Charles McGonigal, ex-FBI official, charged with violating Russia sanctions, money laundering

Washington — The former top counterintelligence official at the FBI’s New York field office has been arrested and charged with violating U.S. sanctions on Russia and money laundering, the Justice Department said Monday.

Charles McGonigal, 54, was accused in a five-count indictment of working for Russian aluminum magnate Oleg Deripaska, who has been under U.S. sanctions since 2018. Sergey Shestakov, a former Russian diplomat turned U.S. citizen who worked as an interpreter for federal courts and prosecutors, was also charged in the scheme.

Federal prosecutors allege the pair worked for Deripaska to investigate an unnamed rival Russian oligarch in 2021 in violation of U.S. sanctions and worked to conceal their activity. Shestakov faces an additional charge of lying to FBI investigators. Attorneys for both men could not immediately be identified ahead of a scheduled court appearance Monday afternoon.

McGonigal retired in 2018 after 22 years with the bureau, most recently as a special agent in charge of the FBI’s Counterintelligence Division in New York. The Justice Department said he “supervised and participated in investigations of Russian oligarchs, including Deripaska.”

In a separate case, McGonigal is also facing federal charges in the District of Columbia related to at least $225,000 in cash he allegedly received from a person with business interests in Europe and who worked for a foreign intelligence service. 

In that nine-count indictment also unsealed Monday, McGonigal allegedly hid from the FBI the nature of his relationship with the former foreign security officer, who later served as a source for the bureau in a criminal investigation involving foreign political lobbying. McGonigal purportedly had “official supervisory responsibility” over the lobbying activities, the Justice Department said in a release. His initial appearance in federal district court in Washington has not yet been scheduled.

According to the 21-page indictment unsealed in the New York case on Monday, federal prosecutors said McGonigal knew his actions violated sanctions because, in his capacity as the special agent in charge, he received then-classified information that Deripaska would be added to a list of oligarchs with close ties to the Kremlin who were considered for sanctions.

The sanctions stemmed from Russia’s annexation of the Crimea region of Ukraine in 2014, and Deripaska was punished for having “acted or purported to act” on behalf of a senior Russian government official and for operating in Russia’s energy sector, according to the Treasury Department.

The indictment alleges that McGonigal, while still working at the FBI, was introduced by Shestakov to an “employee and agent” of Deripaska around 2018. The unidentified agent was a former diplomat with Russia’s Ministry of Foreign Affairs and believed to be a Russian intelligence officer. The agent also worked for and reported to Deripaska, according to the court filing.

After McGonigal retired from the FBI, he and Shestakov introduced the Russian agent in 2019 to an international law firm in Manhattan, who the agent sought to retain to have sanctions against Deripaska removed, according to the indictment.

During talks with the firm, which was not identified in court filings, McGonigal met with Deripaska and others in London and Vienna, prosecutors said. Deripaska ultimately signed an engagement letter with the law firm to undertake efforts regarding the sanctions, with Deripaska agreeing to pay the firm $175,000 per month, with $25,000 “earmarked” for “certain other professionals,” the indictment said.

The law firm retained McGonigal as a consultant and investigator on the matter involving Deripaska, federal prosecutors said, and McGonigal purportedly asked the firm to pay him by sending $25,000 to a corporation owned by Shestakov. According to the indictment, the payment was made, but the COVID-19 pandemic interrupted the law firm’s work for Deripaska, and work ceased around March 2020.

In addition to the legal work, McGonigal and Shestakov were recruited by the Russian agent to work directly for Deripaska on a “non-legal matter” around the spring of 2021, the indictment stated. The project involved investigating an unnamed rival oligarch’s interests in a Russian corporation, which Deripaska and the oligarch were contesting control over; assets the oligarch may have hidden outside Russia; and the possibility that the oligarch secretly had a passport issued by a different country. 

In August 2021, McGonigal, Shestakov and the Russian intelligence operative allegedly executed a contract under which a New Jersey-based corporation owned by McGonigal’s friend would receive $51,280 from a Cyprus corporation, as well as monthly payments of $41,790 for “business intelligence services, analysis and research” relevant to the Russian corporation, its business operations and shareholders.

While the payments under the contract would be made to McGonigal and Skestakov on Deripaska’s behalf, none of the parties were named in or signed the contract, federal prosecutors said.

According to the Justice Department, the $51,280 was wired on Aug. 13, 2021, from a Russian bank to the New Jersey corporation, followed by the monthly payments between Aug. 18 and Nov. 18 of that year.

Federal prosecutors alleged McGonigal participated in his friend’s business will working at the FBI, receiving a corporate email account and cellphone under a fake name to hide his work. But McGonigal said he never informed his friend that he was using the New Jersey company to receive payments through the contract with Deripaska, according to the indictment.

Shestakov allegedly forged the friend’s signature on the contract without permission. When questioned about the payments from a Russian bank, McGonigal told his friend it was for “legitimate work” he was performing for a “rich Russian guy,” prosecutors said.

McGonigal’s investigation into Deripaska’s rival oligarch and the Russian corporation spanned from August 2021 to November 2021, during which a subcontractor told McGonigal a third party found “dark web” files that could show “hidden assets valued at more than” $500 million, the Justice Department alleged.

McGonigal and Shestakov then worked to obtain money from Deripaska to buy the “dark web” files, though the activity largely ended in late November 2021 when FBI agents, acting pursuant to a search warrant, seized the pair’s personal electronic devices, according to prosecutors.

After the seizure, Shestakov met with FBI agents at a Manhattan restaurant, during which he allegedly tried to hide the nature and depth of his relationship with McGonigal and the Russian agent. 

McGonigal and Shestakov are charged in the Southern District of New York with one count of conspiring to violate and evade U.S. sanctions, 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 charges carry a maximum sentence of 20 years in prison.

Shestakov is also charged with one count of making false statements, for which he could face up to five years in prison.

The FBI in October 2021 searched two homes belonging to Deripaska, one in Washington, D.C., and a second in New York’s Greenwich Village, which were said to be part of an ongoing investigation in New York.

The Russian billionaire rose to prominence during former special counsel Robert Mueller’s investigation into Russian meddling in the 2016 presidential election for his links to Paul Manafort, a former chairman of former President Donald Trump’s campaign.

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