In the first criminal proceeding against a Russian oligarch since the start of the Ukraine invasion, US prosecutors have charged Konstantin Malofeyev, an arch-conservative with close ties to Russian President Vladimir Putin, for sanctions violations. The Kremlin crony’s business interests, from Greece to Africa to annexed Crimea, reveal the scope of his ideological intent – aided by willing, conservative Western business partners.
Nearly a year after the 2014 annexation of Crimea, an American TV news director and former Fox News employee updated Konstantin Malofeyev, his Russian oligarch boss, about a board briefing for a new Russian TV station.
The board news policy, wrote former Fox News director Jack Hanick, was meant “to implement your vision and to provide you with information for you to make decisions …You are the founder and chief architect of the project. We, as board members, have the responsibility to direct the staff to implement your instructions.”
The allegations, made in a 21-page indictment in a New York court, charges Moscow-based businessman Malofeyev of violating US sanctions in the first criminal proceeding against a Russian oligarch since the February 24 start of the Ukraine invasion.
Malofeyev, an investor and ardent supporter of Russian President Vladimir Putin, is accused of attempting to tap $10 million of frozen US assets with the help of his American employee, Hanick, an experienced TV news executive and supporter of Donald Trump.
The indictment provides a detailed account of how Malofeyev, a Russian nationalist and founder of Orthodox news channel Tsargrad TV, attempted to evade US sanctions.
Malofeyev was sanctioned by the US Treasury Department in 2014 for financing Russians promoting separatism in Crimea. Although the sanctions barred him from doing business with US citizens, prosecutors say Malofeyev evaded those restrictions by hiring Hanick to work for him in networks in Russia and Greece, and enlisted the US national’s help in trying to acquire a TV station in Bulgaria.
It was all part of an effort to spread pro-Russia propaganda throughout Europe, according to the US Justice Department.
Announcing the latest crackdown on Wednesday, US Deputy Attorney General Lisa Monaco warned that, “we have our eyes on every yacht and jet. We have our eyes on every piece of art and real estate purchased with dirty money and on every bitcoin wallet filled with proceeds of theft and other crimes.”
Hanick, a high-level director who helped launch Fox News, was arrested in London last month and is awaiting extradition proceedings.
Russia embraces Orthodox Christianity
If Hanick, as the US indictment alleges, was willing to “implement” his Russian employer’s “vision” at the TV station where he was hired, it was because the former Fox News director was ideologically in sync with Malofeyev’s conservative philosophy.
On the night of Trump’s victory in the 2016 election, Hanick was in Moscow, attending a pro-Republican soirée, where the organisers unveiled a massive portrait of the victorious US presidential candidate, according to US magazine Rolling Stone.
In an interview at the event, which was posted on YouTube, Hanick explained that “America has been founded on Christian principles and now America is moving away from Christianity.” Sitting next to the newly unveiled portrait of Trump – the subject of several sexual misconduct lawsuits – Hanick noted that, “America was losing its moral core and fibre … Now Russia, on the other hand, has been embracing Orthodox Christianity.”
An investment banker who says he “found God” during his university years, Malofeyev is a devout Orthodox Christian in a country that, under Putin, has leapt from communism to the church, with the Kremlin and the Moscow Patriarchate operating in revivalist synergy.
As the founder of a private equity firm, Marshall Capital Partners, Malofeyev [sometimes spelled Malofeev] used his religious contacts to enlarge his wealth, investing in Russian telecoms giant Rostelecom while his fellow Orthodox friend, Igor Shchegolev, was telecoms minister, according to the Financial Times.
In 2015, when he launched Tsargrad TV – with Hanick’s Fox News expertise – the new Russian Orthodox TV station also began broadcasting daily on Spas, a religious channel run by the Orthodox church.
From Moscow to Athens with a share certificate
It was after the successful launch of the Russian TV network that Malofeyev handed Hanick the task of starting a TV station in Greece and acquiring a Bulgarian news channel. The US indictment alleges that the pair conspired to illegally transfer Malofeyev’s frozen $10 million in a Texas investment bank to a business associate in Greece in violation of US sanctions that were passed shortly after the 2014 Crimea annexation.
Malofeyev denied the charges in a phone interview with the Financial Times from Russia earlier this week, insisting that he has not had assets in the US since 2014 and dismissing the legal action against him as “comical”.
US prosecutors however say a share certificate for Malofeyev’s funds – which was accessed through a shell company in the Seychelles – was fraudulently backdated to make it appear as if it had gone through in June 2014, prior to the imposition of sanctions.
The indictment has details of a 2015 trip by Hanick from Moscow to Athens when the US national physically carried the share certificate and transferred the funds to a Greek associate for the price of just $1.
The case against Hanick is still pending.
‘God’s will’ in Crimea
In addition to his staunch Orthodox Christian faith, Malofeyev is a self-confessed royalist who views Crimea as an intrinsic part of the Russian empire, which Putin, in his role of Tsar 2.0, is seeking to reinvent.
Malofeyev’s engagement with Crimea, a peninsula historically controlled by various empires, appears to be mystical.
By his own telling, the connection was fixed by a miracle. The narrative starts in January 2014, months before Russian soldiers appeared in Crimea, when Malofeyev was travelling with the Russian patriarch, taking ancient Christian relics on a tour through Russia.
Crimea, according to the Russian oligarch, was not on the travel agenda. But when they did stop in the Crimean capital, Sevastopol, around 100,000 people – a third of the local population – gathered to pray with the relics. “It was one prayer from all the people: for Sevastopol to once more be part of Russia. God’s will,” Malofeyev told the Financial Times in a July 2014 interview.
When Crimea did become part of Russia in an annexation not recognised by the international community, the God-fearing Malofeyev was immediately put on US and EU sanctions listings.
Historical theme park in Crimea
But the EU sanctions did not deter a fellow conservative Frenchman from seeking to do business with Malofeyev.
Enter Philippe de Villiers, a Eurosceptic French politician and businessman who is also the founder of Puy du Fou, a popular historical theme park in the Vendée region of western France. In de Villiers, an aristocratic, Catholic, royalist with business acumen, Malofeyev – the ultra-Orthodox, monarchist Russian oligarch – found a perfect ideological match.
In August 2014, just weeks after the EU imposed sanctions on Malafeyev, de Villiers announced a deal with the Russian oligarch to build a historical theme park in newly annexed Crimea.
The announcement came during de Villiers’ trip to Russia, where the French politician-businessman met Putin at Livadia palace, the summer residence of Russian Tsars in the Crimean resort city of Yalta. A day after his “unforgettable” meeting, de Villiers sounded as excited as a fanboy. “What a statesman,” gushed the French politician in a Twitter post featuring a photograph of the meeting.
De Villiers – a two-time, but longshot French presidential hopeful – hails from an aristocratic family, Le Jolis de Villiers de Saintignon. The family has a military heritage – his brother, General Pierre de Villiers is a former French chief of defence staff.
They have not done too badly in business as well.
The Puy du Fou theme park in Vendée features a sweep of historical shows ranging from ancient Frankish resistance against the Roman Empire, Viking landings and medieval knights. Some historians have dubbed the park, “Puy du Faux” [Puy of Fakes], criticising historical errors and a “reactionary, ultra-Catholic” vision of the make-believe world. The park nevertheless is a popular destination and is the second-most visited theme park in France after Disneyland.
De Villiers also owns a local radio station, Alouette Radio.
Theme park plan ends, but monarchist dreams linger
For a Russian oligarch seeking the glory of bygone empires and heading a TV station named Tsargrad, a business deal with a French aristocratic politician and head of a historical theme park was a marriage made in revivalist paradise.
Announcing the deal in the Russian capital in August 2014, the Moscow-backed Crimean administration said de Villiers, Malofeyev and Sergei Aksyonov, the head of the Crimean government, had signed a memorandum of understanding under which de Villiers’ company Puy du Fou International and Malofeyev would invest at least 4 billion Roubles ($110m) in the Crimean park. The new project was called Puy du Fou Tsargrad.
The prospect of breaking EU sanctions in annexed terrain did not daunt de Villiers, who declared, “Sanctions are an act of war. Cooperation is an act of peace. We have come to deliver an act of peace,” in a 2014 press release. “Our project will promote the history of Crimea as a long part of the history of Russia,” he added.
Once a mainstream conservative, de Villiers founded a now defunct Eurosceptic political party and made two unsuccessful bids for the French presidency in 1995 and 2007. He has since moved further right, has spoken out against Islam in France and currently supports far-right candidate Éric Zemmour in the 2022 French presidential race.
Despite de Villiers’ dismissal of EU sanctions, the Crimea theme park dream in the end failed to materialise.
Experts dismissed the deal from its inception, with a foreign lawyer in Moscow telling the Financial Times that there was “no way” the planned theme park could go ahead under EU sanctions. Since the agreement was just a memorandum of understanding, with no evidence of financial transactions, the lawyer explained that de Villiers might not face legal consequences yet. “This is just a gigantic PR stunt,” he dismissed.
A Russia expert interviewed in 2014 by French daily, Ouest France, explained that sanctions at that time targeted Russian doing business in Europe but not European doing business or exporting to Russia. "It's legal but very badly viewed, in the current context, to trade with Russia," explained Jean Geronimo.
In a 2019 interview with French website Capital, de Villiers’ son and Puy du Fou artistic director Nicolas de Villiers confirmed his father’s Crimea plans had failed. “President Putin imagined a Puy du Fou in Crimea. But the economic sanctions against Russia prevent us from considering such a project,” said the younger de Villiers, adding that the group’s international projects in Spain and China were already keeping the group “quite busy. "No question of biting off more than we can chew,” he said.
The war in Ukraine, which has seen a tightening of sanctions, appears to have stalled Malofeyev’s vision of promoting his far-right, ultra-conservative Christian values on both sides of Atlantic. It has also sparked scrutiny of the links between French far-right figures, including presidential candidate Marine Le Pen, and Putin.
Malofeyev’s international ventures may have stalled, but the oligarch still has big plans for his native Russia. In a 2019 interview with the New York Times, Malofeyev hailed Putin’s move to grant himself two additional six-year terms after his current tenure expires in 2024.
Welcoming the prospect of Putin staying in power until 2036, Malofeyev said Russia now has “a quasi-monarchy” which, he said, was “a very good thing”.
But the 47-year-old oligarch is looking further into the future. “This isn’t the end,” said Malofeyev. “The introduction of a constitutional monarchy in the foreseeable future — for instance, after Putin’s rule in 2036 — has become realistic.”