NEW YORK (Reuters) - U.S. prosecutors may confiscate $5.4 million belonging to sanctioned Russian businessman Konstantin Malofeyev, a judge ruled on Thursday, paving the way for the funds to potentially be used to help rebuild war-ravaged Ukraine.
The ruling by U.S. District Judge Paul Gardephe in Manhattan federal court marked the first forfeiture order for a Russian oligarch's assets since the Department of Justice in 2022 launched a task force aimed at squeezing the finances of Russian President Vladimir Putin's allies in response to the Ukraine invasion.
U.S. President Joe Biden in late 2022 signed a law allowing the DOJ to transfer some forfeited assets to the State Department to aid Ukraine. U.S. law limits how the government may use forfeited assets.
U.S. authorities have accused Malofeyev, the owner of Christian Orthodox television channel Tsargrad TV, of financing separatists in Crimea, which Russia annexed in 2014.
Malofeyev, who has denied financing separatists, was sanctioned by Washington in 2014 and charged with sanctions violations in 2022. He could not be reached for comment and is believed to be at large in Russia.
Andrew Adams, head of the DOJ's KleptoCapture task force, said last month that the first forfeited funds could be transferred to Ukraine shortly.
"These amounts are miniscule compared to the cost of the catastrophe inflicted by Russia on the people and the land of Ukraine, but the contribution is important," Adams said in a speech to the Hudson Institute, a Washington, D.C. think tank.
Moscow calls its activities in Ukraine a "special military operation."
Prosecutors said in court papers late last year they were entitled to the money in Malofeyev's account at Denver-based Sunflower Bank because he sought to transfer it to a business partner in violation of U.S. sanctions.
Since Malofeyev did not contest the forfeiture request, prosecutors said on Thursday the funds should be forfeited by default.
The KleptoCapture task force has temporarily seized other oligarchs' assets, including a $300 million yacht, but has not yet won orders to permanently forfeit them.
($1 = 0.9163 euros)
(Reporting by Luc Cohen in New York; Editing by Noeleen Walder and Marguerita Choy)