Former FBI Agent Charged With Taking Payments From Russian Oligarch Oleg Deripaska
Category: News & PoliticsVia: vic-eldred • 6 days ago • 12 comments
By: Dylan Tokar and C. Ryan Barber (WSJ)
A former high-level FBI agent was indicted on charges he violated U.S. sanctions by accepting secret payments from Russian businessman Oleg Deripaska for work he did investigating a rival oligarch.
Charles McGonigal, who retired from the Federal Bureau of Investigation in 2018 after serving as special agent in charge of counterintelligence in its New York field office, was arrested Saturday at John F. Kennedy International Airport, federal prosecutors said.
The arrest, which occurred alongside that of a former Russian diplomat, represents an about-turn for Mr. McGonigal, who previously supervised investigations into Mr. Deripaska and other Russian oligarchs. He also had been involved in a multiyear investigation into Russia's interference in the 2016 presidential election.
The indictment of Mr. McGonigal is a rare such legal action against a former senior law-enforcement official. His prosecution comes as the Justice Department seeks to step up its efforts to investigate lawyers and others who assist Russian oligarchs, as part of the Biden administration's pressure campaign against President Vladimir Putin following the invasion of Ukraine.
A lawyer for Mr. McGonigal didn't respond to a request for comment.
Mr. Deripaska, a raw-materials magnate who founded Russian aluminum giant Rusal, has been a focus of prosecutors. Long suspected by the U.S. of ties to Russian organized crime, he has spent lavishly over the years to try to burnish his reputation in the West, and to obtain permission to travel to the U.S., specifically.
Mr. Deripaska has denied having links to organized crime. In Washington, he hired high-price consultants, including the late former U.S. Sen. Bob Dole, and in the past threw well-attended parties at the annual World Economic Forum in Davos, Switzerland.
His efforts ran into headwinds. Though courted by some FBI agents as a possible source, the U.S. State Department repeatedly declined to issue him a visa. This year, Mr. Deripaska and other Russian oligarchs were absent from the Davos conference.
Mr. McGonigal first came into contact with an employee of Mr. Deripaska in 2018 while still at the FBI, according to an indictment unsealed Monday. After leaving the agency, he was retained by a law firm to assist in an unsuccessful effort to lift the sanctions placed on Mr. Deripaska that year.
In 2021, Mr. McGonigal and the former Russian diplomat, Sergey Shestakov, began negotiating with Mr. Deripaska's agent about working for the oligarch without the involvement of the law firm, prosecutors say. In conversations with the agent, the two men avoided naming Mr. Deripaska, referring to him instead as "the big guy" and "you know whom," according to the indictment.
Messrs. McGonigal and Shestakov were eventually retained to assist in an investigation into a rival of Mr. Deripaska, with whom the oligarch was contesting control over a large Russian company, prosecutors said. They used shell companies and other means to hide Mr. Deripaska's payments and involvement in the work, they said.
The former FBI agent hired subcontractors to complete his investigation of Mr. Deripaska's rival, an effort that led to the identification of a trove of files on the dark web that Mr. McGonigal believed would be of value to his client, prosecutors said. His investigation ended abruptly in 2021 when the FBI seized his personal devices, said prosecutors.
The indictment unsealed on Monday charges Messrs. McGonigal and Shestakov with violating and conspiring to violate U.S. sanctions imposed on Mr. Deripaska in 2018, as well as with related money-laundering charges. Mr. Shestakov, a U.S. citizen who retired from his diplomatic post in 1993 and worked as an interpreter in U.S. courts, was also charged with making material misstatements to the FBI.
A lawyer for Mr. Shestakov didn't respond to a request for comment. Both men pleaded not guilty in Manhattan federal court during appearances on Monday.
Ina separate case filed in Washington, a federal grand jury indicted Mr. McGonigal on charges he concealed his relationship with a former employee of an Albanian intelligence agency. Prosecutors alleged that Mr. McGonigal received more than $225,000 from that individual and hid aspects of their relationship, which they said created a conflict of interest with his duties as a top FBI official.
That former Albanian intelligence officer later served as an FBI source in a criminal investigation involving foreign political lobbying that Mr. McGonigal supervised, the Justice Department said.
In addition to Messrs. McGonigal and Shestakov, the Justice Department in recent months has brought charges against a number of individuals who prosecutors allege violated U.S. sanctions by working for Russians with ties to the Kremlin. Indictments unsealed last week charge two Russian businessmen for their work managing the operations of a yacht owned by oligarch Viktor Vekselberg. In October, prosecutors announced the indictment of a British businessman who worked as a property manager for Mr. Deripaska.
The prosecution of Mr. McGonigal is likely to be viewed as a stronger warning about the dangers of doing business with sanctioned individuals. As a former FBI agent, Mr. McGonigal was aware that the payments he received from Mr. Deripaska violated the sanctions placed on the Russian oligarch, prosecutors said Monday, at least in part because he had received then-classified information during his time in government indicating that Mr. Deripaska was soon to be sanctioned.
"If there was anyone who should know the issues raised by receiving a substantial amount of money and helping sanctioned oligarchs, it's someone like this former agent," said Brandon Van Grack, a former top official in the Justice Department's national security division.
—Alan Cullison contributed to this article.