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Thursday, September 21, 2023

Former Special Agent in Charge of New York FBI Counterintelligence Division Pleads Guilty to Conspiring to Violate U.S. Sanctions on Russia

McGonigal conspired to provide services to Oleg Deripaska, in violation of U.S. sanctions.

Charles McGonigal, a former Special Agent in Charge (SAC) of the Federal Bureau of Investigation’s (FBI) Counterintelligence Division in New York, has pled guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and to commit money laundering in connection with his 2021 agreement to provide services to Oleg Deripaska, a sanctioned Russian oligarch. McGonigal pled guilty today, August 15, before U.S. District Judge Jennifer H. Rearden.

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division, and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI made the announcement.

U.S. Attorney Damian Williams said: “After his tenure as a high-level FBI official who supervised and participated in investigations of Russian oligarchs, Charles McGonigal has now admitted that he agreed to evade U.S. sanctions by providing services to one of those oligarchs, Oleg Deripaska.  This Office will continue to hold to account those who violate U.S. sanctions for their own financial benefit.”

Assistant Attorney General of the Justice Department’s National Security Division Matthew G. Olsen said: “Charles McGonigal, by his own admission, betrayed his oath and actively concealed his illicit work at the bidding of a sanctioned Russian oligarch. Today’s plea shows the Department of Justice’s resolve to pursue and dismantle the illegal networks that Russian oligarchs use to try to escape the reach of our sanctions and evade our laws.”

FBI Assistant Director in Charge James Smith said: “Economic sanctions are a critical component of our national security policy.  They must be fully and fairly applied to effectively limit the resources of those who threaten to harm the United States and our global allies.  Sanctions evasion by fraudulent means is a serious criminal offense.  By entering a guilty plea today, former FBI official Charles McGonigal has accepted responsibility for his actions. The FBI is committed to rigorously investigating reported sanctions violations and relentlessly pursue anyone engaged in such activity.”

According to publicly filed court documents and statements made in court proceedings:

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 U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Oleg Deripaska as a Specially Designated National 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.  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.  The U.S. District Court for the District of Columbia affirmed the sanctions against Deripaska.  It found, among other things, that OFAC’s determination that Deripaska acted as an agent of Russian President Vladimir Putin was supported by the evidence.

As an FBI official, McGonigal had helped investigate Deripaska and other Russian oligarchs.  In 2018, while serving as SAC, McGonigal received a then-classified list of Russian oligarchs with close ties to the Kremlin who would be considered for sanctions.  In 2021, McGonigal conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018.  Specifically, following his negotiations with an agent of Deripaska, McGonigal 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 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 payment from Deripaska.

McGonigal, 55, of New York, New York, pled guilty to one count of conspiring to violate the IEEPA and to commit money laundering, which carries a maximum sentence of five years in prison. He is scheduled to be sentenced by Judge Rearden on December 14, 2023.

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 Christina A. Clark of the National Security Division’s Counterintelligence and Export Control Section and Paralegal Specialist Christopher de Grandpre.

Read more at the Justice Department

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