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WASHINGTON —A New York court has denied the U.S. government the right to sell a superyacht that it alleges belongs to sanctioned Russian oligarch Suleyman Kerimov.
The ruling means that U.S. taxpayers will continue to foot the bill for roughly $740,000 a month for the 106-meter Amadea's upkeep and insurance.
The luxury vessel, with an estimated value of $230 million, is at the center of a legal battle over the enforcement of U.S. sanctions against Russia. American prosecutors allege that Kerimov and his proxies routed dollar transactions through U.S. financial institutions to maintain the yacht, which would constitute a sanctions violation.
In May 2022, the island nation of Fiji confiscated the Amadea and later transferred it to the United States. The U.S. government would like to sell the yacht and transfer the proceeds to Ukraine.
But that procedure, known as civil forfeiture, grew more complicated when another Russian billionaire, Eduard Khudainatov, who is not under U.S. sanctions, claimed the Amadea actually belongs to him.
In court filings, the Justice Department has termed Khudainatov a "straw owner" for Kerimov. Khudainatov denies that.
The legal battle over Amadea could take a while. Until it concludes, the U.S. government is paying roughly $600,000 for the yacht's upkeep and $140,000 for its insurance each month.
In a bid to decrease those expenses, the U.S. government requested permission to sell the vessel and convert its value into cash. That practice is relatively common in civil forfeiture cases when an asset is rapidly depreciating in value or its upkeep is excessively costly.
But on Tuesday, the U.S. District Court of the Southern District of New York ruled that the cost of maintaining Amadea was not "excessive."
To assess "whether the maintenance costs of the Amadea are excessive, the court must not look solely at the total dollar amount of the maintenance costs, but must principally consider whether those amounts are more than what is usual as compared to the maintenance costs for other similar yachts," the judge wrote in the ruling.
The U.S. government could not prove the expenses met that standard, the court ruled. The Justice Department has the right to appeal the decision.
Two days after the ruling, lawyers representing Khudainatov and the company that directly owns the Amadea filed a memorandum opposing the U.S. government's efforts to strike Khudainatov from the case. Prosecutors allege that Khudainatov is not the yacht's actual owner, meaning he lacks standing to contest its forfeiture.
But the memorandum, which includes declarations from yacht employees and contractors, argues that Khudainatov is the true owner and, thus, the Amadea is not subject to forfeiture at all.
The U.S. government's attempts to strike Khudainatov from the case are "nothing more than a desperate attempt to steal the Amadea by default," Adam Ford and Renee Jarusinsky, counsel for Khudainatov and the ownership company, said in a statement.
"Mr. Khudainatov is, and always has been, the rightful owner of the Amadea," they continued. "We are confident that the truth will prevail and the boat will be returned. Until then, this costly burden that the government has placed on the American people will continue to grow heavier."
The Justice Department declined to comment.
The Voice of America provides news and information in more than 40 languages to an estimated weekly audience of over 326 million people. Stories with the VOA News byline are the work of multiple VOA journalists and may contain information from wire service reports.