A German craftsman says sanctions are preventing a Russian oligarch from paying $1 million in wages to local workers renovating his vacation homes: report

• Sanctions have blocked Alisher Usmanov from paying workers renovating his villas in Germany, NYT reports.
• The Russian oligarch owes local contractors around $1 million, a craftsman told the outlet.

Sanctions are preventing Russian oligarch Alisher Usmanov from paying an estimated $1 million in wages to German workers renovating his lakeside vacation homes, a local craftsman named Andreas Kitzerow told The New York Times.

From Cyprus to Tegernsee, the luxury yachts and villas of sanctioned Russian billionaires are tucked away in various idyllic corners around the world. This foreign investment can be a powerful source of local income — and some workers are frustrated that it's been suddenly cut off.

Kitzerow, who runs a ceramics business in the German resort town Tegernsee, told the Times that the sanctions placed against Usmanov are "outrageous."

"He has always been reserved, and he has nothing to do with the war in any way, as far as I can tell," he told the outlet. "But they think just because he knows Putin or because he's Russian, they can do this. You shouldn't pass judgment."

Kitzerow did not immediately respond to Insider's request for comment.

Usmanov, who is currently ranked the fifth richest person in Russia with a net worth of $20 billion, made his riches in the metal and mining industries after the collapse of the Soviet Union. He is described by the EU as "one of Vladimir Putin's favorite oligarchs" and has allowed several Kremlin officials to use his various residences.

The craftsman is not the first of Usmanov's staff to reportedly be cut off from wages following Russia's invasion of Ukraine. The crew of the oligarch's 512-foot superyacht, which was seized by German authorities in April, was fired after sanctions prevented wages from being paid to the vessel's staff, Forbes first reported in March.

While the ban on SWIFT's global banking system has made it more difficult to move funds out of Russia, experts previously told Insider that it's still possible for sanctioned individuals to pay out-of-country staff.

Vacation destinations that have built their local economies around Russian tourism and investment have responded differently to the sanctions. Some countries, like Turkey, have taken advantage of the changing geopolitical landscape by positioning themselves as a refuge for Russian billionaires booted from the EU.

Others, such as Cyprus, have moved as far to retract the "golden passports" linked to sanctioned oligarchs, despite their historically active role in the Mediterranean island's economy. Meanwhile, local residents in Germany's Tegernsee village are divided over the oligarchs' fates, per the New York Times report.