home Export Controls, Russia, Trade Security & Related Russians Nabbed by DOJ in an Export Controls Violations Ring

Russians Nabbed by DOJ in an Export Controls Violations Ring

A Brooklyn resident, a naturalized U.S. citizen, and two Russian nationals were arrested in last week for alleged violations of U.S. export control laws. If they are found guilty, they face as much as 25 years in prison and millions of dollars in fines.

The Justice Department announced last week that Alexey Barysheff of Brooklyn and two Russian nationals, Dmitrii Aleksandrovich Karpenko and Alexey Krutilin. It appears that several search warrants were executed in New York and Denver that included several offices of fake corporations in New York city. This cause appears to follow similar export control violation cases carried out over the years by the Russians.

According to the Justice Department, the men engaged in a criminal conspiracy to get “cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech products to Russia, while evading the government licensing system set up to control such exports.”

It seems that the criminal ring was trying to export digital-to-analog converters and integrated circuits to Russia without U.S. government authorization. The converters are sometimes used in military systems, including radar and surveillance systems, missile guidance systems and satellites.

This matter reminds me of the Arc Electronics case that came to light in 2011 or 2012 involving a complex Russian procurement network supplying micro-circuits and other electronic components to military weapons and development programs. The Arc defendants seems to have followed the same MO: front companies and evasion to secure sensitive microprocessors.

As a result of the Arc case, more than 150 foreign nationals and companies were added to the Department of Commerce, Bureau of Industry and Security Entity List. The Entity List prohibits these companies from receiving any item subject to the EAR unless the exporter obtains a BIS license.

The Russians are not easily deterred. They will keep at it. In fact in the most recent, 2011 and publicly available report to the Congress by the U.S. National Counterintelligence and Security Center, Russia’s appetite for stealing sensitive U.S. dual-use technology was pervasive, aggressive, and likely to continue for several years.

You can read more about this latest case at the Justice Department website.

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