Novatek's former CFO sentenced for tax crimes as U.S. targets Russian gas giant

Sept. 22 (UPI) -- The former chief financial officer for the Russian natural gas company Novatek was sentenced Thursday to more than seven years in prison for tax crimes.

Mark Anthony Gyetvay of Naples, Fla., was also ordered to serve three years of supervised release and pay a $350,000 fine and around $4 million in restitution to the United States, the Justice Department said in a news release.

The news came as, coincidentally, the United States issued new sanctions targeting subsidiaries and suppliers of Novatek amid the war in Ukraine.

Gyetvay was convicted in March of failing to file a Report of Foreign Bank and Financial Accounts, known as a FBAR, as well as making a false statement to the IRS and willfully failing to file tax returns.

Prosecutors said Gyetvay had worked as a certified public accountant in the United States and Russia until becoming an executive with the Russian gas giant.

Beginning in 2005, Gyetvay opened two accounts at a Swiss bank to hold substantial assets, together valued at more than $93 million at one point.

"Over a period of several years, Gyetvay took steps to conceal his ownership and control over these funds, including removing himself from the accounts and making his then-wife, a Russian citizen, the beneficial owner of the accounts," prosecutors said.

"Additionally, despite being a CPA, Gyetvay did not file his 2013 and 2014 U.S. tax returns."

Last week, the U.S. Treasury Department's Office of Foreign Assets Control announced new sanctions targeting Novatek's Arctic LNG 2 project, which could complicate Russia's plans to expand liquefied natural gas capabilities.

The sanctions target Novatek's transshipment terminals for liquefied natural gas in Murmansk and Kamchatka. According to the news agency Interfax, Arctic Transshipment -- a subsidiary of Novatek added to the sanctions list -- has planned to launch the Kamchatka terminal at the end of this year.

In 2018, UPI reported that Novatek had shipped its first batch of liquefied natural gas to China using a so-called Northern Sea Route.

The northern passageway is a shipping lane in Russia's economic zone that runs along the Arctic coast to the Bering Strait. Novatek said it shipped its first cargos of LNG from its northern Yamal project to China using the route.

Russian President Vladimir Putin visited the Murmansk region in July and stopped by Novatek's center for the construction of gas-liquefying lines for the company's Arctic LNG-2 project.

The development of parts of the Arctic north of Russia has reportedly left its environment at risk from scrap materials and oil residue.