Former Tinkoff owner Oleg Tinkov convicted of tax fraud and fined over $500 million

The United States Department of Justice has fined Oleg Tinkov nearly $509 million, and handed the Russian a suspended one-year jail sentence for committing fraud. 

The former owner of the now disbanded WorldTour cycling team Tinkoff, which included Peter Sagan and Alberto Contador, pleaded guilty on October 1 to felony charges of concealing more than $1 billion in assets to avoid paying tax, after he gave up his US citizenship in 2013. He was indicted for this offence in 2019, because US citizens are required to declare income and pay taxes even if they live and work outside the country. 

Tinkov became a US citizen in 1996, and is the founder of Tinkoff Banks, previously known as Tinkoff Credit Services. He also has businesses in the electronics, pasta and beer sectors.

The 53-year-old billionaire paid bail of £20 million last year to avoid going to jail on remand, after he was arrested in February 2020 in London with the US seeking extradition. However, Tinkov managed to contest on medical grounds, because he is undergoing a UK-based intensive treatment plan for acute myeloid leukaemia and graft versus host disease. 

The United States Department of Justice claims that Tinkov had initially hoped that his fine would amount to less than half of the $500 million he is now required to pay. 

A United States Department of Justice statement read: "As required under his plea agreement, prior to sentencing, Oleg Tinkov, aka Oleg Tinkoff, paid $508,936,184, more than double what he had sought to escape paying to the U.S. Treasury through a scheme to renounce his U.S. citizenship and conceal from the IRS large stock gains that he knew were reportable. This includes $248,525,339 in taxes, statutory interest on that tax and a nearly $100 million fraud penalty. Tinkov was additionally fined $250,000, which is the maximum allowed by statute, and sentenced to time served and one year of supervised release.

"Tinkov was told of his filing and tax obligations by both the U.S. Embassy in Moscow and his U.S.-based accountant. When asked by his accountant if his net worth was more than $2 million for purposes of filling out the expatriation form, Tinkov lied and told him he did not have assets above $2 million. When his accountant later inquired whether his net worth was under $2 million, rather than answer the question, Tinkov filled out the expatriation form himself falsely reporting that his net worth was only $300,000. 

"On Feb. 26, 2014, Tinkov filed a 2013 individual tax return that falsely reported his income as only $205,317. In addition, Tinkov did not report any of the gain from the constructive sale of his property worth more than $1.1 billion, nor did he pay the applicable taxes as required by law. In total, Tinkov caused a tax loss of $248,525,339, which he has paid in full with substantial penalties and interest as part of his plea, together with tax liabilities for other years."