US Spending $7 Million a Year to Maintain Yacht Seized from Russian Oligarch

The U.S. government said it is spending more than $7 million a year to maintain a superyacht it seized from a sanctioned Russian oligarch, and urged a judge to let it auction the vessel before a dispute over its ownership is resolved.

Authorities in Fiji seized the 348-foot (106-meter), $300 million Amadea in May 2022, pursuant to a U.S. warrant alleging it was owned by Suleiman Kerimov, a multibillionaire sanctioned by the U.S. Treasury Department in 2014 and 2018 in response to Russia's activities in Syria and Ukraine.

Efforts to auction the yacht are being challenged by Eduard Khudainatov, who led Russian state oil and gas company Rosneft from 2010 to 2013.

Khudainatov claims ownership of the Amadea, and has said it cannot not be forfeited because he has not been sanctioned.

In a court filing late on Friday, federal prosecutors in Manhattan told U.S. District Judge Dale Ho that the $600,000 average monthly maintenance bill for the Amadea has been "excessive," justifying an auction. They also said talks to have Khudainatov pay for the yacht's upkeep have broken down.

Prosecutors have said in previous court filings that Khudainatov is acting as the Amadea's "straw owner" to disguise Kerimov's role, and that maintenance payments are essential to preserving a yacht's value.

Khudainatov has until Feb. 23 to reply to prosecutors' request. In a statement, his lawyers said the motion to sell the vessel was "premature" and urged Ho to deny it until he "determines whether the seizure was unconstitutional."

The seizure came as Washington ramped up sanctions enforcement against people close to Russian President Vladimir Putin to pressure Moscow to halt its war against Ukraine.

If the U.S. government succeeded in auctioning the yacht, it would likely eventually transfer sale proceeds to Ukraine.

Prosecutors have said Kerimov violated U.S. sanctions by making more than $1 million in maintenance payments for the Amadea through the U.S. financial system, making the vessel now docked in San Diego subject to forfeiture.

Kerimov and his family are worth $10.7 billion, according to Forbes magazine. He amassed his fortune through Russian gold miner Polyus, though he is no longer a shareholder.

(Reuters - Reporting by Luc Cohen; editing by Jonathan Oatis)