Economic Sanctions, Lawsuits, and Tragic Times for Russian Billionaires
So what happens to billionaires when they sue our government to get back their luxury properties and yachts?
Ric Edelman: We have been witnessing the horrors of war in Ukraine, and our hearts and prayers go to all of those dealing with this tragedy, and we don't yet know of its outcome. In the midst of all of this, it leaves to me to discuss something frankly trivial, but in a desperate effort to find something fascinating that isn't getting broad coverage, I want to ask you a question. We have been as part of the economic sanctions attacking not just Russia's economy and Vladimir Putin personally, financially, we've also been going after his oligarchs - the billionaires in Russia who own real estate and yachts all around the world. Governments have been seizing those properties as an effort of invoking financial pressure. The goal is if we put enough financial pressure on the rich people, if we take their riches away from them, maybe they will put pressure on Putin to put an end to his hostilities. So far, it's working. We have decimated the Russian economy. We have massively interfered with the lifestyles of the rich and famous in Russia. We've seized their luxury homes scattered around the world.
Ric Edelman: We've seized their yachts. I now simply have a basic question for you. You've seized the yacht... what do you do with it? You know, there's an international luxury asset law? Prosecutors have to determine if the property that they have seized was part of a crime. The fact that somebody is a billionaire and buys a yacht doesn't necessarily give the government the legal right to seize that yacht. Unless the yacht itself was involved in criminal activity, it could be argued that the government has no right to seize that property. And who's going to figure this out? Well, the same people who figure out every debate of this sort: judges. This is going to end up in the courts. Those billionaires are going to sue those governments, the American governments, the European governments, the British government and others who have been seizing those properties and those yachts. And they're going to argue that they deserve to get their property back. It's going to take years for these court cases to wind their way through to verdicts. In the meantime, who pays to maintain these properties? Yachts can cost millions of dollars a year to maintain, to keep them afloat, to keep them safe. Who's going to pay for that? The billionaires are going to argue the yacht was seized. It's no longer mine. I'm not going to pay for it to sit there.
Ric Edelman: If the government doesn't pay for it, the quality of that yacht will fall. And to the point it might not even be seaworthy. The value of the yacht might become worthless, meaning we're all arguing over an asset that has no value. Meantime, if you've got this luxury piece of real estate, either a high priced condo in New York or a sprawling spread somewhere in the hills outside of London, who's going to maintain the property? And you know what happens to homes when they don't get maintained. Who's going to pay for this maintenance while these lawsuits occur? And as we're footing the bill, if that's what's going to happen, isn't Putin and his billionaires getting the last laugh? Think about it. How much time were they spending on those yachts anyway? How much time were they spending at that villa in Tuscany anyway? Now they just walk away from the property, and they shove the expenses on to somebody else. Who's going to pay for that property? Who's going to buy it? Nobody can because it's tied up in the courts. It's fascinating when you begin to consider the economic repercussions of going to war. And yes, don't get me started. It's trivial compared to the human tragedy that's going on. This is a personal finance show, and I'm talking merely about the personal finances, trivial as though they may be.