In a stunning case that highlights the gravity of international sanctions violations, two individuals have recently pleaded guilty to engaging in a conspiracy to launder money and promote Russian sanctions violations. This complex and illicit affair involves the president of Metalhouse LLC, John Can Unsalan, and Sergey Karpushkin, a Belarusian resident. Together, they orchestrated a web of transactions totaling hundreds of millions of dollars with sanctioned individuals and entities. Let's delve into the details of this high-profile story and its far-reaching implications.
At the heart of this unfolding drama is the sanctioned Russian oligarch, Sergey Kurchenko, who has been on the radar of the Department of the Treasury Office of Foreign Assets Control (OFAC) since 2015. Kurchenko faced sanctions for his involvement in misappropriating Ukrainian state assets, a matter of great economic significance.
Both John Can Unsalan and Sergey Karpushkin stand accused of committing serious offenses. Their actions directly contravened the International Emergency Economic Powers Act (IEEPA) and were in clear violation of U.S. sanctions. Unsalan and Karpushkin engaged in trade with sanctioned individuals and companies owned by Kurchenko, despite knowing that such transactions were expressly prohibited by U.S. sanctions regulations. Notably, no licenses from OFAC were sought or issued for these transactions, magnifying the illegality of their activities.
John Can Unsalan, also known as Hurrem Can Unsalan, was the president of Metalhouse LLC, a key player in this scandal. Between July 2018 and October 2021, Unsalan conspired with others to transfer a staggering sum—over $150 million—to Kurchenko and his sanctioned companies. These funds were used to procure steelmaking equipment and raw materials, all while blatantly disregarding U.S. sanctions. Unsalan and his associates even received tens of thousands of tons of metal products from these companies, with an agreement to share profits from these unlawful transactions.
Sergey Karpushkin, a resident of the United States and a Belarusian citizen, played a significant role in this illicit scheme. Between approximately July 2017 and August 2020, Karpushkin conspired with others to purchase and receive over $139 million in metal products from two companies known to be owned and controlled by Kurchenko. Acting through the Florida-based company Metalhouse LLC, Karpushkin entered into contracts and purchase orders for pig iron, steel billets, and wire rods from these companies. Similar to Unsalan, Karpushkin knowingly concealed the source and origin of the goods from U.S. banks and government officials, fully aware that they lacked the necessary authorization or license from OFAC for such transactions.
The Guilty Pleas:
Both Unsalan and Karpushkin have taken responsibility for their actions. Unsalan pleaded guilty before U.S. District Judge Wendy W. Berger in Orlando, Florida, to one count of conspiracy to commit money laundering to promote violations of the IEEPA.
As part of his plea agreement, he also agreed to forfeit a staggering $160,416,948.56 in proceeds derived from the conspiracy. While the maximum sentence for his charge is 20 years in prison, the final sentence will be determined by a federal district court judge, considering various factors and sentencing guidelines.
Sergey Karpushkin followed suit, pleading guilty to one count of conspiring to violate the IEEPA and to commit international promotional money laundering before U.S. Magistrate Judge Embry J. Kidd in Orlando, Florida. His plea includes an agreement to forfeit $4,723,625 in proceeds acquired from the conspiracy. As with Unsalan, a federal district court judge will determine his sentence.
The Metalhouse LLC case serves as a stark reminder of the vigilance of regulatory bodies like OFAC in enforcing sanctions and bringing those who violate them to justice. It also underscores the necessity for businesses and individuals to exercise due diligence and adhere to international laws and regulations.
In the coming months, the legal system will decide the fates of Unsalan and Karpushkin. However, one thing remains clear: this story is a powerful warning to those who attempt to evade sanctions for financial gain. The consequences are severe, and justice will ultimately prevail.