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Friday, June 14, 2024 | Back issues
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Retired top FBI agent in New York indicted for helping Russian billionaire duck sanctions

Prosecutors accuse a former top FBI counterintelligence agent of having performed opposition investigations on behalf of a Russian oligarch whom Robert Mueller name-checked repeatedly in his report on Russian interference in the 2016 presidential election.

MANHATTAN (CN) — A former special agent in charge of the FBI's Counterintelligence Division of the New York Field Office has been arrested on charges that he aided Kremlin-linked billionaire Oleg Deripaska in evading international sanctions.

Charles F. McGonigal, 54, is accused of engaging in illegal conduct in his official capacity as an FBI special agent in charge of the Counterintelligence Division that he believed would benefit Deripaska financially.

McGonigal appeared at his presentment Monday afternoon alongside his defense attorney, Seth DuCharme, a former prosecutor in the Eastern District of New York who oversaw cases against Sinaloa Cartel leader Joaquín “El Chapo” Guzmán, sex-cult leader Keith Raniere and Chinese telecom giant Huawei.

According to the five-count indictment unsealed this morning, McGonigal violated U.S. sanctions by agreeing to investigate a rival Russian oligarch beginning in August 2017 and continuing through and beyond his 2018 retirement from the agency in return for concealed payments from Deripaska, a metals magnate in Russian who faces U.S. sanctions.

“As SAC, McGonigal supervised and participated in investigations of Russian oligarchs, including Deripaska,” the complaint states. “Among other things, in 2018, McGonigal , while acting as SAC, received and reviewed a then-classified list of Russian oligarchs with close ties to the Kremlin who would be considered for sanctions to be imposed as a result of Russia's 2014 conflict with Ukraine.”

McGonigal is charged alongside Sergey Shestakov, a 69-year-old court interpreter, with one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act, one count of violating the International Emergency Economic Powers Act, one count of conspiring to commit money laundering, and one count of money laundering. Each of the counts carries a maximum sentence of 20 years in prison. 

Shestakov of Morris, Connecticut, is also charged with one count of making false statements, which carries a maximum sentence of five years in prison.

Before his retirement in 1993, Shestakov had been diplomat for the Ministry of Foreign Affairs of the Soviet Union and the Russian Federation since 1979.

“They both previously worked with Deripaska to attempt to have his sanctions removed, and, as public servants, they should have known better,” U.S. Attorney Damian Williams for the Southern District of New York wrote in a statement Monday morning. “This Office will continue to prosecute those who violate U.S. sanctions enacted in response to Russian belligerence in Ukraine in order to line their own pockets.”

Williams signed the sealed grand jury indictment on Thursday, Jan. 12.

McGonigal and Shestakov were arrested on Saturday evening and their presentment Monday was before U.S. Magistrate Judge Sarah L. Cave in Manhattan.

The case is being prosecuted by the Department of Justice’s public corruption unit. Assistant U.S. Attorneys Hagan Scotten, Rebecca Dell and Derek Wikstrom are in charge of the prosecution with assistance from trial attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

U.S. District Judge Jennifer Rearden, a Biden appointee, will preside over McGonigal and Shestakov's eventual trial.

Russian metals magnate Oleg Deripaska attends Independence Day celebrations at Spaso House, the Moscow residence of the U.S. ambassador, on July 2, 2015. (AP Photo/Alexander Zemlianichenko, File)

Deripaska, who made his money in the aluminum business, is a close ally of Russian President Vladimir Putin and was mentioned multiple times in special counsel Robert Mueller’s report on interference in the 2016 presidential election.

Former President Donald Trump eventually pardoned his 2016 campaign chair, Paul Manafort, after Mueller's investigation led to Manafort's conviction of eight financial crimes. Manafort's ties to Deripaska are well documented.

The Treasury Department’s Office of Foreign Assets Control — the body that administers sanctions after an executive order is issued — placed Deripaska on its “blocked persons list” in 2018. He later sued the Treasury Department over foreign sanctions imposed on his business dealings, describing himself in the complaint “as the “latest victim of this country’s political infighting and ongoing reaction to Russia’s purported interference” in the 2016 election.”

Deripaska says the investments have made his investments toxic, with his net worth dropping $7.5 billion once the Treasury Department put him on its blocked persons list. After his losses, Forbes now pegs Deripaska’s net worth at $3 billion. He calls himself the founder of aluminum manufacturing groups EN+ Group and United Company Rusal, mechanical engineering firm Russian Machines and auto conglomerate GAZ Group.

U.S. Treasury officials lifted sanctions in January 2019 against aluminum giant United Company Rusal, EuroSibEnergo and EN+ Group, a vertically integrated aluminum and power producer that owns more than 50% of Rusal.

Deripaska had once been the richest person in Russia and the ninth richest in the world before nearly losing nearly of all his fortune in 2008 due to crashing markets and substantial debts.

U.S. prosecutors charged but never arrested Deripaska in September 2022 for allegedly conspiring to violate U.S. sanctions and plotting to ensure his child was born in the United States.

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Categories / Criminal, Government, International

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