|RELEASE: Former agent in charge of NY FBI Counterintelligence Division charged with money laundering tied to concealed money paid by Oleg Deripaska, a sanctioned Russian oligarch.
FOR IMMEDIATE RELEASE
Monday, January 23, 2023
Former Special Agent In Charge Of The New York FBI Counterintelligence Division Charged With Violating U.S. Sanctions On Russia
A Russian Court and Government Interpreter Is Also Charged with Violating U.S. Sanctions on Russia
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a five-count Indictment charging CHARLES MCGONIGAL and SERGEY SHESTAKOV with violating and conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) and with conspiring to commit money laundering and money laundering. SHESTAKOV is also charged with making material misstatements to the FBI. The defendants were arrested on Saturday evening, and they will be presented this afternoon before Magistrate Judge Sarah L. Cave in Manhattan federal court. The case has been assigned to U.S. District Judge Jennifer H. Rearden.
U.S. Attorney Damian Williams said: “As alleged, Charles McGonigal, a former high-level FBI official, and Sergey Shestakov, a Court interpreter, violated U.S. sanctions by agreeing to provide services to Oleg Deripaska, a sanctioned Russian oligarch. They both previously worked with Deripaska to attempt to have his sanctions removed, and, as public servants, they should have known better. 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.”
FBI Assistant Director in Charge Michael J. Driscoll said: “The FBI is committed to the enforcement of economic sanctions designed to protect the United States and our allies, especially against hostile activities of a foreign government and its actors. Russian oligarchs like Oleg Deripaska perform global malign influence on behalf of the Kremlin and are associated with acts of bribery, extortion, and violence. As alleged, Mr. McGonigal and Mr. Shestakov, both U.S. citizens, acted on behalf of Deripaska and fraudulently used a U.S. entity to obscure their activity in violation of U.S. sanctions. After sanctions are imposed, they must be enforced equally against all U.S. citizens in order to be successful. There are no exceptions for anyone, including a former FBI official like Mr. McGonigal. Supporting a designated threat to the United States and our allies is a crime the FBI will continue to pursue aggressively.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court:
In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property of individuals determined by the U.S. Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide support to individuals or entities engaging in such activities. Executive Order 13660 and regulations issued pursuant to it prohibit making or receiving any funds, goods, or services by, to, from, or for the benefit of any person designated by the U.S. Treasury.
On April 6, 2018, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Oleg Deripaska as a Specially Designated National (“SDN”) in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the “OFAC Sanctions”). According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.
CHARLES MCGONIGAL is a former Special Agent in Charge (“SAC”) of FBI’s Counterintelligence Division in New York, who retired in 2018. While working at the FBI, MCGONIGAL supervised and participated in investigations of Russian oligarchs, including Deripaska. SERGEY SHESTAKOV is a former Soviet and Russian diplomat who later became a U.S. citizen and a Russian interpreter for courts and government offices.
In 2021, MCGONIGAL and SHESTAKOV conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018. Specifically, following their negotiations with an agent of Deripaska, MCGONIGAL and SHESTAKOV agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. As part of their negotiations with Deripaska’s agent, MCGONIGAL, SHESTAKOV, and the agent attempted to conceal Deripaska’s involvement by, among other means, not directly naming Deripaska in electronic communications, using shell companies as counterparties in the contract that outlined the services to be performed, using a forged signature on that contract, and using the same shell companies to send and receive payments from Deripaska.
MCGONIGAL and SHESTAKOV were aware that their actions violated U.S. sanctions because, among other reasons, while serving as SAC, MCGONIGAL received then-classified information that Deripaska would be added to a list of oligarchs considered for sanctions as part of the process that led to the imposition of sanctions against Deripaska. In addition, in 2019, MCGONIGAL and SHESTAKOV worked on behalf of Deripaska in an unsuccessful effort to have the sanctions against Deripaska lifted. In November 2021, when FBI agents questioned SHESTAKOV about the nature of his and MCGONIGAL’s relationship with Deripaska’s agent, SHESTAKOV made false statements in a recorded interview.
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CHARLES MCGONIGAL, 54, of New York, New York, and SERGEY SHESTAKOV, 69, of Morris, Connecticut, are charged with one count of conspiring to violate and evade U.S. sanctions, in violation of the IEEPA, one count of violating the IEEPA, one count of conspiring to commit money laundering, and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. SHESTAKOV is also charged with one count of making false statements, which carries a maximum sentence of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding work of the FBI New York Field Office’s Counterintelligence Division and the valuable assistance from U.S. Customs and Border Protection as well as the New York City Police Department.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Hagan Scotten, Rebecca T. 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.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
 As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.