Feds charge 11 over $50m secret tech exports to Russia

Feds charge 11 over $50m secret tech exports to Russia

Summary: An unsealed federal indictment suggests $50m worth of microprocessors and other high-tech kit were illegally shipped to Russia, with possible uses including missile guidance systems and detonation triggers.

TOPICS: Security

The FBI says it has busted a secret Russian military procurement network, which involved high-tech equipment being illegally exported from the US to Russia.

The equipment, which included analogue-to-digital converters, microcontrollers, microprocessors and static random access memory chips, could apparently have been used in missile guidance systems, detonation triggers and surveillance systems.

A federal indictment was unsealed on Wednesday, resulting in 11 people being charged over the matter. Eight have been arrested and three remain at large.

According to the FBI, the secret export network centred on a Texas-based export company called Arc and a Moscow-based procurement firm called Apex. The link was Alexander Fishenko, a Kazakhstani who became a US citizen in 2003. Fishenko is the chief executive of Arc and also an Apex executive.

The US agency said Arc had illegally shipped around $50m worth of microelectronics to Russia, falsely classifying the goods on export records. Arc, which claimed to be a manufacturer but was only an exporter, apparently told its own suppliers that it made traffic lights and other innocuous goods.

"We will not rest in our efforts to protect the technological advantage produced by American ingenuity," US attorney Loretta Lynch said in a statement. "And, we will expose and hold responsible all who break our counter-proliferation laws, particularly those, like Fishenko, who serve foreign governments."

The FBI said its investigations had revealed Russian military documents that identified an Apex subsidiary as a certified provider of military equipment and electronics, as well as a letter from Russia's Federal Security Service (FSB) complaining to an Apex affiliate about faulty microchips.

The defendants include Fishenko, two Apex executives and various Arc salespeople and other staff, and the charges range from breaking export controls to obstruction of justice.

Fishenko faces extra charges of money laundering and "acting as an unregistered agent of the Russian government.

Topic: Security

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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  • Such Hypocrisy ...

    Why didn't they (FBI, CIA, NSA, etc) do something about all the technology being sold/stolen/given to the Chinese back during the Clinton administration? I know the Clintonista's will be coming out to defend their idol, just like the Obamite's defend their messiah, but nonetheless, there are foxes in the henhouse.
    • Perhaps the reason is

      the 500 billion in loans from China that Bush borrowed to finance his little Iraq adventure?
  • Hypocrisy is another term for the federal GOV

    The same type of goods are shipped regularly to Israel out of LaGuardia and JFK and other staging points, with nothing but a wink wink (aka hoodwink) of "oversight." The sheer volume of military and tech goods our federal oligarchy delivers at taxpayer expense to their masters in middle east is criminal. But make a ruckus over it and they'll find a way to get you off the player's stage fast.

    "We will not rest in our efforts to protect the technological advantage produced by American ingenuity," US attorney Loretta Lynch said in a statement.

    Except where no rules or accounting apply, as per above. And such bold statements from the feds while our multinational corporations, from the private sector side, inexorably ship the hi-tech industry eastward. Apparently the foxes in the hen-house also enjoy taking long, irresponsible naps. It's pretty apparent the rational behind naming that great Oriental house of drones "Foxconn."