Russian oligarchs invest millions in North Carolina companies

CHARLOTTE, N.C.-  Investigation has found hundreds of millions of dollars invested in the Carolinas by companies connected to Russian oligarchs. One of those companies was part of the biggest economic development deal in the history of Concord, until it went bankrupt shortly after a Russian investor took control of the corporation.

KMI started digging into this topic after President Joe Biden and European leaders announced sanctions against Russia that cuts off Russia’s access to money in banks in other countries. It could impact Russia’s ability to wage war but it also can have an impact right here at home.

For seven years, the Philip Morris plant sat empty, waiting for a new tenant with potential and promise to bring jobs to the community. Former Concord Mayor Scott Padgett thought the perfect opportunity arrived in 2014.

“It was very exciting to think of the quality and the number of jobs that could be created there because we hadn’t gotten over losing Philip Morris,” Padgett told KMI.

The excitement was about a company called Alevo, that manufactured huge batteries called grid banks. The company promised jobs, more than 2,000 over three years.

“We thought, maybe, we hit a home run here. Just didn’t work out that way,” Padgett said.

In 2017, just two months after hosting another job fair, the company started layoffs, filed bankruptcy and announced it was closing its office. Sometime between the original announcement and the bankruptcy, a new investor had taken control of the company.

“I was a little surprised about the bankruptcy. I was really surprised about potential Russian investment right here in Concord,” Padgett said.

In 2017, the Charlotte Observer confirmed Russian Oligarch Dmitry Rybolovlev invested in Alevo and company records show the oligarch installed three of his colleagues to leadership positions.

It’s the most high-profile example of Russian oligarch’s investing in the Carolinas but it’s not the only one and investing overseas is commonplace.

“Oh no doubt, absolutely,” Markus said.

Markus is an associate professor at the Darla Moore School of Business at the University of South Carolina and has written extensively on Russia’s politics and economy.

With Russian oligarchs often becoming rich because of contracts awarded by Putin, Markus says many Russian elites realize their fortunes can just as quickly disappear if left entirely in Russia.

“Trying to protect their assets, either from the Kremlin or from rival oligarchs,” Markus said.

Charlotte startup MapAnything was backed by investment company Columbus Nova. Nova has been linked to Russian billionaire Viktor Vekselberg and was in the middle of an investigation into Michael Cohen’s payments to Stormy Daniels.

Nova even had an office in Uptown Charlotte at 200 South Tryon St. State business records show the company’s North Carolina office dissolved in 2020 and WBTV found no evidence the office was still in operation.

Russian oligarchs have also invested in two healthcare companies in Durham, one of which SEC filings show Gavril Yushvaev as the third largest shareholder. But these are only the deals that are publicly know about.

“Knowing who’s behind those investments I think is critically important,” Gary Coleman with Transparency International said.

Transparency International has been advocating for oversight to remove corrupt money from financial institutions in Europe, America and across the world. But even with new sanctions that isn’t easy.

“A bunch of it is likely to be in anonymous structures, anonymous buildings, anonymously owned companies, anonymous investments, Coleman said.

Markus has previously questioned whether sanctions against oligarchs actually impacts the decision making of Putin and the Kremlin. But given the gravity of the new, unprecedented sanctions he says it is a possibility.

“The extent of sanctions is unprecedented, so whatever predictions I might have made, yoin the past based on the much weaker wave of sanctions post-Crimea, may not apply completely in the current scenario,” Markus said.

Markus points out that not all Russian oligarch investments are neccessarily the laundering of money or hiding illegal assets overseas. But even some of those legal assets are likely to get caught up in the sanctions.

“Sanctions are simply used as a tool to create the right incentives for the Kremlin in the future, and as such some unjustly targeted oligarchs will be part of that tool,” Markus said.

Mayor Padgett never learned why the Russian oligarch invested in Alevo and hev never met him either. He’s not sure what intentions were for the company.

“We probably will never get the answers to that, but some of those people are probably some of the people that are close to the President of Russia right now. That certainly gives you pause,” Padgett said.