The former top FBI counterintelligence agent in New York was arrested along with a former Russian diplomat and charged with violating US sanctions against Russia after he left the FBI by trying to help oligarch Oleg Deripaska, delisted to be deleted, the federal prosecutors announced on Monday.
Ex-agent Charles McGonigal was charged Monday in federal court in Washington, DC, in connection with accepting $225,000 in cash – while working for the FBI – from a person with business interests in Europe and an employee of Albania’s overseas intelligence service.
That other person later became an FBI source in a criminal investigation into foreign policy lobbying that McGonigal was overseeing, authorities said.
McGonigal, who faces false statements and other allegations in the case, is said to have also failed to disclose, as requested, that he met with the Albanian Prime Minister and a Kosovan politician during a trip to Albania and Kosovo in October 2017 would have.
“Mr. McGonigal betrayed his solemn oath to the United States in exchange for personal gain and at the expense of our national security,” said FBI Deputy Acting Director Donald Alway.
In Deripaska’s case, a five-count indictment before the US District Court in Manhattan accuses 54-year-old McGonigal and 69-year-old Sergey Shestakov of violating Russia sanctions in addition to money laundering.
Shestakov is a former Soviet and Russian diplomat, most recently an interpreter for the Brooklyn federal court and prosecutors. He has US citizenship.
The Morris, Connecticut resident is also accused of lying to the FBI during interrogation by concealing the nature of his and McGonigal’s relationship with a Deripaska employee who was also allegedly a Russian spy.
The alleged criminal acts on Deripaska’s behalf began a year after New York City resident McGonigal retired from the FBI in 2018 after 22 years of service.
But the indictment says he also used his law enforcement connections before retiring to get an internship at the New York City Police Department for the college-aged daughter of Deripaska’s clerk.
While at the FBI, McGonigal had previously investigated Deripaska, who made his fortune in Russia’s aluminum industry. FBI agents searched properties in New York and Washington linked to Deripaska in October 2021.
McGonigal was arrested at JFK International Airport in Queens, New York, on Saturday night after flying there from the Middle East.
McGonigal and Shestakov, 69, who were also arrested Saturday night, were due to appear in court in Manhattan later Monday.
McGonigal pleaded not guilty and was released on a $500,000 personal guarantee of credit.
The charges against him and Shestakov carry a maximum sentence of 20 years in prison if convicted. McGonigal faces an identical maximum sentence in the criminal proceedings in Washington.
According to McGonigal’s LinkedIn profile, he most recently worked as senior vice president at commercial real estate giant Brookfield Properties. A company spokesman previously said he left Brookfield in January 2022.
CNBC has reached out to McGonigal and Shestakov’s attorneys for comment.
The 21-year indictment against McGonigal says that in 2021 he and Shestakov agreed to investigate a rival Russian oligarch of Deripaska in exchange for covert payments from Deripaska, and did so. Those alleged payments violated sanctions the United States imposed on Deripaska in 2018, the indictment said.
McGonigal, who was in charge of the FBI’s counterintelligence operations in New York from 2016 to 2018, knew his alleged actions violated sanctions after receiving then-classified information about Deripaska’s inclusion on the list of sanctioned oligarchs , according to the indictment. These sanctions were imposed as a result of Russia’s invasion of Ukraine.
FBI Deputy Director Michael Driscoll said in a statement, “Russian oligarchs like Oleg Deripaska wield global malign influence on behalf of the Kremlin and have been associated with acts of bribery, extortion and violence.”
The indictment said that while McGonigal was still serving with the FBI in 2018, Shestakov introduced McGonigal via email to a Deripaska associate who had been rumored by media reports to be a Russian intelligence officer. This Deripaska employee, referred to in the indictment as “Agent-1,” was also a former Soviet and Russian diplomat.
Shestakov asked McGonigal to help the clerk’s daughter get an internship with the New York City Police Department in the areas of “counterterrorism, intelligence gathering and ‘international liaisons,'” the indictment says.
McGonigal agreed to help and told an FBI supervisor who worked for him that he wanted to recruit the Deripaska associate, the indictment says.
“Through McGonigal’s efforts, Agent-1’s daughter received VIP treatment from the NYPD,” the indictment reads.
“An NYPD sergeant assigned to brief Agent-1’s daughter subsequently reported the incident to the NYPD and the FBI because, among other things, Agent-1’s daughter claimed to have an unusually close relationship with ‘an FBI agent ‘ who had given her access to confidential FBI files, and it was unusual for a college student to receive such special treatment from the NYPD and FBI.”
In 2019, after McGonigal retired, he and he introduced the wife’s father to an international law firm in Manhattan, which the Deripaska clerk was trying to keep in order to secure the lifting of sanctions against the oligarch, according to the indictment.
During those negotiations, McGonigal traveled to London and Vienna to meet Deripaska and others at the oligarch’s residences, according to the indictment.
In the electronic communication between McGonigal, Shestakov and the Deripaska employee, the oligarch was not referred to by his last name, but by terms such as “the individual”, “our friend in Vienna” and the Viennese client,” according to the indictment.
Deripaska eventually hired the law firm to lift the sanctions, which cost $175,000 a month, with $25,000 earmarked for “certain other professionals,” according to the indictment.
The law firm retained McGonigal as a consultant and investigator on her work for Deripaska, the indictment document said. McGonigal asked the company to compensate him by wiring $25,000 to a company Shestakov owns, the indictment says.
The law firm’s work for Deripaska was disrupted by the Covid-19 pandemic, and the oligarch stopped paying lawyers around March 2020, the indictment said.
But in spring 2021, Agent-1 began negotiating with McGonigal and Shestakov to work for Deripaska directly, without the law firm “on a non-legal matter not lawful” under US sanctions.
That project involved investigating another oligarch and his interests in a major Russian company, which Deripaska and the other oligarch were fighting to control, the indictment said.
In August 2021, the trio prepared and executed a contract obliging a Cyprus-based company to pay a New Jersey-based company more than $51,000 upon execution of the control and an additional $41,790 per month for “business intelligence services, Analyzes and research” to pay,” the indictment said.
In reality, according to the indictment, the payments would be made to McGonigal and Shestakov, neither of whom were named or signed the contract.
The New Jersey company was owned by a friend of McGonigal’s who arranged for him to participate in his business while McGonigal was still serving as a counterintelligence special agent at the New York FBI office, according to the indictment. McGonigal used a company email account and cell phone under a false name to hide his work, the indictment says.
During the investigation of the second oligarch, the indictment states that McGonigal hired subcontractors to help with the investigation without telling them the name of the client: Deripaska. One of those subcontractors later informed McGonigal that a third party had found so-called dark web files that could reveal hidden US assets belonging to the second oligarch, according to the indictment.
In late November 2021, McGonigal and Shestakov negotiated with Deripaska’s associates to receive money from the oligarch to buy the dark web files, the indictment said.
“This activity largely or completely ceased on or about November 21, 2021, when FBI special agents, pursuant to court-issued search warrants, seized the defendant’s personal electronic devices,” the indictment reads.
Shestakov met with FBI agents at a Manhattan restaurant earlier that day, where he attempted “to conceal the nature and depth of the relationship between himself, McGonigal and Agent-1,” the indictment said.