Oleg Tinkov, a billionaire Russian bank magnate, pleaded guilty Friday to tax fraud. He lied about his net worth on a tax return after he lost his U.S. citizenship in 2013.
Oleg Tinkov talks to the media at a Tinkoff... [+] cycling team press conference held in London on May 28, 2010. ASSOCIATED PRS
The Key Facts
The DOJ announced Friday that Tinkov will be paying $506 million in back taxes and penalties, plus interest. This comes more than a year since Tinkov was first arrested for two counts of filing a false tax return. Tinkov will be sentenced to time served by federal officials at a hearing this month. Each count of false tax returns can result in a three-year prison sentence, according to the DOJ last year. Forbes reached out to Tinkov's lawyer for comment.
Tinkov was one of the many benefits of American citizenship. However, Tinkov cannot avoid the obligation to support the country that he chose. Stephanie Hinds, acting U.S. Attorney for the Northern District of California stated in a statement.
$7.7 Billion According to Forbes, that is Tinkov's net worth.
Tinkov, a Russian native, founded Tinkoff Bank 15 years ago. It is one of the largest online banks in the world. Federal prosecutors indicted Tinkov in a 2019 indictment. The bank's shares were valued at over $1 billion when it went public in 2013. The DOJ claims that he renounced his U.S. citizenship within a few days of the bank's initial public offering. However, he listed his net worth at just $300,000. This allowed him to avoid the exit tax levied upon certain high-net-worth expatriates. Federal prosecutors also charged him with filing a false income tax return for 2013 one year later.
After decades of trying to clamp down on the wealthy Americans who leave the United States and move to low-tax countries, the federal government has imposed stricter tax regulations on wealthy expats in 2008 and 2004. Current law requires that expatriates who have a net worth of more than $2 million and whose average income in the past five years has exceeded $171,000 pay substantial taxes on any gains they make from their assets.
This is how the IRS calculates exit tax if you give up the U.S.