A top manager of Russian natural-gas producer Novatek has been arrested in the United States on tax evasion charges related to offshore bank accounts allegedly holding tens of millions of dollars.
The U.S. Department of Justice said on September 23 that Mark Gyetvay was arrested after a federal grand jury in Florida indicted him the day before.
Novatek is Russia’s biggest independent producer of natural gas. Gyetvay has served as the face of the company to Western investors and is listed as deputy chairman of the company’s management board on the company’s website.
Gyetvay is accused of defrauding the United States by concealing his ownership of offshore assets and by failing to pay taxes on millions of dollars of income.
As part of his compensation package as Novatek’s chief financial officer from 2003 to 2014, Gyetvay allegedly received stock options or other stock-based compensation.
Beginning in 2005, Gyetvay allegedly opened the first of two Swiss bank accounts to hold these assets, the Justice Department said. The accounts at one point had a total value of more than $93 million.
“Over a period of several years, Gyetvay allegedly took steps to conceal his ownership and control over the foreign accounts and associated assets, such as removing himself and making his then-wife, a Russian citizen, the beneficial owner of the accounts,” the Justice Department said.
The department’s news release did not identify Gyetvay’s wife. It said Gyetvay, who worked as a certified public accountant (CPA) in the United States and Russia, holds both U.S. and Russian passports.
Despite being a CPA, Gyetvay allegedly did not file his U.S. tax returns on time, did not file all required forms for foreign bank accounts, and some of the tax returns he did file allegedly were false, the Justice Department said.SEE ALSO:U.S. Charges Russian Billionaire Tinkov With Tax Fraud
Novatek said in a statement on September 24 that it had yet to receive any official notification or requests from the U.S. government on the case.
“Novatek has not received any official inquiries or other documents from the U.S. authorities or other countries regarding Mark Gyetvay. The company is currently investigating the circumstances of the incident. This situation does not and will not affect the company’s activities,” Novatek said in the statement.
If convicted, he faces decades in prison on charges of wire fraud, tax evasion, assisting in preparing a false tax return, and failure to file a tax return.
The United States is one of the few countries that requires its citizens to file and pay taxes on their worldwide income even if they live and earn their money abroad or spend the entire year outside the U.S. This means that high-earning Americans working overseas often must file and pay taxes in both the U.S. and their country of residence.
The U.S. has a progressive tax rate that tops off at 37 percent for single filers earning more than $518,400.
President Joe Biden has proposed doubling the size of the Internal Revenue Service (IRS), by hiring nearly 87,000 new workers over the next decade as part of a plan to catch tax cheats.
The case against Gyetvay is similar to a case filed last year against Russian-born billionaire Oleg Tinkoff, who was charged with failure to pay taxes on wealth earned abroad.
Tinkoff pocketed a vast fortune when he sold shares in TCS Group Holdings, a digital financial services company operating in Russia, in 2013. Tinkoff lived for a period of time in the United States and acquired a passport, obligating him to pay U.S. taxes.
Tinkoff gave up his U.S. passport in 2013 but still owed an “exit tax” that applies when people give up their American citizenship.
