A Russian man who has lived in Hong Kong has been taken into US custody and charged with smuggling large quantities of American-made military-grade microelectronics to Russia.
The US Department of Justice has charged Maxim Marchenko, 51, and his two unnamed co-conspirators, also Russian citizens, for allegedly using shell companies based in Hong Kong to conceal the fraudulent procurement of so-called OLED micro-displays.
The latter can be used in rifle scopes, night-vision goggles, thermal optics, and other weapon systems, federal prosecutors in Manhattan said. Quite obviously, all this has helped Russia in its ongoing invasion of Ukraine.
According to the prosecutors, members of Marchenko’s network had constructed an elaborate cover story, claiming that the micro-displays were not going to Russia but instead going to China and other countries for use in electron microscopes for medical research.
Marchenko also used front companies in Hong Kong to conceal the fact that payment for the OLED micro-display – again, a dual-use technology – comes from Russia.
In total, between May 2022 and August 2023, Marchenko’s front companies funneled more than $1.6 million to the US in support of the procurement network’s efforts to smuggle the goods to Russia.
The Justice Department's Task Force KleptoCapture, which was created to enforce sanctions, export restrictions, and other measures in response to Russia's invasion of Ukraine, coordinated the case.
“According to the complaint, Marchenko employed a web of shell companies as part of an overseas smuggling ring to ship dual-use US technology with military applications to Russia in contravention of US law,” said assistant attorney general Matthew Olsen of the Justice Department’s National Security Division.
“Today’s action reinforces the Department’s commitment to protect US security and counter Russian aggression in Ukraine through the vigorous enforcement of our export control laws.”
“Following Russia’s unjust invasion of Ukraine, Marchenko and his co-conspirators are alleged to have used shell companies and other deceptive measures in order to secure US-manufactured microelectronics, with applications including in rifle scopes, night-vision goggles, thermal optics, and weapon systems, for use by Russians,” added Damian Williams, US attorney for the Southern District of New York.
Marchenko was charged with seven criminal counts including wire fraud, smuggling, money laundering and four conspiracy counts, and could, if convicted, face several decades in prison.
On Aug 31st, federal prosecutors in Manhattan also charged Arthur Petrov, a dual Russian-German citizen, with smuggling microelectronics technology with military uses to Russia. Petrov was detained in Cyprus.
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