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Prison Sentence, Fine for Man Convicted of Smuggling Electronics to Russia

Wednesday, July 06, 2016
Sandler, Travis & Rosenberg Trade Report

A New Jersey man has been sentenced to 70 months in prison for his role in an international procurement network that obtained and smuggled more than $65 million worth of electronics from the U.S. to Russia in violation of export control laws, according to a Department of Justice press release. The man was also sentenced to three years of supervised release and a $75,000 fine and agreed to the entry of a forfeiture money judgment against him in the amount of $65 million. He had been charged with one count of conspiracy to commit money laundering, one count of conspiracy to smuggle electronics and one count of conspiracy to violate the International Emergency Economic Powers Act.

According to documents filed in this case and statements made in court, the man and his companies are part of a sophisticated procurement network that has surreptitiously acquired large quantities of license-controlled electronic components from U.S. manufacturers and vendors and exported those items to Russia on behalf of Russian business entities that were authorized to supply them to the Russian Ministry of Defense, the Federal Security Service, and Russian entities involved in the design of nuclear warheads, weapons and tactical platforms. The man routinely falsified the true identity of the end-user of the components as well as their value to avoid filling out required export control forms. He also purposefully concealed the true destination of the exported parts by directing that the shipments be sent to various shell addresses in Russia, where they were redirected to a central warehouse controlled by the conspirators’ Moscow-based network.

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