US Unveils Charges for 2 Schemes to Export Dual-Use Goods to Russia

The U.S. this week unsealed two indictments charging multiple people in schemes to deliver export-controlled dual-use goods to Russia. In both cases, DOJ charged Russian nationals and others with using Brooklyn-based companies to buy goods on behalf of sanctioned end-users or others connected to Russia's military.

As part of the first indictment, a New York resident and two Russian-Canadian nationals were arrested and charged with leading a scheme to evade U.S. sanctions on Russia and illegally export dual-use electronic components and integrated circuits. DOJ said Salimdzhon Nasriddinov, Nikolay Goltsev and Kristina Puzyreva used two U.S.-based companies to export hundreds of shipments of dual-use goods -- worth millions of dollars -- from U.S. manufacturers to Russia.

Matthew Olsen, head of DOJ's National Security Division, said the three people had created a "sophisticated procurement network" to help Russia procure the "critical technologies" it needs for its war against Ukraine.

"To be clear: it doesn’t matter if those networks use a front company or transship these items using intermediaries in places like Turkey, Hong Kong, India, China and the United Arab Emirates, with final destination in Russia," said Matthew Axelrod, head of export enforcement for the Bureau of Industry and Security. "We will use all of our tools to hold such actors to account.”

Using Brooklyn-based SH Brothers and SN Electronics, the trio bought and shipped dual-use electronics that Russia has used in its precision-guided weapons systems against Ukraine. The Commerce Department said the goods were "of the highest concern" because of their use in dangerous equipment and Russia's inability to make the goods themselves. DOJ said some of the circuits and electronic parts had "the same make, model and part number shipped by the defendants" that have been found in seized Russian weapons platforms, signals intelligence equipment and unmanned drones.

In total, Goltsev, Puzyreva and Nasriddinov sold more than $7 million in goods to Russia. The three used tactics to conceal the shipments, including shipping the goods to various transhipment countries before they were eventually delivered to Russia, DOJ said.

The agency said Goltsev, a Russian and Canadian national, would first receive orders from a Russian end user operating in the country's defense and technology sectors. Goltsev then contacted U.S. manufacturers and distributors about buying those items, typically using aliases such as “Nick Stevens” or “Gio Ross,” DOJ said.

He worked with Nasriddinov, a Brooklyn resident and dual Russian and Tajik citizen, to buy the goods using SH Brothers and SN Electronics. The dual-use goods were allegedly sent to "various locations" in Brooklyn before they were shipped elsewhere, including to Turkey, Hong Kong, India, China and the UAE. After arriving, they were then rerouted to Russia, DOJ said.

Puzyreva, a Russian and Canadian national, "operated numerous bank accounts and conducted financial transactions in furtherance of the scheme," the agency said.

DOJ said all three knew the exports had military uses and exchanged messages about ways to avoid getting caught. In one November 2022 message, Goltsev wrote: “We need to figure out why they keep holding the package ... I don’t really understand how they figured [it] out," according to DOJ. He also outlined potential ways to evade law enforcement, saying: "for now large packages will be dangerous until we understand what they figured out ... we will need to think of diversifying the load ... so that not everything is not moving from the same deck."

In the second indictment, DOJ charged Russian citizens Nikita Arkhipov and Artem Oloviannikov, as well as Brooklyn resident Nikolay Grigorev, with conspiracy and other charges related to an export control scheme to help procure items for companies affiliated with the Russian military. The three people used Brooklyn-based Quality Life Cue (QLC) to procure electronic components for Russian firms that develop and manufacture drones.

DOJ said QLC accounts controlled by Grigorev received wire transactions from SMT-iLogic, a Russia-based technology company, totaling more than $270,000. That money was used "almost entirely" to make payments to an unnamed Brooklyn-based electronics distributor or to pay Grigorev’s credit cards, DOJ said, which he used to buy goods from the unnamed Brooklyn company. The agency said SMT-iLogic has ties to the Russia-based Special Technology Centre, which was sanctioned in 2019.

DOJ said a search warrant of Grigorev’s Brooklyn home in June "successfully interdicted" over 11,500 electronic components bought from the Brooklyn company that were awaiting export to Russia. It also said it discovered messages in which Arkhipov, Oloviannikov and Grigorev referenced efforts to circumvent U.S. sanctions, "use 'test' or 'fictitious' orders to test new supply lines to Russia, and discuss front companies in third countries."

Grigorev was arrested on Nov. 1; Arkhipov and Oloviannikov remain at large.