Bank of Utah helped Russian oligarch secretly register private jet in the US, New York Times reports


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OGDEN — Bank of Utah helped Russia’s richest oligarch secretly register a jet in the U.S., according to a trove of leaked files known as the “Paradise Papers.”

Leonid Mikhelson is not only one of the eastern country’s wealthiest, but is also CEO of Russian gas company Novatek and ally of Russian President Vladimir Putin. The Bank of Utah served as a stand-in so Mikhelson could register his jet in the U.S., which requires American citizenship or residency.

And Mikhelson, whose company is currently under U.S. sanctions, isn’t the only one. The Ogden-based bank manages more than 1,390 aircraft trust accounts and makes millions in the process, according to a recent report by The New York Times. In fact, Bank of Utah is one of the largest aircraft trust account holders in the country — second only to Wells Fargo.

Bank of Utah executives were “surprised to learn,” however, that the jet was linked to Mikhelson, The New York Times reported. While the executives confirmed the shell company Mikhelson used had been a client since 2013, Mikhelson’s name was not on their records.

The jet was only linked to the Russian businessman when a cache of files from offshore law firm Appleby was leaked to a German newspaper, which in turn passed the files on to the International Consortium of Investigative Journalists and other news outlets, including the New York Times.

Mikhelson owned a company in Belize, which utilized a company in the Cayman Islands, which then turned to a company in the British Virgin Islands to create a new company in Panama to buy the jet and record it in the Isle of Man for tax purposes. From there, the jet was registered by the Bank of Utah.

While legal, these aircraft trust accounts have been criticized by many and deemed as major security risks by members of Congress and federal auditors. The accounts are not closely tracked by the Federal Aviation Administration, and some fear they could allow terrorists and criminals a way to evade sanctions and law enforcement.

“There are serious national security risks when the FAA approves an aircraft registration but does not have all the information, particularly if an aircraft is owned by a shell corporation or a foreign entity,” Rep. Stephen F. Lynch, a Massachusetts Democrat, told The New York Times in July.

Bank of Utah has come under scrutiny before when one of its registered planes landed at an airport in Iran, possibly violating American sanctions at the time. The bank initially told reporters it had “no idea” why the plane was there, though it was later found to be owned by a Ghanaian company and had no Americans aboard.

The Iran incident did, however, cause bank executives to rethink the program. Branden Hansen, the chief financial officer, even told The New York Times they considered shutting the whole thing down because of the reputational risk, though they ultimately decided to continue the service with “stronger due diligence and new staff to oversee it.”

Bank of Utah filed a registration renewal for Mikhelson’s jet with the FAA last year, but Hansen told reporters the link to the Russian oligarch may have escaped scrutiny when the internal review process was less rigorous.

“Russian involvement would score as a high risk by itself,” Hansen told The New York Times. “It’s highly unlikely that something like this would have been approved in today’s climate.”

To read the full report on The New York Times, click here.

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