A large-scale ring that for years allegedly illegally exported cutting-edge microelectronics through JFK Airport to Russian military and intelligence agencies has been busted up by federal authorities, officials announced today.
The 11 defendants charged in an indictment unsealed today “spun an elaborate web of lies to evade the laws that protect our national security,” said Brooklyn US Attorney Loretta Lynch, whose office is prosecuting the case.
“The defendants tried to take advantage of America’s free markets to steal American technologies for the Russian government,” Lynch.
The microelectronics allegedly exported to Russia since 2008 by main defendant Alexander Fishenko, 46, and his Houston-based company Arc Electronics could potentially use for military purposes, including “radar and surveillance systems, weapons guidance systems and detonation triggers,” authorities said.
Because of such sensitive uses, the products are subject to government-licensing rules that control their export, noted prosecutors — who have also charged Fishenko with acting as an unregistered agent for the Russian government.
To get around those rules, prosecutors claim, the defendants “went to great lengths to conceal their procurement activities for the Russian military.”
That included allegedly providing documents that falsely identified who the end user of the micro-electronics would be, concealing the fact that the items would be exporter and misclassifying the items exported on records submitted to the US Commerce Department.
“For example, in order to obtain microelectronics containing controlled, sensitive technologies, Arc claimed to American suppliers that, rather than exporting goods to Russia, it merely manufactured benign products such as traffic lights,” authorities said. ‘Arc also falsely claimed to be a traffic light manufacturer on its Web site. In fact, Arc manufactured no goods and operated exclusively as an exporter.”
In one instance, authorities said, Arc’s procurement director Alexander Posobilov allegedly instructed a Russian procurement company to “make sure that” the end-user certificate said that “fishing boats, and not fishing/anti-submarine ones” were going to be using the microelectronics.
“Then we’ll be able to start working,” Posobilov allegedly told the company.
Authorities said that the Moscow-based company Apex System, which is partly owned by Fishenko and also is charged in the case, was designated by the Russian Ministry of Defense as a company certified to procure and deliver military equipment and electronics. The FBI also found a letter that revealed that Russia’s domestic intelligence agency, the FSB, was receiving microchips exported by Arc from the United States.
Fishenko, Posobilov and the other nine individual defendants face up to 20 years in prison if convicted of the charges.