Russian bank founder agrees to pay $ 500 million to IRS in tax fraud case

WASHINGTON – The founder of one of Russia’s largest private banks has agreed to pay the U.S. Internal Revenue Service (IRS) more than $ 500 million after pleading guilty of tax fraud.

Oleg Tinkov, who was arrested in the UK in February 2020 at the behest of the US, will be sentenced to imprisonment at his October 29 hearing. The Ministry of Justice announced on October 1.

The Russian-born businessman renounced his US citizenship in 2013, days after his online bank TCS went public on the London Stock Exchange.

Tinkov sold some of his majority shareholder stake for more than $ 192 million, and his post-IPO fortune was estimated at more than $ 1.1 billion, the Justice Department said.

US citizens must pay taxes on income earned abroad, as in the case of Tinkov, who returned to Russia in 1996 after receiving his American passport.

Individuals with net worth more than $ 2 million who give up their U.S. citizenship will be required to pay exit tax based on any income and capital gains they would receive on the sale of their assets.

Tinkov claimed in his 2013 statement to the IRS that he owned no more than $ 2 million in assets.

“Nobody like Tinkov who enjoys the immense advantages of US citizenship can escape the obligation to support the country he has chosen. Tax evaders should be aware of the vast reach of US law enforcement, “Acting US attorney Stephanie M. Hinds for the Northern District of California said in the statement.

The Justice Department said the $ 500 million payment – which includes fines and penalties – was more than double its original tax bill.

Tinkov is one of Russia’s most successful entrepreneurs who built and sold two companies before starting his bank in the mid-2000s.

TCS is one of the fastest growing banks in Russia. The share price more than tripled in the past year, leaving Tinkov with a net worth of nearly $ 8 billion, according to Forbes.

The 53-year-old was not extradited to the United States for demonstrating to the court and Justice Department that he was receiving medical treatment to fight leukemia.

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