US arrests finance chief of Russian natural gas group Novatek

Newsletter: Europe Express

The US has arrested one of the most influential executives in Russia’s natural gas industry over alleged tax misconduct linked to tens of millions of dollars held in offshore accounts. 

The Department of Justice in a statement on Thursday said Mark Gyetvay, chief financial officer at Novatek, allegedly schemed to defraud the US by hiding ownership and control over “substantial offshore assets’‘ that at one point were worth more than $93m. He was also accused of failing to file and pay taxes on millions of dollars in income. 

According to an indictment returned by a federal grand jury, Gyetvay between 2005 and 2016 allegedly placed “lucrative” stock options or stock-linked remuneration from a “large Russian gas company” in two Swiss bank accounts, the US justice department said. 

Authorities accused him of seeking to conceal his ownership of the accounts through manoeuvres including making his then Russian wife the beneficial owner. He also allegedly failed to file US tax returns on deadline or filed false ones to hide the fraud, despite being a certified public accountant with work experience in the US and Russia, the justice department said.

Gyetvay, a US national, has held a Russian passport since 2019. He did not immediately respond to requests for comment.

He joined Novatek in 2003 as CFO and a member of the management board to help transform Russia’s top independent gas producer in 15 years into the country’s leading liquefied natural gas processor and exporter. 

Novatek is associated with the billionaires Leonid Mikhelson, its top shareholder, and Gennady Timchenko, a longtime friend of Russian president Vladimir Putin. 

With Gyetvay as deputy chair of the management board since 2010, the company began operating its flagship Yamal LNG project in the Russian Arctic in 2017, attracting large investments from France and China. The company has a second LNG plant, Arctic LNG 2, under construction and a third in planning stages.

Yamal LNG counts France’s TotalEnergies as well as China National Petroleum Corporation and China’s Silk Road Fund as investors, which together own a stake of almost 50 per cent. Arctic LNG 2 is backed by Chinese, Japanese and French investors, who have already committed large stakes to the project.

Gyetvay is deemed to be among the most popular executives in Russia, with various publications ranking him among the top CFOs in the oil and gas sectors in the country and in Europe.

His initial court appearance was scheduled for Thursday in Florida. If convicted on all counts he faces the prospect of decades in prison.

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