FBI nabs 11 over secret tech exports to Russia

Posted by Emma Woollacott

The FBI says it's busted a secret procurement network disguised as a Texan company and exporting high-tech electronics to the Russian military.

It says that for the last four years, Alexander Fishenko and ten other people were involved in exporting analog-to-digital converters, static random access memory chips, microcontrollers, and microprocessors to Russia, while evading  the government licensing system set up to control such exports.

Most of the technology concerned isn't produced in Russia, but is widely used in military systems such as radar and surveillance systems, missile guidance systems and detonation triggers.

"As alleged in the indictment, the defendants spun an elaborate web of lies to evade the laws that protect our national security," says United States Attorney Loretta E Lynch. "The defendants tried to take advantage of America’s free markets to steal American technologies for the Russian government."

Kazakhstan-born Fishenko moved to to the US in 1994, becoming a citizen in 2003.  In 1998, he founded Texas-based Arc Electronics, which has since then shipped around $50 million- worth of microelectronics and other technologies to Russia, including to the military.

To persuade manufacturers and suppliers to sell them the equipment goods and to evade export controls, the company came up with a series of lies,  hiding the fact that it was an exporter, and claiming to be a manufacturer of traffic lights.

However, the FBI got hold of a Russian Ministry of Defense document designating a subsidiary of Fishenko's Russian company, Apex, as being certified to procure and deliver military equipment and electronics.

It also recovered a letter sent by a specialized electronics laboratory of Russia’s domestic intelligence agency, to an Apex affiliate, complaining that a shipment of microchips was faulty, and demanding replacements.

"In this day and time, the ability of foreign countries to illegally acquire sensitive and sophisticated US technology poses a significant threat to both the economic and national security of our nation," says Houston FBI special agent in charge Stephen L Morris.

"While some countries may leverage our technology for financial gain, many countries hostile to the United States seek to improve their defense capabilities and to modernize their weapons systems at the expense of US taxpayers. The FBI will continue to work aggressively with our partners in the US Intelligence Community to protect this technology and hold accountable those companies that willfully choose to violate our US export laws."