Last month, U.S. Attorney General Merrick Garland approved the transfer of $5.4 million of "forfeited assets" formerly owned by sanctioned Russian billionaire Konstantin Malofeyev to Ukraine to "remediate the harms of Russia's unjust war."
Malofeyev, a Kremlin-connected media tycoon who is openly infatuated with Russia's imperialist, Orthodox heritage, has been under Western sanctions since 2014 for his role fomenting uprisings in parts of southern and eastern Ukraine and facilitating Russia's occupation of Ukraine's Crimea region. He is also the target of an international arrest warrant on suspicion of creating and financing illegal paramilitary formations.
Nonetheless, the so-called Orthodox oligarch has continued to finance activities in support of Russia's aggression against Ukraine since Moscow launched its full-scale invasion in February 2022. It has long been believed that the 48-year-old largely withdrew from business shortly after he was hit with international sanctions, and that he has, since then, mostly used money he accumulated over his career.
Systema, RFE/RL's Russian investigative unit, has discovered strong evidence that Malofeyev was heavily involved with a major Russian IT company that benefited from numerous contracts with the Russian government and state-controlled companies. That company was sold just a week before the February 2022 invasion, bringing the entities tied to Malofeyev a substantial windfall. (To read the complete Systema investigation in Russian, click here.)
Malofeyev has long been an ideologue of the restoration of Russia's imperial past. His Tsargrad media network was instrumental in promoting the so-called Novorossiya project to justify the attempt to establish Russian control over much of southern and eastern Ukraine that began in 2014. It served as a major platform for disseminating and popularizing the ideas of the extreme-right publicist Aleksandr Dugin.
In the summer of 2020. Malofeyev presented his three-volume "historical" opus at the Red Square book festival in Moscow, an event that has been sponsored since 2015 by a foundation headed by Kremlin insider and current Foreign Intelligence Service (SVR) Director Sergei Naryshkin. The book describes Moscow's aggressive actions in Ukraine as the "reconsolidation of historically Russian lands."
At the book presentation, Malofeyev was asked who Russia's new monarch and the founder of the next ruling dynasty should be.
"I definitely think that the worthiest candidate to become the emperor of modern Russia is Vladimir Vladimirovich Putin," he replied.
An Unexpected Visit
Late one evening in February 2018, the bell rang at the Moscow apartment of IT businessman Sergei Shilov.
It was a team from the Federal Security Service (FSB) with automatic weapons at the ready, Shilov later said in an interview for a YouTube channel of Esquire magazine. The agents searched the apartment and hustled Shilov away to the Investigative Committee for a statement. In the end, he was arrested on suspicion of fraud to the tune of 1.4 billion rubles ($35 million) in connection with an IT contract with the Interior Ministry.
Shilov founded the company AT Consulting in 2001, and it quickly developed into one of Russia's leading IT-services providers. In addition to the Interior Ministry, AT Consulting had contracts with Rostelekom, Rosneft, VTB bank, Sberbank, and others. In 2014-15, Kirill Shamalov -- at the time, Putin's son-in-law and a neighbor of Malofeyev's in Moscow's prestigious Rublyovka district, where Putin's main residence is located -- was involved in a joint venture with the company.
Although Malofeyev's Tsargrad media group rarely pays attention to business stories, the hullabaloo surrounding AT Consulting appeared in one of its reports, which included comments from a person or persons in "Shilov's inner circle."
Around the same time, AT Consulting underwent some significant changes. Ivan Matyash, head of the legal department for Malofeyev's Tsargrad Estate real-estate company, took over as CEO. Several businesses tied to AT Consulting were taken over by businessman Yevgeny Zhulanov, a former business partner of Malofeyev's.
The industry publication TAdviser connected the changes to Malofeyev.
"The consolidation that happened in June 2018 was help for the AT Consulting team at a difficult time" and "may have been carried out by Yevgeny Zhulanov at the request of Konstantin Malofeyev," it reported, citing an unidentified acquaintance of both men. The source said that Malofeyev is a co-owner of AT Consulting, it added.
In March, the investigative outlet Proyekt also reported that Malofeyev had been a co-owner of AT Consulting, a company that had 35 state contracts with the Russian State Register worth 2 billion rubles ($23.6 million), according to Proekt's study of the state tenders register.
Malofeyev's spokesman declined to answer any of Systema's questions for this report.
'Give Me 70 Percent'
AT Consulting may have first appeared on Malofeyev's radar in the early 2010s, when the firm began doing IT work for Rostelekom, where Malofeyev was a significant minority shareholder and the "Orthodox oligarch" reportedly began taking over some of its contractors.
In a 2010 interview with the business daily Vedomosti, Yevgeny Yurchenko, a former member of Rostelekom's board of directors, described what he said were Malofeyev's tactics from this period.
"Someone would come to you and say: 'Tomorrow your company is going to lose all of its clients. If you don't want to go bankrupt, give me 70 percent and I will guarantee state orders for you,'" he said.
Malofeyev sued Yurchenko for allegedly besmirching his business reputation, but the court satisfied the complaint only partially and declined to order retractions of most of his remarks, including this one.
Nonetheless, Malofeyev's name was not officially tied to AT Consulting, which continued on paper to be owned and operated by its founder, Shilov.
After a month in pretrial detention, Shilov's position began to deteriorate. He gave self-incriminating testimony and implicated Aleksei Nashchyokin, a former top manager at Rostelekom and a longtime acquaintance of Malofeyev's. The case also alarmed AT Consulting's clients and had a negative impact on business. The situation seemed to be spiraling out of control.
Under New Management
Around that time, a lawyer named Aleksandr Zheleznikov, who had repeatedly represented Malofeyev in the past, stepped in to help Shilov. In addition, a former FSB agent and business associate of Zhulanov's, Anton Nemkin, was placed on AT Consulting's board of directors. Shortly after these developments, Shilov was released to house arrest, which was soon further eased to a pledge not to leave the city. In April 2019, the charges against Shilov were dropped and the case closed.
By the end of the year, AT Consulting disclosed that Shilov's stake in the company was just 10 percent. He retained his seat on the company's board, but the other four seats were held by people tied to Malofeyev. Malofeyev's 27-year-old son, Kirill, began working as an "analyst" at the company. Matyash's tenure as CEO was extended through 2024.
Toward the end of 2021, the business press began reporting rumors that the state nuclear-power company Rosatom was interested in buying AT Consulting. Kommersant estimated the value of the deal at 10-12 billion rubles ($119-142 million).
It is possible that Rosatom's interest in AT Consulting in particular was facilitated by Malofeyev's longtime contact Yury Kovalchuk, a billionaire financier who has known Putin since the early 1990s and has been described as the president's "personal banker" as well as an influential figure in his decision-making on Ukraine. Kovalchuk has longstanding relations with former Rosatom CEO Sergei Kiriyenko, the first deputy head of Putin's administration who since January 2017 has been the chairman of Rosatom's oversight board and is also heavily involved in Kremlin policy on Ukraine. When Kiriyenko ran Rosatom, Kovalchuk's son, Boris, served as his deputy in charge of development.
Rosatom's Money
The deal moved ahead quickly and was wrapped up on February 16, 2022, about one week before Russia invaded Ukraine. Rosatom ended up paying 20.2 billion rubles ($265 million), of which 16.6 billion ($197 million) was deposited in an account controlled by Project Investments, which in turn is controlled by Leonid Gavrilov, a businessman with long-standing ties to Malofeyev, according to financial records studied by Systema.
Shortly after the deal was completed, according to the records, Gavrilov purchased a one-room apartment in the Russian Black Sea resort city of Sochi. Much of the rest of the money from the sale was sent to a number of people and companies tied to Malofeyev. Nearly 6 billion rubles ($68 million) were transferred to a company called April Capital. A co-owner of April Capital through a related company, April Group, was Anatoly Milyukov. He formerly served on the board of directors of Rostelekom and, according to Kommersant, managed Malofeyev's minority stake in that company.
April Capital had earlier acquired a 14.5 percent stake in AT Consulting from Gavrilov's Project Investments. Just six months before the Rosatom deal was inked, April Capital reported its stake in AT Consulting was worth $9 million. In other words, it would seem the entire value of AT Consulting was less than $64 million, about one-quarter of what Rosatom paid.
According to Systema's findings, structures and individuals associated with Malofeyev received up to 19.8 billion rubles ($235 million) from the Rosatom deal.
Additionally, in April 2022, Rosatom bought six other companies tied to Zhulanov, Malofeyev's former business partner. Zhulanov also sold three companies to AT Consulting on the eve of its acquisition by Rosatom.
In comments to Systema, Gavrilov denied that Malofeyev was linked to AT Consulting and declined to comment on the deal with Rosatom, citing nondisclosure documents. AT Consulting referred queries to official press releases, which did not reveal the amount of the transaction or the purchaser. Malofeyev's spokesman, Anatoly Milyukov, and Sergei Shilov declined to comment. Rosatom, April Kapital, Zhulanov, and Nemkin did not respond to inquiries.
Since the invasion of Ukraine, Malofeyev has distributed prizes and bonuses to troops participating in the invasion. His charitable foundation, the St. Vasily the Great Foundation, has distributed some 700 million rubles ($8.3 million) in Russian-held parts of Ukraine's Donbas region. In 2022, five companies were registered in the Russian-occupied city of Donetsk that are run by Aleksei Terekhov, the head of Malofeyev's firm Kontur. One of the companies is called Tsargrad Donetsk Holdings.
