Oleg Tinkov sniffed $ 1 billion from American tax officials

US Department of Justice revealed claims to the billionaire. At the time of his release from US citizenship in 2013, Tinkov was the owner of TCS shares for more than $ 1 billion, but the US tax authorities reported on the status of only $ 300,000.
Origin source
he U.S. Justice Department revealed the claims of the U.S. authorities to the Russian billionaire, the main owner of Tinkoff Bank Oleg Tinkov F 47. On the website of the department it is reported that Tinkov is accused of tax fraud - when he renounced US citizenship, he allegedly hid $ 1 billion in income and assets from the American authorities.

Registration of LLC in the bank Sphere

The Justice Ministry indictment states that Tinkoff “was the majority shareholder of an online bank that provided financial and banking services to its customers” (Tinkoff Bank - approx. Forbes). As a result of the IPO TCS Group Holding (the parent company of the bank) on the London Stock Exchange in October 2013, Tinkov’s stake in the company began to cost more than $ 1 billion. Three days after the IPO, Tinkov renounced American citizenship. Under US law, a businessman was required to report to the Internal Revenue Service (IRS) about his assets. However, Tinkoff, allegedly in the indictment, owning more than $ 1 billion in shares through a British Virgin Islands-registered entity, filed an unreliable tax return with the IRS. It stated that the businessman’s income for 2013 amounted to $ 205,317. Another document filed by Tinkov in the IRS - the report of a person who renounced US citizenship, also supposedly unreliable, said that his condition was $ 300,000. Tinkov was charged on two counts - 1 ) the manufacture and signature of a knowingly inaccurate tax return; and 2) the manufacture and signature of an inaccurate document.

For each charge, the maximum sentence for a businessman can be 3 years in prison, the US Department of Justice points out. Thus, in total, Tinkov faces six years in prison, as well as fines - $ 250,000 for each item of the charge.

The Justice Ministry notes that the issue of Tinkov’s extradition is being resolved. Tinkov is now in London. On February 27, he appeared before the Westminster Magistrate's Court, where extradition issues are traditionally decided. The businessman paid a security deposit of £ 20 million pounds. At least until April 27, when the next meeting will be held on his case, Tinkov will have to report to the police three times a week, not leave London, and from 7 pm to 7 am be in his London apartment. The businessman had to hand in his Russian and Cypriot passports, as well as a document confirming Italian residence.

Story plot

The indictment was drawn up on September 26, 2019. It was preceded by an investigation by the IRS, which deals with criminal offenses. The act was signed by federal prosecutor David Anderson, assistant prosecutor Jose Oliveira and Christopher Strauss from the Ministry of Justice's tax division. The case is pending in the Northern District Court of California in Auckland. The indictment sets out the plot of the case.
Oleg Tinkov became a U.S. citizen on September 10, 1996. By the time TCS Group Holding entered the IPO in October 2013, Tinkov was the majority shareholder of the company. On April 5, 2013, he became the owner of the Beckett Group Ltd., registered in the British Virgin Islands (BVI). And at the end of May of that year, the Beckett Group became the owner of two more companies registered at the BVI - Tadek Holding & Finance S.A. and Tacos Invest & Finance Inc. According to the indictment, by the time of the IPO of TCS Group Holding on October 25 (the first day of trading in TCS Group Holding shares on the London Stock Exchange - October 22, 2013 - approx. Forbes), Tadek and Tacos owned 93 million and 10 million shares of TCS Group Holding, respectively. This accounted for more than 60% of all TCS shares. During the IPO, Tinkov and his structures sold shares for $ 199 million. Thus, after the IPO, Tinkov owned offshore companies 92 million shares of TCS Group, whose market value exceeded 1 billion on October 27, 2013. On October 28, Tinkov withdrew from US citizenship.

According to U.S. law, for individuals whose fortune exceeds $ 2 million and who decide to withdraw from US citizenship, all property is considered to be sold at a market price the day before they withdraw from citizenship (in the case of Tinkoff, this is October 27, 2013). In US law, this is called "constructive selling." All profits from this “constructive sale” must be taxed in the year you leave the country. Tinkov, as stated in the indictment, not only did not provide the correct information about his assets, but also did not reflect the profit from the “constructive sale” in the tax return.

What TCS Group Holding Says

For the first time, TCS Group Holding announced a lawsuit initiated by the US tax authorities with the participation of Oleg Tinkov in London on February 28. In its disclosure on the London Stock Exchange, the company indicated that Oleg Tinkov took part in the hearings in February-April 2020. At the same time, TCS emphasized that Tinkov participated in the hearings as a private individual, and this does not affect the activities of the group company (Tinkoff Bank, Tinkoff Insurance and Tinkoff Mobile). A few days later, on March 2, the company confirmed the information appeared in the Daily Express tabloid that Tinkov had paid a deposit and would remain in London for the duration of the hearings. "Mr. Tinkov informed us that his team of lawyers is working to resolve this issue as quickly as possible," the report said.

Since the close of trading on the London Stock Exchange on February 27, TCS Group Holding shares have fallen in price by almost 7%.