Gennady Timchenko, 61, who worked for a state oil exporter in the last years of the Soviet Union, helped build Gunvor Group Ltd. into one of the world’s largest oil traders in the late 1990s and 2000s
Gennady Timchenko, a Russian electrical engineer who became an oil-trading billionaire and confidant of President Vladimir Putin, is the focus of a money laundering probe by U.S. prosecutors, two people familiar with the matter said.
Timchenko, 61, who worked for a state oil exporter in the last years of the Soviet Union, helped build Gunvor Group Ltd. into one of the world’s largest oil traders in the late 1990s and 2000s. The company got its start selling Russian crude and fuel, including production from state-controlled Rosneft.
The U.S. Attorney’s Office in Brooklyn is investigating whether Timchenko sought to launder tainted funds through the U.S. financial system, said one of the people, both of whom requested anonymity because they aren’t authorized to speak publicly about the probe. Castor Americas Inc., a U.S. unit of Gunvor, was served with subpoenas by U.S. prosecutors three years ago.
Prosecutors are looking at whether Gunvor bought oil from Moscow-based OAO Rosneft and later sold it to third parties, and whether any of Putin’s wealth is involved, said the Wall Street Journal, which reported the probe earlier. Authorities have asked for information on the prices Cyprus-based Gunvor charged, according to the report.
Zugiel Soto, a spokeswoman for Brooklyn U.S. Attorney Loretta Lynch, declined to comment on the probe. Timchenko isn’t aware of any investigation, his company, Volga Group, said in statement.
“The business activities of Gennady Timchenko have always been conducted in strict compliance with the law,” Volga said.
Gunvor, where Timchenko is no longer a shareholder, also said it had no knowledge of an investigation.
“Gunvor is just caught in political crossfire,” Seth Pietras, a Geneva-based spokesman for the commodities trader, said in a telephone interview. Gunvor “has never been notified of any investigation involving the company as such.”
The Department of Justice hasn’t served subpoenas on any of its affiliates or employees since 2011, when prosecutors sought documents from Castor over oil trading activities, and no member of Gunvor’s management has been subpoenaed, Gunvor said by e-mail.
Gunvor once accounted for more than one-third of Russian seaborne crude exports. It has expanded into other markets and commodities and is no longer a dominant player in the Russian oil market. The company said last month it plans to reduce its holdings in Russia, which include stakes in an oil terminal, pipelines and a coal mine.
Sold Stake
Timchenko sold his stake to co-founder, fellow billionaire and Swedish national Torbjorn Tornqvist in March, the day before he became subject to U.S. sanctions imposed on businessmen considered close to Putin.
“Timchenko has absolutely nothing to do with this company anymore,” Pietras said. Timchenko, who has a home in Cologny, an affluent, lakeside suburb of Geneva, hasn’t been to Gunvor’s office in the city since he was hit with U.S. sanctions, he said.
The transactions being investigated occurred before the U.S. imposed sanctions on Timchenko and other Putin allies in March following Russian intervention in Ukraine, the newspaper said. The trading company said it hadn’t bought crude oil from Rosneft in more than two years and denies any wrongdoing relating to the tenders with the producer.
Pietras said the Rosneft tenders were transparent and included other parties that also bid for the oil. “We bought at the price others did,” he said.
Providing Information
Following Timchenko’s sanctioning in March, Gunvor has “voluntarily’ provided information to U.S. authorities including the Office of Foreign Asset Control. It has also disclosed information to Brooklyn prosecutors, including shareholder lists, corporate structure and details of all sales and purchase contracts with Rosneft, Pietras said by phone.
The probe is also looking at whether Putin’s personal wealth is linked to allegedly illicit funds, according to the Journal. His spokesman, Dmitry Peskov, told the newspaper that he wasn’t aware of any investigation and dismissed allegations of financial ties between the Russian president and Timchenko.
Bloomberg
To contact the reporters on this story: Andy Hoffman in Geneva at ahoffman31@bloomberg.net; Christie Smythe in Brooklyn at csmythe1@bloomberg.net; Del Quentin Wilber in Washington at dwilber@bloomberg.net
To contact the editors responsible for this story: David E. Rovella at drovella@bloomberg.net Will Kennedy
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