A former top executive at Novatek, Russia's largest independent natural gas producer, has been sentenced by a Florida court to more than seven years in prison for tax evasion.
Judge Joan Ericksen on September 21 sentenced Mark Gyetvay to 86 months behind bars after a jury in March found him guilty of making false statements to U.S. tax authorities, failing to disclose offshore accounts, and failing to file tax returns.
He was ordered to pay more than $4.3 million in restitution and fines.
Gyetvay, 66, served as Novatek’s chief financial officer for more than a decade and was the face of the company to its Western stock investors. He later became deputy chairman of Novatek’s management board.
An accountant who was born and grew up in New Jersey, Gyetvay joined Novatek in 2003 when it was a bit player in Russia’s gas market and received a small stake in the company.
The value of his Novatek stock surged over the years after French giant TotalEnergies and then later Gennady Timchenko, a close associate of Russian President Vladimir Putin, took large stakes in the fast-growing company.
Novatek was valued at around $5 billion at its initial public offering in 2005. It would reach about $80 billion at its peak in 2021.
By 2010, Timchenko, who is sanctioned by the West, had become Novatek's largest shareholder.
Novatek enjoyed preferential treatment due to Timchenko's ties to Putin, analysts have said. The company received large gas fields and the right to export liquefied natural gas.
Timchenko sold his stake in his holding company Gunvor shortly before the sanctions were imposed in 2014 following Russia's illegal annexation of Crimea.
Wealth Hidden
According to court documents and evidence presented at his trial, Gyetvay from 2005 to 2015 “concealed his ownership and control over substantial offshore assets and failed to file and pay taxes on millions of dollars of income,” the Justice Department said in a news release following his March conviction.
Gyetvay, who lives in Naples, Florida, worked as a certified public accountant (CPA) in the United States and Russia before joining Novatek.
Beginning in 2005, Gyetvay opened two accounts at a bank in Switzerland to hold assets amounting to more than $93 million, the Justice Department said.
“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,” the department said.
Additionally, despite being a CPA, Gyetvay did not file his 2013 and 2014 U.S. tax returns and did not file documents on foreign bank accounts, as required, to disclose his control over the Swiss accounts.
As an American citizen, Gyetvay is required to pay U.S. taxes on his worldwide income, even if he spends most of the year in Russia.
At the time of his arrest in September 2021, Gyetvay called the charges “baseless” and said he had already settled them through a voluntary program. He vowed then to vigorously fight the charges.