The name Sergey Pugachev probably does not ring a bell for most Americans. In Russia, however, he is a household name for his alleged crimes.
Pugachev used to be an elected Russian senator who owned a large bank. The bank was declared bankrupt in 2010 and an investigation was launched to determine if there had been any criminal activity.
Pugachev fled the country and was eventually accused of embezzling millions from the bank. However, he claimed to have very few assets. He even sued the Russian government in European courts demanding that he be compensated for billions of dollars in assets that Russia had allegedly taken from him.
A court in London has now looked into the matter of trusts that Pugachev created. It has determined that the trusts were fraudulent and set up to hide the fact Pugachev still controls the assets he allegedly took from the bank.
The Russian Legal Information Agency reports on this story in "London court declares trusts of ex-Russian senator Pugachev sham."
This illustrates a key point in trust law, although the specifics are different in every jurisdiction.
Trusts designed to hide assets from known creditors, especially for criminal purposes, will not be allowed.
While some types of trusts can be a great way to protect assets from future creditors, it is not something that can be used to avoid paying current debt.
A trust, created in Cincinnati or elsewhere, will not protect assets obtained through criminal means.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: Russian Legal Information Agency (Oct. 11, 2017) "London court declares trusts of ex-Russian senator Pugachev sham."