Boris and Karina Rotenberg.
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In 2014, the U.S. sanctioned Boris Rotenberg, an oligarch with ties to Russian President Vladimir Putin. It took another eight years before his wife Karina—a U.S. citizen—was targeted with sanctions in the aftermath of Russia’s invasion of Ukraine.
In April 2015, attorneys working for the wife of a Russian oligarch found themselves in a bind. Karina Rotenberg, a wealthy Russian-American socialite based in Monaco, was trying to buy a home in Europe. But her husband—Boris Rotenberg, a billionaire oligarch—had been sanctioned by the U.S. nine months earlier, imposing an asset freeze and travel ban.
Complicating matters for Boris was the fact that Karina, who had moved to the U.S. at age 18, reportedly as an asylum seeker, was a U.S. citizen. The Rotenbergs had hired American lawyers to make sure the transaction wouldn’t fall afoul of the sanctions and U.S. tax laws. One of the Russian attorneys then emailed the American lawyers asking if an alternative method—where Boris would donate the funds to Karina in rubles within Russia—would change the sanctions and tax implications for the couple.
The response: “The penalties for a U.S. citizen who violates the sanctions at issue here are extremely severe.”
These emails, part of a leak of over 50,000 records sent between 2013 and 2020 from a Russian management firm that worked for Boris and his brother Arkady, were obtained by Russian investigative news outlet IStories and the Organized Crime and Corruption Reporting Project by a source who is not being identified for their safety. The documents were shared with 15 other media outlets including Forbes as part of a collaborative investigation dubbed the Rotenberg Files. The Rotenbergs did not respond to requests for comment, and their attorneys declined to comment.
Boris and his brother, Arkady—Vladimir Putin’s onetime judo sparring partner—built their fortunes in construction, partnering in several infrastructure firms and a bank. Both brothers were sanctioned in March 2014, when the U.S. Treasury Department alleged that they “provided support to Putin’s pet projects by receiving and executing high-price contracts” and “amassed enormous amounts of wealth during the years of Putin’s rule in Russia.”
The leaked documents include details of Karina’s travel on a U.S. passport and a W-9 tax form filed with the Internal Revenue Service, confirming her U.S. citizenship. It’s unclear when Karina, who was born in St. Petersburg, became a naturalized citizen. She filed a citizenship application in 2003, according to court records from a 2007 lawsuit she filed against the FBI, where she claimed that the agency had delayed completion of a name check required for her naturalization. (The complaint was later withdrawn and dismissed.) A source who asked to remain anonymous told Forbes that by the time she divorced her ex-husband in 2008, before marrying Boris, she was already a citizen.
The files also show how Karina, 44, played a key role in her husband’s attempts to shift his assets in an effort to skirt sanctions in the years after he was targeted. Yet it took another eight years—until March 2022, one week after Russia’s invasion of Ukraine—for the U.S. Office of Foreign Assets Control (OFAC) to sanction Karina. When it finally did, the Treasury Department’s sanctions notice simply described her as Boris’ wife and a Russian citizen, and the department did not answer questions about why Karina wasn’t sanctioned earlier. (It did not identify her as an American citizen.)
According to sanctions experts, Karina’s American citizenship may have contributed to that delay. “OFAC will be much more resistant to sanctioning a U.S. person. It’s a pretty big step,” a former senior U.S. sanctions official tells Forbes. “It happens, but it’s pretty rare because of the constitutional challenges that come with doing so.” Adds Collin Hunt, a former intelligence analyst at OFAC: “It gets really complicated and really messy when it comes to applications of sanctions law as it applies to U.S. citizens.”
Still, the Rotenbergs worked for years to figure out ways around the sanctions. They asked their American lawyers starting in 2015, when the family lived in Monaco, how Boris could financially support Karina and their children despite the sanctions. A memorandum prepared by the attorneys, included in the leaked documents, shows how one solution would have been to apply for a license from OFAC—but they also noted that those licenses are almost never granted, and recommended against it because it would make it more likely that OFAC would target Karina herself.
In 2019 the Rotenbergs tried again, hiring a different U.S. law firm to find a solution. The documents show the firm providing advice on two hypothetical situations: one in which Karina purchased 100% of a Maltese firm that owned real estate in Spain, and another where she transferred 20% of her stake in a Monaco company to a citizen of a country in the European Union. The hypotheticals appear to refer to a Maltese company that Boris had used to acquire a villa in Spain for roughly $10 million in 2014, and a Monaco firm co-owned by Boris and Karina that owned real estate in France. The attorney declined to comment on his work for the Rotenbergs.
The Rotenbergs also own two properties in the U.S.: a five-bed, five-bathroom mansion in Alpharetta, Georgia worth an estimated $3 million, which Boris purchased in 2008; and a condo in the Buckhead neighborhood of Atlanta, worth an estimated $300,000, that Karina acquired in 2001, when she was a student at American Intercontinental University Atlanta.
While Boris was sanctioned by the U.S. in 2014, it wasn’t until April 2022 that the European Union imposed sanctions on him. Boris is also a citizen of Finland—a member of the EU—which may have made it more difficult for the EU to sanction him, a similar situation to Karina in the U.S. Ultimately, the couple’s efforts failed. With both of them under sanctions, they are barred from traveling to the EU and their luxury property empire in France and Georgia is frozen.