(Updates with comments from Gunvor)

Nov 6 (Reuters) - U.S. prosecutors have launched a money-laundering investigation into a member of Russian President Vladimir Putin's inner circle, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.

According to the report, the U.S. Attorney's Office for the Eastern District of New York is investigating whether billionaire Russian gas trader and Putin associate Gennady Timchenko transferred funds related to allegedly corrupt deals in Russia through the U.S. financial system. The Justice Department is helping the investigation, it said.

The Attorney Office and the Justice Department could not be reached for comment outside regular U.S. working hours.

The prosecutors are investigating transactions in which Gunvor Group, a commodities firm founded by Timchenko, bought oil from Russia's Rosneft and sold it to third parties, the newspaper reported. (http://on.wsj.com/1EjPUxe)

Gunvor told Reuters it had never been an intermediary between a buyer and a seller, "and certainly not for Rosneft. That is factually incorrect. We have never worked this way, and will never work this way."

Gunvor also said it had not been notified of any investigation involving the company.

"The company is caught in political crossfire. We cannot comment on any investigation into Mr. Timchenko," it said.

A spokesman for Timchenko declined immediate comment, saying a statement was expected later in the day.

The report said the transactions predated U.S. sanctions against Russia introduced in March on Timchenko and others over the Ukraine crisis. Timchenko is also co-owner of Russia's No. 2 gas producer Novatek.

Transfers of funds related to the transactions could constitute illegal money laundering if the funds were found to have originated from illicit activity such as, for example, irregular sales of state assets such as oil, the newspaper said.

The newspaper cited one source as saying the probe was also examining whether any of Putin's personal wealth was connected to allegedly illicit funds.

The U.S. Treasury has said Putin has investments in Gunvor and may have access to Gunvor's funds. Both the company and the Kremlin have strenuously denied those allegations.

"When it comes to President Putin, he does not and never has had any ownership, beneficial or otherwise in Gunvor. He is not a beneficiary of Gunvor or its activities, directly or indirectly," Gunvor said on Thursday. (Reporting by Anjali Rao Koppala in Bangalore and Vladimir Soldatkin in Moscow; Editing by Cynthia Osterman and Mark Potter)