The U.S. Department of Justice sought on Tuesday to seize two multimillion-dollar Manhattan apartments that were purchased by a former Mongolian prime minister with funds from a money laundering and corruption scheme.
“Today’s forfeiture action sends a message that criminal activity is never included in the homeowner’s agreement,” U.S. attorney Breon Peace said in a statement.
“As alleged, former Mongolian Prime Minister Batbold used high-end New York City real estate as a cover for his illicit corruption scheme,” Peace said.
Sukhbaatar Batbold, currently a member of parliament, and his family bought two midtown Manhattan apartments for a total of $14 million in 2012 and 2015, according to federal prosecutors in Brooklyn.
Prosecutors said the apartments were purchased with profits from a $68 million mining contract awarded to Hong Kong-registered Catrison Limited in 2011 to buy copper concentrates from the Erdenet copper mine in Mongolia. They said Catrison, a newly formed company with no previous mining experience, was controlled by Batbold through intermediaries.
The civil forfeiture complaint alleges Batbold used his position as prime minister to award the contracts to “entities owned or controlled by his associates or his son.” The scheme concealed that Batbold and his family violated Mongolian anti-corruption laws.
In response to the complaint, Batbold’s lawyers said a separate civil case from 2020 held that he had no property in New York.
“Mr. Batbold looks forward to his day in court, when he will have the opportunity to defend himself against these unfounded claims,” his lawyer, Orin Snyder, said in a statement.
In 2021, Congress passed the Corporate Transparency Act to address the misuse of shell companies, requiring certain companies to disclose ownership information to a registry held by the Financial Crimes Enforcement Network of the U.S. Treasury.
The Treasury Department in February formally proposed a long-awaited plan aimed at curbing the flow of illicit funds through American real estate markets. According to officials, more than $2.3 billion was laundered through U.S. real estate between 2015 and 2020.
Prosecutors allege that shell companies connected to a board member of Catrison purchased properties in New York City, with Batbold’s son listed as a co-owner of one property and using one of the apartments as his mailing address to open a U.S. bank account. These transactions are under scrutiny for potential illicit financial activities.
While Batbold has not been charged with a crime, Michael Nordwall, assistant director of the FBI’s criminal investigative division, said, “While he was prime minister of Mongolia, the defendant allegedly used corrupt funds and a sophisticated money laundering scheme to purchase two luxury New York apartments.
“Make no mistake, the FBI is dedicated to identifying assets gained through corruption and working with our partners to recover the funds, no matter how obscured.”
Some information for this report came from Agence France-Presse and Reuters.