Top Executive of Russia’s Novatek Arrested in U.S. for Tax Fraud

The chief financial officer of the Russian gas company Novatek and his deputy chairman of the board were detained in the United States on tax fraud allegations.

Mark Gyetvay was charged by a federal grand jury for concealing offshore assets valued up to USD 93 million in the period of 2005-16, Moscow Times writes.

The declaration stated, “Gyetvay reportedly took measures to mask his possession and control of foreign accounts and assets, such as the removal and the making of his then-wife, a Russian citizen, the beneficial owner of the accounts.

Novatek claimed he was not informed of the arrest of Gyetvay in his statement to the RBC news website on Friday and added that the criminal case “does not influence the operations of the firm and will not impact it.”

In a daily briefing with the media on Friday, the Kremlin claimed that the destiny of Gyetvay as Novatek’ s leading executive, however, because of his American citizenship, could not interfere with this case.

Gyetvay is also accused of neglecting to file and pay income taxes in Russia, the certified public accountant who relocated to Moscow in 1995. The US is one of the few nations that compel residents to report their foreign income taxes even if during that time, they live outside the US.

Gyetvay, 62 years of age, risks wire fraud for up to 20 years, tax evasion for 5 years and false statements and tax returns for not filed if convicted for 3 years.

The Department of Justice said Gyetvay will appear before a Florida District Court on Thursday for his first court appearance.

Novatek, the second largest gas producer in Russia and its largest liquefied natural gas producer, is where Gyetvay has worked as the CFO since 2003, and as Deputy Chairman of the Board of Directors since 2010.

The largest owners in Novatek are the billionaires Leonid Mikhelson and Gennady Timchenko, both linked to President Vladimir Putin.

Putin gave Russian citizenship to Gyetvay in 2019 after veteran executive accusations that US and EU sanctions against the Crimean takeover of Moscow in 2014 hinder his capacity to increase Novatek’s new long-term funding.

The US-backed News Organization, Radio Free Europe/Radio Free Liberty (RFE/RL) contrasted Gyetvay’s case of tax fraud with that of Oleg Tinkov’s internet banking tycoon who, after obtaining the US passport, had been accused of disguising assets worth $1 billion.

Earlier this week Tinkov settled with the United States Internal Revenue Service (IRS).