Hunt for Russians continues? US charges ‘Putin’s oligarch’ banker Oleg Tinkov with tax fraud, demands extradition from UK

The US Department of Justice has unsealed the indictment against Oleg Tinkov, accusing the Russian-born businessman of failing to pay taxes after renouncing his US citizenship and threatening him with six years behind bars.

Tinkov, 52, was detained and released on bail in London earlier this week, pending an extradition hearing. On Thursday, the US Department of Justice unsealed the indictment against him, dated September 26, 2019.

The DOJ accuses Tinkov of failing to report and pay taxes on the “constructive sale of his worldwide assets” when he renounced his citizenship in 2013, three days after the initial public offering of his bank’s shares on the London Stock Exchange. Tinkov allegedly reported his income that year was less than $206,000, and his net worth as $300,000 in the expatriation papers, despite supposedly earning more than $1 billion from the sale of his TCS bank shares.

If extradited to the US and convicted, Tinkov could face up to six years in prison – three on each count of the indictment – as well as additional supervised release, and have to pay restitution and monetary penalties to the IRS.

The banker has reportedly posted a £20 million ($25.5 million) bail and agreed to remain under house arrest from 7pm to 7am, report to the police three times a week, and surrender his passports.

In January, Russia warned its citizens that they were being “hunted” by the US around the world, after the arrest of Dmitry Makarenko on the Pacific island of Saipan. 

Any Russian who has reason to believe they would be of interest to the Americans “should assess the consequences of traveling abroad” because “there is, in fact, no safe place, no guarantee” they would not be arrested, Deputy Foreign Minister Sergey Ryabkov said at the time.

Tinkov might have guessed the US would eventually pursue him after his name was included on the list of “Russian oligarchs” – apparently copied from Forbes magazine – in July 2018, as part of the CAATSA sanctions bill adopted the year before.

Only two countries in the world – the US and Eritrea – levy a tax on their citizens regardless of where they live. While the Eritrean two-percent tax has been widely criticized as a violation of human rights, the US tax – which can be as high as 40 percent – has escaped condemnation. Washington also taxes all foreigners who reside in the US, whether temporarily or permanently, and has not hesitated to charge foreign citizens and entities for violations of US laws or sanctions – even if they did not take place on US soil – while denying recourse to foreigners for harm perpetrated by US troops or law enforcement on their territory.

While the IRS is notorious for throwing the book at alleged US tax dodgers, clearly not all of them are created equal. For example, investor Bill Browder faced no scrutiny after he renounced his citizenship for tax purposes in 1998. Indeed, he was the driving force behind the Magnitsky Act to sanction Russia in 2012 – of which the CAATSA was the most recent outgrowth – after Moscow accused Browder and his company, Hermitage Capital, of tax avoidance.

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