Russian President Vladimir Putin applauds then-Alfa Bank head Petr Aven after awarding him with the Order of Merit to the Fatherland during a ceremony at the Kremlin in Moscow on July 25, 2005. Alexander Nenenov/Pool via Associated Press, file

The U.S. Treasury Department on Friday imposed sanctions on Mickail Fridman and Petr Aven, two Russian billionaires behind Alfa Group, a prominent financial services firm – a sign that the Biden White House is seeking to increase pressure on Russian elites who have carved out international profiles while maintaining business operations in Russia.

“Wealthy Russian elites should disabuse themselves of the notion that they can operate business as usual while the Kremlin wages war against the Ukrainian people,” Deputy Treasury Secretary Wally Adeyemo said in a statement announcing the new punitive measures. “Our international coalition will continue to hold accountable those enabling the unjustified and unprovoked invasion of Ukraine.”

Russian businessman and co-founder of Alfa-Group Mikhail Fridman attends a conference of the Israel Keren Hayesod Foundation in Moscow, Russia on Sept. 17, 2019. Pavel Golovkin/Pool via Associated Press,  file

The U.S. sanctions will deal another blow to Fridman and Aven, who were among the original oligarchs, powerful Russian tycoons who won vast fortunes in the 1990s during Boris Yeltsin’s presidency, and who then managed the transition to President Vladimir Putin’s rule and grew their empires further. Neither could be reached for comment Friday.

The two men have been battling sanctions imposed on them last year by the European Union and Britain in the immediate aftermath of Russia’s invasion of Ukraine, which described them as “pro-Kremlin oligarchs” closely associated with the Russian president.

The E.U. has claimed that Fridman, as a founder of Alfa Group, won state property as a reward “for his loyalty to the political regime.” In court filings challenging the E.U. sanctions, Fridman and Aven have denied they have benefited from any relationship with the Russian president. They have both denied close connections to Putin.

Until Friday, the two men’s cultivation of allies in the West appeared to have helped keep them off the U.S. sanctions list. Aven had spent much of the past year and a half since Russia’s invasion of Ukraine at his residence in the Hamptons in New York, while Fridman has been living in a mansion in Highgate, in north London, while mounting his legal challenge against the sanctions.

Fridman, 58, was briefly arrested at the end of last year when about 50 officers from Britain’s National Crime Agency raided his mansion and announced an investigation into possible conspiracy to defraud the U.K. government, conspiracy to commit perjury, and money laundering. But the inquiries, apart from the money laundering investigation, have since been dropped, according to people familiar with the matter.

The two men have sought to distance themselves from their Russian business empire, which includes one of Russia’s biggest private banks, Alfa-Bank, and an insurance giant, AlfaStrakhovanie, since Brussels and London imposed the punitive measures last year.

Fridman and Aven resigned from the board of ABH Holdings, the Luxembourg-based parent company of Alfa-Bank, in March 2022 but retained 33 percent and 12.4 percent stakes, respectively, in the holding company.

The Treasury Department’s move follows an in-depth report by the Russian independent investigative outlet Proekt into the roles of dozens of Russian billionaires as key suppliers for Russia’s war machine.

The report cited Russian government contracts as showing that Alfa-Bank had provided loans to a slew of Russian defense enterprises, including a major bullet producer in Tula at the height of the war last year, and currently has credit lines extended to the Uralsky Optiko-Mekhanichesky plant, an optical-systems maker for Russian bombers, and to raw-materials suppliers for nuclear weapon and missile producers.

Proekt also cited government contracts as showing that AlfaStrakhovanie, the billionaires’ insurance group, had provided insurance for military units active in the war in Ukraine, as well as for more than a dozen Russian defense manufacturers, including the Kalashnikov machine gun producer.

In a statement in response to the report, a spokesperson for Fridman said that he and Aven owned stakes only indirectly in Alfa-Bank and AlfaStrakhovanie and, after relinquishing their rights as shareholders in the companies, could no longer direct or manage either of them. The spokesperson said Alfa-Bank had decided to exit all business with Russian defense enterprises, while AlfaStrakhovanie had no more contracts with Russian defense businesses or military units.

Fridman, once seen as one of the more liberal members of Russia’s business establishment, has carefully limited his comments on the war.

In a letter to employees of LetterOne, his U.K. holding company, in the days that followed Russia’s invasion, he said the war was a “tragedy” and called for an end to the bloodshed.

This week, Arkady Volozh, a co-founder of the tech giant Yandex, became the second Russian business titan to publicly condemn the war in Ukraine.

The only other major Russian businessman to publicly denounce the war is Oleg Tinkov, an exiled former owner of Tinkov Bank, one of Russia’s biggest private banks, who slammed the war as “crazy” last year and renounced his Russian citizenship in protest. Tinkov’s public antiwar stance appeared to help win him a reprieve from the British government, which last month said it was lifting sanctions on the tycoon.

The Alfa Group billionaires have long maintained a delicate balance between their business operations and relationships in the West, and their business interests in Russia. They funneled a large part of the $14 billion in proceeds from the 2014 sale of their stake in TNK-BP, a Russian oil concern, into international investments spanning retail to energy. Both have stressed they are politically neutral.

But Aven’s relationship with Putin stretches back to the early 1990s when he served as a minister in Yeltsin’s government and Putin served as deputy mayor of St. Petersburg.

In testimony to Robert S. Mueller III, as part of the special counsel’s investigation into Russian interference in the 2016 U.S. presidential election, Aven admitted meeting with Putin every quarter, including in 2016. He said that during these meetings he would receive “implicit directives” from Putin and that he understood there would be “consequences” if he did not implement them.

The Treasury Department on Friday also levied sanctions on Fridman and Aven’s closest business partners, German Khan and Alexey Kuzmichev, major shareholders in Alfa Group until March 2022, as well as on the Russian Union of Industrialists and Entrepreneurs, a powerful lobby group for Moscow’s business elite, known as the RSPP.

Documents seen by The Washington Post indicate that the RSPP was preparing to mount a major new lobbying effort to lift Western sanctions on its members. The Treasury Department said Friday that Fridman chaired an RSPP committee and was also put under sanction for having acted directly or indirectly on behalf of the RSPP.