US prosecutors are reported to have launched a money-laundering investigation into Gennady Timchenko, a billionaire acquaintance of Vladimir Putin and a member of the Russian president’s inner circle, according to the Wall Street Journal.
According to the report, which cites people familiar with the matter, the US attorney’s office for the eastern district of New York is examining whether Timchenko, an oil and gas trader, transferred funds related to allegedly corrupt deals in Russia through the US financial system. The justice department is aiding the investigation, it said.
The paper reported that prosecutors were examining allegations about transactions in which Gunvor Group, a commodities firm co-founded by Timchenko, bought oil from Russia’s OAO Rosneft and sold it to third parties. On Thursday Gunvor issued a statement strongly denying any wrongdoing.
The US investigation is likely to infuriate the Kremlin and comes at a time in which US-Russian relations have sunk following Russia’s annexation of Crimea and its war in Ukraine.
Timchenko and Gunvor have consistently denied that Putin is a beneficiary of the company’s activities. In March, however, the US treasury sanctioned Timchenko and several other Putin associates. US officials said at the time: “Timchenko’s activities in the energy sector have been directly linked to Putin. Putin has investments in Gunvor and may have access to Gunvor funds.”
The Wall Street Journal said the transactions under scrutiny pre-dated US sanctions against Russia. Timchenko sold his majority share in Gunvor the day before he was added to the sanctions list. He still presides over a sprawling business empire and is co-owner of Russia’s second-largest gas producer, Novatek.
Transfers of funds related to Rosneft might constitute illegal money laundering if the funds were found to have originated from illicit activity such as, for example, irregular sales of state assets like oil, the newspaper said.
The newspaper cited one source as saying the investigation would examine whether any of Putin’s personal wealth was connected to allegedly illicit funds.
Rumours that Putin has close links to Gunvor have swirled in Moscow’s political circles for years. In December 2007, the Russian political scientist Stanislav Belkovsky told the Guardian that Putin had secretly amassed a $40bn fortune, concealed via a series of “non-transparent offshore schemes”. Putin was the beneficial owner of “75% of Gunvor”, Belkovsky alleged. Putin denied the claim three months later.
Sources have suggested that Timchenko and Putin served in the same KGB foreign affairs directorate – a claim Timchenko’s aides say is wrong. It is unclear how the two men first met. Timchenko has declined to answer questions on the matter. Both were active in Saint Petersburg in the 1990s and reportedly founded a judo club together.
In a letter to the Guardian in December 2007, Gunvor’s chief executive, Törbjorn Törnqvist, said Putin “was not a beneficiary of its activities”. However, Törnqvist acknowledged the men had been friends since the 1990s.
“Timchenko did indeed know President Putin in the days before the latter became famous,” Törnqvist wrote. “However, suggestions that they share a KGB heritage or have been in business together are completely wide of the mark.”
This year, Forbes estimated Timchenko’s wealth at $15.3bn (£9.3bn) and called him “one of the most powerful people in Russia”. In the wake of US sanctions Timchenko – who has Finnish and Russian citizenship – is said to have moved from his home in Zug, Switzerland, and returned after more than a decade away to Moscow.
Timchenko set up the oil-trading firm Gunvor Group in 2000, which held a small share of the market until 2003, when the breakup of Yukos, the oil firm of Putin’s enemy Mikhail Khodorkovsky, offered a unique opportunity. Gunvor’s revenues grew from $5bn in 2005 to $43bn in 2007, a feat that many doubt could have been accomplished without impeccable political connections.
A leaked 2008 diplomatic cable from the US embassy in Moscow dubbed Russia’s oil trading business “opaque”, and said oil exports from state-owned companies were deliberately funnelled through favoured oil traders. The cable added: “Of particular note in the Russian oil trading business is Gunvor. The company is rumoured to be one of the sources of Putin’s undisclosed wealth.”
In a statement on Thursday Gunvor said the US department of justice had not notified it of any investigation. It said the company had been caught in a “political crossfire” and was the victim of “baseless cocktail talk” and “second- or third-hand rumours”.
The firm said it had been “very transparent” with US authorities, responding, for example, in 2011 to a subpoena request served on Castor Americas, a Gunvor subsidiary. It said the substantive allegations of manipulated oil pricing “don’t even add up”, adding: “Gunvor is not and never has been involved in any such scheme. Every single payment and margin is accounted for.” It said it had not bought any oil from Rosneft for two years and all previous transactions were transparent.
A statement from Timchenko said he had not been informed of any investigation by US investigative bodies, and his business activities had always been conducted “in strict compliance with the law”. It said he had never been part of Gunvor’s management and was no longer a shareholder, but was confident it had also always acted lawfully.
A spokesman for the Kremlin said on Thursday that the allegations were seen as an attack on Putin.
“The west does it continuously,” Dmitry Peskov said. “And we cannot express anything but bewilderment.”
He added that he had no detailed information about the case.
The US attorney office and the justice department were not immediately available for comment.
