Former top FBI counterintelligence agent Charles McGonigal charged with violating Russia sanctions

The previous high FBI agent in New York for counterintelligence was arrested with an ex-Russian diplomat and charged with violating U.S. sanctions on Russia after he left the FBI by making an attempt to assist the oligarch Oleg Deripaska get off the sanctions listing, federal prosecutors stated Monday.

The ex-agent, Charles McGonigal individually was charged Monday in federal court docket in Washington, D.C., in reference to accepting $225,000 in money — whereas working on the FBI — from an individual who had enterprise pursuits in Europe who had been an worker of Albania’s overseas intelligence service.

That different particular person later grew to become an FBI supply in a legal probe of overseas political lobbying, which McGonigal was supervising, authorities stated.

McGonigal, who is charged with making false statements and different fees in that case, additionally allegedly did not disclose, as required, that in an October 2017 journey to Albania and Kosovo, he had met with Albania’s prime minister and with a Kosovar politician.

“Mr. McGonigal betrayed his solemn oath to the USA in trade for private achieve and on the expense of our nationwide safety,” stated FBI Assistant Director in Cost Donald Alway. 

Within the case associated to Deripaska, a five-count indictment in U.S. District Court docket in Manhattan fees the 54-year-old McGonigal and Sergey Shestakov, 69, with violating the Russia sanctions, along with cash laundering.

Shestakov is a former Soviet and Russian diplomat who most just lately labored as an interpreter for the Brooklyn federal court docket and prosecutors there. He has U.S. citizenship.

The Morris, Connecticut, resident can also be charged with mendacity to the FBI throughout questioning by concealing the character of his and McGonigal’s relationship with an worker of Deripaska’s who was additionally rumored to be a Russian spy.

The alleged legal acts on Deripaska’s behalf started the 12 months after McGonigal, who lives in New York Metropolis, retired from the FBI in 2018 after 22 years of service.

However the indictment says he additionally used his regulation enforcement connections earlier than his retirement to acquire an internship with the New York Police Division for the college-age daughter of Deripaska’s worker.

Whereas on the FBI, McGonigal beforehand had investigated Deripaska, who made his fortune in Russia’s aluminum business. FBI brokers in October 2021 raided proprieties in New York and Washington that were linked to Deripaska.

McGonigal was arrested Saturday night time at JFK Worldwide Airport in Queens, New York, after flying there from the Center East.

McGonigal and Shestakov, 69, who additionally was arrested Saturday night, have been set to look in court docket in Manhattan later Monday.

McGonigal pleaded not responsible and was launched on a $500,000 private recognizance bond.

The fees towards him and Shestakov carry a most jail sentence of 20 years if they’re convicted. McGonigal faces an equivalent most sentence within the legal case in Washington,

McGonigal’s LinkedIn profile says he most just lately labored as a senior vice chairman at industrial actual property big Brookfield Properties. An organization spokesman beforehand stated he left Brookfield in January 2022.

CNBC has requested remark from legal professionals for McGonigal and Shestakov.

The 21-year indictment towards McGonigalsays that in 2021 he and Shestakov agreed to and did examine a rival Russian oligarch of Deripaska in return for hid funds from Deripaska. These alleged funds violated sanctions that the USA imposed on Deripaska in 2018, the indictment says.

McGonigal, who was in command of the FBI’s counterintelligence operations in New York from 2016 to 2018, knew his alleged actions violated the sanctions, having acquired what was then-classified details about Deripaska being added to the listing of sanctioned oligarchs, the indictment says. These sanctions have been imposed because of Russia’s incursion into Ukraine.

FBI Assistant Director in Cost Michael Driscoll, in an announcement, stated, “Russian oligarchs like Oleg Deripaska carry out international malign affect on behalf of the Kremlin and are related to acts of bribery, extortion, and violence.”

The indictment stated that McGonigal, whereas nonetheless serving on the FBI in 2018, was launched by Shestakov through e mail to an worker of Deripaska, who had been rumored in media studies to be a Russian intelligence officer. That Deripaska worker, recognized within the indictment as “Agent-1” additionally was a former Soviet and Russian diplomat.

Shestakov requested McGonigal to assist the worker’s daughter get an internship with the New York Police Division within the fields of “counterterrorism, intelligence gathering and ‘worldwide liaisoning,’ ” the indictment says.

McGonigal agreed to assist, and instructed an FBI supervisor who labored for him that he needed to recruit the Deripaska worker, the indictment says.

“By means of McGonigal’s efforts, Agent-1’s daughter acquired VIP therapy from the NYPD,” the indictment says.

“An NYPD Sergeant assigned to temporary Agent-1’s daughter subsequently reported the occasion to the NYPD and FBI as a result of, amongst different causes, Agent-1’s daughter claimed to have an unusually shut relationship to ‘an FBI agent’ who had given her entry to confidential FBI information, and it was uncommon for a school scholar to obtain such particular therapy from the NYPD and FBI.”

In 2019, after McGonigal retired, Shestakov and he launched the lady’s father to a world regulation agency in Manhattan, which the Deripaska worker sought to retain in an effort to get sanctions on the oligarch lifted, the indictment says.

Throughout these negotiations, McGonigal traveled to London and Vienna to satisfy Deripaska and others on the oligarch’s residences, the indictment alleges.

In digital communications between McGonigal, Shestakov and the Deripaska worker, they didn’t seek advice from the oligarch by his surname, however as an alternative used phrases like “the person,” “our buddy in Vienna,” and the Vienna consumer,” the indictment fees.

Deripaska ended up retaining the regulation agency for work to attempt to carry the sanctions, at a value of $175,000 monthly, with $25,000 earmarked for “sure different professionals,” in keeping with the indictment.

The regulation agency retained McGonigal as a marketing consultant and investigator in its work for Deripaska, the charging doc says. McGonigal requested the agency to compensate him by transmitting $25,000 to an organization owned by Shestakov, the indictment says.

The regulation agency isn’t recognized by title within the indictment.

However on Nov. 29, 2021, every week after being questioned by the FBI, Shestakov filed a registration statement with the Division of Justice, stating he was appearing on behalf of a overseas nationwide in the USA.

The nationwide recognized by Shestakov was Yevgenyi Fokin, whom he stated was the exterior relations supervisor for the EN + Group, an organization that Deripaska based.

Fokin “studies to Lord Barker (the chair of the board of administrators of the corporate) and presumably Mr. Deripaska,” Shestakov stated within the submitting, which first was reported by the media outlet Forensic News in December 2021, after the doc was highlighted earlier that month in a tweet by the journalist Wendy Siegelman.

“Mr. Fokin has communicated with me on behalf of himself and/or his firm looking for skilled help and I’ve tried to facilitate these requests with the assistance of Mr. Charles F. McGonigal, a safety skilled, on an advert hoc foundation,” Shestakov wrote.

The assertion additionally stated that Fokin’s request, Shestakov facilitated “with the assistance of [McGonigal] the retention regulation agency of Kobre and Kim.”

“At Mr. Fokin’s request, I contacted Mr. McGonigal, which resulted in some type of relationship being
reached with Spectrum Threat Options which I imagine continues to be in progress,” Shestakov write.

A spokesperson for Kobre and Kim didn’t instantly reply to a request for remark.

The indictment says that the regulation agency’s work for Deripaska was interrupted by the Covid-19 pandemic, and the oligarch ceased paying the legal professionals in round March 2020, the indictment says.

However within the spring of 2021, Agent-1 started negotiating with McGonigal and Shestakov to work instantly for Deripaska, with out the involvement of the regulation agency “on a non-legal matter not lawful” below U.S. sanctions.

That challenge concerned the investigation of one other oligarch and his pursuits in a big Russian company which Deripaska and the opposite oligarch have been combating for management of, the indictment says.

In August 2021, the trio drew up and executed a contract that required an organization primarily based in Cyprus to pay a New Jersey-based company greater than $51,000 upon execution of the management and one other $41,790 monthly for “enterprise intelligence providers, evaluation, and analysis,” the indictment alleges.

In actuality, the indictment says, the funds can be made to McGonigal and Shestakov, neither of whom was named in, or who signed the contract.

The New Jersey company was owned by a buddy of McGonigal’s who had organized for him to take part in its enterprise whereas McGonigal was nonetheless serving as particular agent in cost for counterintelligence within the New York FBI bureau, in keeping with the indictment. McGonigal had a company e mail account and a cellphone below a false title to hide his work, the indictment says.

Whereas investigating the second oligarch, the indictment says, McGonigal retained subcontractors to help within the probe, with out telling them the title of the consumer: Deripaska. A kind of subcontractors later knowledgeable McGonigal {that a} third social gathering had discovered so-called darkish internet information that might reveal hidden U.S. belongings owned by the second oligarch, the indictment alleges.

In late November 2021, McGonigal and Shestakov negotiated Deripaska’s worker to get funds from the oligarch to buy the darkish internet information, the indictment says.

“This exercise largely or utterly ceased on or about November 21, 2021, when particular brokers of the FBI, appearing pursuant to court-issued search warrants, seized the defendant’s private digital units,” the indictment says.

Shestakov met earlier that very same day with FBI brokers in a Manhattan restaurant, the place he tried “to hide the character and depth of the connection between himself, McGonigal and Agent-1,” the indictment says.

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