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The U.S. Department of Justice has arrested the chief financial officer of Novatek, Russia’s largest private gas company and biggest LNG exporter, on charges of tax fraud.
In a statement, the DoJ said that Mark Gyetvay had engaged in a scheme to defraud the United States by hiding his ownership of sizeable offshore assets—a sum of about $93 million—and had also failed to file tax returns and pay taxes “on millions of dollars of income.”
According to the DoJ, Gyetvay engaged in the concealment practice after he became the chief financial officer of Novatek, upon which he was allegedly presented with “lucrative stock options and/or stock-based compensation”.
Gyetvay then proceeded to set up two Swiss bank accounts, according to the DoJ allegations, where he put these assets and then removed himself as the owner of the accounts by transferring ownership to his then-wife, who was a Russian citizen.
In addition to this asset concealment, Gyetvay also “allegedly did not timely file his U.S. tax returns, nor did he file all of the required Reports of Foreign Bank and Financial Accounts (FBARs) forms certain U.S. taxpayers are required to file annually that disclose their control over assets maintained in foreign bank accounts.”
On top of that, according to the allegations, some of the taxes that Gyetvay did file were false. He also allegedly submitted a false offshore compliance form with the U.S. tax authorities, saying that his former failure to submit the forms relevant to holdings in foreign banks had not been wilful.
According to a report in the Financial Times, Mark Gyetvay, who helped expand Novatek into the LNG export major it is today, is one of the most popular business executives in Russia and internationally in the oil and gas industry. If found guilty, he faces decades in prison.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.