Russian Oligarchs' Role in Drone Manufacturing: Investigating Russia's Sanctions Evasion

Special Report by the Frontelligence Insight

Through manipulations, cover-ups, and state assistance, Russian oligarchs involved in drone production are concealing their activities to evade sanctions targeting their enterprises. By analyzing hundreds of documents and leaked emails obtained by the Ukrainian Cyber Resistance, Frontelligence Insight has uncovered the measures undertaken by Russian enterprises to circumvent potential asset seizures. Furthermore, we discovered instances of Russians manipulating foreign banks to evade scrutiny, as well as attempts to obscure and distance themselves from drone production by manipulating formal ownership structures. Despite these efforts, our team has not only identified associated companies but also the individuals orchestrating these schemes. Here is our full report:

Contents

I. Identifying Key Players

II. UBS Bank in Switzerland

III. Summary

I. Identifying Key Players

Russian companies involved in supporting military production might not be easily identified as such. In the case of the Russian agricultural giant RusAgro, which presents itself solely as a major player in the agricultural sector - the third-largest producer of beet sugar in Russia. RusAgro is owned by the sanctioned oligarch Vadim Moshkovich. Another noteworthy figure is Maxim Basov, who served as the CEO of this company from 2009 to 2021. Keep these two names in mind, as they will reappear further.

In addition to their association with RusAgro, Maxim Basov and Vadim Moshkovich co-founded a company called AssistAgro in 2021. Both RusAgro and AssistAgro have been subject to sanctions from both the US and Ukraine.

When the invasion of Ukraine by Russia began and sanctions were imposed on oligarchs, some of them made attempts to alter the nominal ownership of companies.

Publicly available registries show that both Maxim Basov and Vadim Moshkovich were replaced by two new founders of the AssistAgro company, one of whom is Ilya Voronkov, known as a founder of Albatros.

The Albatros LLC has been sanctioned by multiple countries for its involvement in producing reconnaissance drones for Russia's defense ministry, as detailed in a note from the Swiss SECO.

The note suggests that drones produced by Albatros were delivered and utilized in Eastern Ukraine against Ukrainian forces during combat operations. Furthermore, this assertion can be independently confirmed through video evidence, which has been published by Russian sources themselves.

Russian service member with the Albatros UAV

In 2023, Albatros Company severed ties with Voronkov and eliminated records connecting ownership to GEOMIR—the same entity that acquired AssistAgro. And if the complexity isn't confusing enough, brace yourself: according to the records, the owner of GEOMIR is none other than Maxim Basov.

The connection between these individuals and companies extends beyond mere ownership changes. Through access to hundreds of emails, we have uncovered correspondence between members of these companies, deliberating on how to address specific issues with drones. These discussions involve representatives from companies such as RusAgro, AssistAgro and Albatros

The discussion revolves around testing and issues related to UAVs, accompanied by photos, which further substantiates that these companies are not only linked by common founders but also by collaboration in drone production.

Attached photo with the board from the e-mail discussion

With that information in mind, let's revisit Maxim Basov and Vadim Moshkovich. On 09.06.2022, Maxim Basov contacted Elvira Nabiullina, the Head of the Central Bank of Russia, requesting the transfer of financial assets from his Cyprus-based company to his own name to evade sanctions.

The proposed scheme is as follows: The Cyprus company RIGPA LIMITED, fully owned by Maxim Basov, will transfer the ownership of 54 million ROS AGRO depositary receipts, at that time held at brokerage company Renaissance Securities, to Maxim Basov himself. This would enable him to utilize them in Russia, thereby avoiding the risk of asset seizure in Cyprus.

On the 22nd of August, he receives a rejection letter from the Central Bank, explaining why his requested actions are not applicable to his specific case.

On the 26th of October 2022, Maksim Basov sent another request letter, but this time, he reached out to the Minister of Agriculture, Dmitry Patrushev. If this last name sounds familiar, that's because he is the son of Nikolai Patrushev, the former director of the FSB and head of the Russian Security Council, known as one of Putin's staunchest allies.

While the exact response he received remains unclear, based on the balance document issued by Renaissance Broker on February 10, 2023, it seems that the Rus Agro (Ros Agro PLC) depositary receipts are registered under his name - Maxim Basov. This implies that he managed to transfer them from RIGPA Limited to himself, potentially circumventing sanctions against the Rigpa company. 

II. The UBS Bank in Switzerland

At the same time, in August 2022, Basov was working with UBS bank, as evident from email exchanges between Maxim Basov and two representatives of UBS bank in Switzerland - Victoria Sokolova and Ruslan Katov. According to the conversation, Victoria asked Maxim to provide input on the KYC (Know Your Customer) statement regarding his association with Vadim Moshkovich, who was under sanctions. In response, he clarifies that he is not Moshkovich's business partner, aside from being a minority shareholder of the RusAgro.

We recognize that it's a fabrication, given that Maxim Basov not only served as CEO at RusAgro under Moshkovich until 2021 but also co-founded another sanctioned company, AssistAgro, with him. Additionally, in May 2022, when he wrote a letter to Nabiullina, he didn't solely identify himself as Maxim Basov but also indicated his position as the Chairman of the Board of Directors of RusAgro.

We also have documentary evidence — a sample of his additional request to evade sanctions, addressed to the Deputy Minister of Finances, Alexey Moiseev, written in October of 2022. In this correspondence, he explicitly states his efforts to mitigate the risk of sanctions being imposed on depositary receipts of Rus Agro, and he also links this to oligarch Moshkovich.

We also noted that to address this issue at UBS Bank, Basov was corresponding with an employee of Russian origin. Upon conducting an additional check, we discovered interesting information. According to the Delta Executive Search post, Victoria Sokolova, to quote: 

“...has over 20 years of experience in Corporate and Investment Banking, and most recently holding a senior banking positions in New York and Moscow.
She spent all of her career in advisory across a range of front office financial services products, initially as a top ranked Equity Research analyst in London and more recently as part of the oligarch coverage team at Sberbank CIB focusing on the Russian Forbes top 40 clients, servicing the bank’s most valuable corporate and investment banking client accounts out of Switzerland and Russia.”

The other employee included in the correspondence is Ruslan Katov. A quick search led us to his LinkedIn page, which indicates that he is a Russian-speaking director at UBS.

Based on the UBS sale documents issued to Rigpa Limited - Maxim’s offshore company registered in Cyprus, it's evident that he continued to operate via UBS in 2023. This suggests that he likely passed the KYC process, despite his affiliations and direct involvement with sanctioned companies and individuals.

III. Summary

Documentary evidence unequivocally shows the involvement of Maxim Basov, Vadim Moshkovich, and Ilya Voronkov enteprirses in drone manufacturing activities, concealed under the guise of existing agricultural enterprises. Not only have they taken proactive steps to evade potential asset seizures through associations, but it appears that Maxim Basov also misled during the KYC process, while UBS may have failed to conduct thorough due diligence. Their efforts to distance themselves from drone production by manipulating formal ownership and transferring assets amidst sanction risks suggest a clear awareness of their involvement in illicit activities, prompting preemptive measures to evade potential repercussions.

Through email correspondence, it has become evident that companies like RusAgro and AssistAgro are directly involved in the production of drones aiding the invasion of Ukraine. Consequently, despite their efforts to conceal their involvement in such activities, there should be a stronger stance from the international community against these companies and their affiliated entities.


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