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

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.
Written by David Meyer, Contributor

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.

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