Freedom Holding, the Kazakh financial firm that has sponsored some of FIDE’s major events in the last year and is run by billionaire Timur Turlov, is now under investigation by the U.S. Department of Justice, according to CNBC.

The American business news network reported on Friday that the Nasdaq-traded company is being investigated by federal prosecutors and the Securities and Exchange Commission (SEC) counsel over “compliance issues, insider stock moves, and an offshore affiliate tied to sanctioned individuals.” According to CNBC, the U.S. Attorney’s Office for Massachusetts is also making early inquiries into Freedom Holding, which occurs after a civil probe unearths evidence of possible crimes.

Freedom Holding describes itself as a provider of investment banking and brokerage services to Central Asia and Eastern Europe. According to CNBC, the company leases a 15,250-square-foot office in the Trump Building in New York, but its headquarters is in Almaty, Kazakhstan.

Their CEO is 35-year-old Moscow-born billionaire Timur Turlov, who is worth an estimated $3.2 billion, according to Forbes. He was formerly a citizen of Russia and St. Kitts and Nevis in the Caribbean but renounced his citizenship to become a citizen of Kazakhstan in 2022.

Turlov is a major chess enthusiast and has become FIDE’s main partner, sponsoring some of its biggest events. In 2023, he came to FIDE’s rescue just months before the World Championship match was scheduled to start, providing the 2 million euro prize fund and hosting the match in Astana, Kazakhstan.

Since then, Freedom Holding has also sponsored major events such as the 2022 World Rapid & Blitz, also in Astana, the 2023 Women’s Grand Prix in Nicosia, Cyprus, the 2023 FIDE World Cup in Baku, Azerbaijan, and the World Schools Teams Championship in Aktau, Kazakhstan.

In January this year, Turlov became the president of the Kazakh Chess Federation and talked during an interview with FIDE about how he wants to help chess grow in the country.

However, several red flags were raised by Forbes about Turlov and the company’s practices prior to its involvement with chess. More details of that were uncovered in August by Hindenburg Research, a group of short-selling analysts, which accused Freedom Holding of a litany of fraudulent and illegal activities.

The report unveiled what it described as a “laundry list of red flags,” including evidence that it “brazenly skirts sanctions, shows hallmark signs of fake revenue, commingles customer funds then gambles assets in highly levered, illiquid, risky market bets and displays signs of market manipulation in both its investments and its publicly traded shares.”

CNBC reports that the SEC’s investigation into Freedom Holding and Turlov intensified after the report by Hindenburg Research.

Hindenburg Research also detailed how Freedom Holding, following Russia’s invasion of Ukraine, sold its Russian business to a Freedom employee for $140 million in order to avoid sanctions. According to a former executive interviewed by Hindenburg Research, Turlov still secretly controls the entity.

Following Russia’s 2022 Ukraine invasion, $FRHC fire-sold its Russian business to a Freedom employee for $140 million in order to avoid sanctions.

Turlov still secretly controls the entity, according to a former executive we interviewed. (7/n) pic.twitter.com/sr0LzEkkVf

— Hindenburg Research (@HindenburgRes) August 15, 2023

Hindenburg Research alleges that Freedom Holding “still does business in the Russian market and that the company has openly flouted sanctions along with anti-money laundering (AML) and know-your-customer (KYC) rules.” Ukrainian authorities have placed Freedom Holding and Turlov on a sanction list and frozen their assets due to their Russian ties.

Another former Freedom executive told the group:

“I have never seen an organization so unstructured and just blatantly like—I’m sorry for my words—but taking a s*** on regulations and rules and basically everything as much as this.”

Freedom Holding has denied the allegations made in the report and said they are without merit, according to Forbes. In a recent interview in Kazakhstan, Turlov called the claims “misinformation,” according to CNBC.

Chess.com has reached out to FIDE for a comment on this story, but has not received a response. FIDE’s CEO, GM Emil Sutovsky, has previously denied that Freedom Holding was involved in any wrongdoings in response to a question by GM Peter Heine Nielsen on X/Twitter.

That is weird – you don’t know anything about Turlov, who moved to Kazakhstan 10+ years ago, settled there, begot kids etc. You have no clue about the essence of Freedom Finance holding, that is traded on NASDAQ. But yet again you push your agenda at all cost. Pathetic.

— Emilchess (@EmilSutovsky) March 13, 2023