Image Credit: The Department of Justice

The latest chapter in the sanctioned superyacht saga unfolds with Amadea, a 106-metre Lürssen whose seizure by the US government is now fiercely contested in a New York court. The fate of this vessel is the focal point of an evidentiary hearing in which the government alleges it belongs to a sanctioned Russian oligarch, Sulieman Kerimov, a claim another Russian national and supposed fall guy, Eduard Khudainatov, vehemently denies, contending that he is the true owner.

The hearing has revealed an unsettling development. With arguments now concluded until next week, testimony heard in court details how the US Department of Justice (DOJ) has selectively edited witness testimony shown in court to intentionally manipulate Captain John Walsh’s statements on the vessel’s ownership.

Further still, both the yacht’s captain and security chief, Martyn Messenger, were held in custody, interrogated and gave disclosures that were then mischaracterised in government reports. Sources with knowledge of the matter tell SuperyachtNews that both were detained for extensive periods of time with little food and water and just a mattress on the cell floor to sleep on.

“The government continues its pattern of deception in a desperate attempt to justify the unlawful seizure,” says the source.

“First, the FBI made false statements in sworn affidavits and lied in reports about witness testimony. Now we see that the DOJ will even resort to clipping witness statements to mislead the court. The government’s deceit cannot obscure the fact that Mr Khudainatov has always owned Amadea.”

Members of the FBI boarding Amadea. Image credit: The Department of Justice

Amadea has become the flagship vessel for US authorities in their bid to track down and seize the assets of alleged Russian oligarchs. The US government alleges that Suleiman Kerimov, a Russian billionaire, owns and controls the yacht and violated the sanctions imposed on him in 2018.

President Biden set up KleptoCapture, his marquee foreign policy response to Ukraine, and the US needed a Russian scalp and a big one. So they went for Amadea. In many ways, the government probably hoped the case would be straightforward, a clear demonstration of their ability to crack down on sanctioned Russian assets. But as the hearing has unfolded, it has become anything but simple. A hasty, abbreviated and partial investigation led to the seizure of the Amadea in Fiji after only weeks.

“This case is a totally different beast to anything we have seen before,” Michael Moore, Chairman Emeritus of the International Superyacht Society and founding partner of Moore & Co, tells SuperyachtNews.

“The boat was arrested in Fiji completely at the behest of the United States government. You always have jurisdictional reach. A federal district court judge has jurisdiction within their respective territory. But here you have a government extending its long arm to Fiji, which has no doubt been subjected to the pressures of the US.”

However, fellow countryman Khudainatov, represented by New York law firm Ford O'Brien Landy, filed a claim contesting the seizure, maintaining that he is, in fact, the real owner since its commission.

L-R: Evgeniy Kochman, Eduard Khudainatov, Peter Lürssen and Espen Øino in front of Amadea, taken on Amadea's launch, 16 April 2016.

It's an interesting case because it falls under civil forfeiture, meaning that the US government is seeking to permanently seize Amadea on the grounds that it’s linked to sanctioned individuals. Unlike a criminal case, civil forfeiture does not require a conviction, only that the government proves, on the balance of probabilities, that the yacht is connected to illicit activities.

Ultimately, the case hangs on the fact the US government bears the burden of proving that Khudainatov is not the true owner of Amadea. Meanwhile, Khudainatov and his legal team must present sufficient evidence to establish his standing as the rightful owner. If he fails to do so, the vessel will be forfeited to the state under civil asset forfeiture laws.

“The US government is pursuing this case under a statute introduced by President Biden, known as the International Emergency Economic Powers Act,” says Moore. “But right away, that raises a question: why proceed in this vein when the legal standard in a maritime forfeiture case is significantly lower?”

The key issue in this case is “standing”, meaning whether Eduard Khudainatov, the registered owner, has a legitimate claim to the vessel or if he is merely a “straw owner” shielding it for sanctioned Russian oligarch Suleiman Kerimov.

Rachael Doud, Southern District of New York, says Khudainatov is a “straw owner” and had sold Amadea to Kerimov, and therefore his claim to the vessel should be stricken. The claim extends beyond Amadea, with allegations linking him to other high-profile yachts, including Crescent and Scheherazade, both reportedly associated with sanctioned Russian individuals Igor Sechin and President Vladimir Putin respectively. However, these claims remain legally unproven.

SuperyachtNews understands that Scheherazade’s Captain, Guy Bennet Pearce, previously stated that he would not work for Vladimir Putin, further casting doubt on the allegations that the vessel is ultimately controlled by the Russian president or his inner circle.

In the hearing, Doud argues that the sale was realised in a purchase agreement and Kerimov’s niece paid €225 million ($234 million) to complete the deal in September 2021. She claims Kerimov and his family used the vessel and planned to use it further after the sale. So while Khudainatov may have retained the title for the yacht, he only did so because Kerimov was under US sanctions at the time of the sale.

Khudainatov’s lawyers denied this allegation. While Khudainatov may have at one point sought to sell the vessel, Ford claims there is no proof of the sale being actualised and the transaction was, in fact, a loan. His team has also submitted financial records, witness testimonies and other documentation to substantiate his claim.

The new administration’s arrival throws this notion into question once more. The potential sale of Amadea and the use of the proceeds to aid the Ukrainian war effort against the Russian invasion could have significant geopolitical implications.

In June last year, US judge Dale Ho, who is presiding over the case, ruled against the government’s request to sell the vessel, with the rising costs of continuous maintenance, thought to be around $750,000 a month, becoming the focus of where the proceeds are spent. These costs have ultimately come from the public purse. In fact, US taxpayers have spent $30 million on expenses, including flights, groceries, docking fees and more. Yet the effort has only generated $6 million for Ukraine.

How did this happen?

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Khudainatov’s legal team maintains that he has always owned Amadea and has presented financial records and witness testimonies supporting his claim. Attorneys have further argued that no sale or transfer of ownership ever took place and that no documents exist to suggest that Kerimov or any other party purchased Amadea. This is a key element of the case, as the US government must prove that Kerimov, not Khudainatov, controls the yacht.

Captain Pearce, who was hired by the now-sanctioned management company Imperial Yachts to oversee Scheherazade’s build, testified under oath that he met with the owner of the 140-metre Lürssen (then called Project Lightning) in 2020. Pearce states that he was “introduced to Mr. Khudainatov at his offices in Moscow” and met with him “a great number of times” throughout the construction process. “Mr Khudainatov was intimately involved in all aspects [of the build], from design to exterior outfitting,” he testifies.

“There has to be a substantial record of ownership, presumably under the original owner’s name. So at what point was it transferred? There has to be a paper trail,” says Moore. “With 400 docket entries spanning over two years, that would have been my starting point if I were the government. I would have said, ‘Let’s begin with how you claim to have acquired the title.”

Sources familiar with the matter have told SuperyachtNews that there is ample evidence confirming Khudainatov’s ownership, while the US government has yet to provide proof of any transfer to another party.

An expert on the Russian economy also testified that Khudainatov’s wealth would easily allow him to purchase and maintain a yacht of Amadea’s scale, countering the US government’s claim that he could not afford such an asset without external backing.

Now, the evidentiary hearing has exposed deep concerns about how the DOJ handled its case against Amadea.

Newly revealed video testimony from Captain Walsh suggests that the DOJ selectively edited witness statements to misrepresent key evidence, raising serious questions about the integrity of the case as a whole. Under oath, Walsh stated that he never knew the identity of the yacht’s owner but believed it to be Khudainatov, directly contradicting the government’s claim that he had identified Kerimov as the owner.

Martyn Messenger, Amadea’s security chief, testified that he was detained and interrogated at LAX airport in what he described as an attempt to coerce statements supporting the government’s case. His sworn testimony confirmed that at no point did he state that Kerimov owned Amadea, again undermining the DOJ’s argument.

Further damaging to the prosecution was testimony from FBI investigator Timothy Bergen, who admitted that critical witnesses were either ignored or deliberately omitted from the investigation. The hearing revealed that the government had not conducted a full investigation before seizing Amadea and instead relied on selective evidence to push through its case under Operation KleptoCapture.

As the hearing progresses, closing arguments are scheduled for 7 February at the Thurgood Marshall US Courthouse in New York. The outcome will have major implications not just for Amadea but for how future sanctions-related asset seizures are handled. If the court rules in favour of the US government, it could pave the way for similar actions against other high-value assets with contested ownership.

There is also the president-sized-elephant in the room, with the change of administration raising questions on how this case is to be handled. The government has already spent sizeable sums on maintenance fees, with the decision to seize the vessel without concrete proof it belonged to a sanctioned individual appearing increasingly rash as the hearing continues. 

Ultimately, the notion of ‘no smoke without fire’ doesn’t float in a court of law and allegations alone are not enough. The burden is on the government to prove that Khudainatov is not the true owner, while his team must present sufficient evidence to establish his legitimate claim. Without definitive proof, speculation holds no weight in legal proceedings

“The more evidence and testimony that is produced, the more it becomes clear that the facts are on our side,” adds the source. “The government conducted no investigation prior to seizing Amadea and resorted to desperate, strong-arm tactics to get the statements that fit their false narrative. The government simply fabricated the allegations that Kerimov purchased the Amadea. It is owned by Mr Khudainatov and always has been.”

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