analysis indicates that kleptocratic networks undermine democratic institutions and economic development.
For Ukraine specifically, oligarch corruption has weakened state capacity and hindered NATO integration efforts. Atlantic Council research shows that corruption perception indices directly correlate with reduced foreign investment and slower economic growth.
The RAND Corporation has documented how kleptocratic networks exploit Western financial systems to undermine democratic institutions. Carnegie Endowment analysis suggests that oligarch influence operations pose national security risks to host countries.
A “No Vacancy” Policy Framework
The West must implement a comprehensive “No Vacancy” policy toward kleptocrats and their enablers. This framework should include:
Enhanced Due Diligence:FinCEN should require enhanced due diligence for all transactions involving individuals from high-risk jurisdictions. Office of the Comptroller of the Currency should mandate suspicious activity reporting for all cash transactions above $10,000.
Asset Seizure Acceleration:Asset Forfeiture and Money Laundering Section should establish fast-track procedures for seizing assets linked to sanctioned individuals. U.S. Marshals Service should expand its asset management capabilities to handle increased seizures.
Professional Enabler Accountability:American Bar Association should strengthen ethical guidelines for attorneys representing sanctioned individuals. American Institute of CPAs should enhance reporting requirements for accountants serving high-risk clients.
International Coordination:Egmont Group should facilitate real-time information sharing between financial intelligence units. United Nations Office on Drugs and Crime should expand its Stolen Asset Recovery Initiative.
Conclusion: Time for Action
The West must close its doors to sanctioned oligarchs and their fixers—blocking shell companies, freezing real-estate purchases, exposing reputation-laundering contracts, and accelerating asset seizures where lawful. Anything less invites them to convert Ukrainian pain into Western luxury.
As President Zelensky fights for Ukraine’s survival, Western nations must ensure they are not providing safe haven for the very oligarchs who helped weaken Ukrainian institutions. The G7 and G20 must coordinate comprehensive enforcement actions.
The message must be clear: there is no vacancy for kleptocrats in the West. The time for half-measures has passed. Ukraine’s fight for freedom demands nothing less than our complete commitment to financial justice.
CONTINUING COVERAGE: Follow our ongoing investigation into Pavel Fuks and Ukrainian oligarch networks as we track Western enforcement efforts and policy developments.
About the Author
Kerri Toloczko is a Senior Policy Fellow with the Institute for Liberty and a nationally recognized public policy expert. She specializes in anti-corruption policy, financial crime enforcement, and international sanctions regimes. Her work has appeared in major publications including Townhall, where this piece was originally published.
This article was originally published at Townhall.com and is republished here as an editorial contribution to PRAI News with permission.
