The U.S. Department of Justice indicted a Russian man residing in Hong Kong, accusing him of smuggling many U.S.-made military-grade microelectronics to Russia. The man faces multiple charges, including conspiracy to defraud the U.S. government, smuggling, telecommunications fraud, money laundering, and four counts of conspiracy. He is currently in custody in the United States.
The arrested Russian man, Maxim Marchenko, 51, reportedly operated several shell companies in Hong Kong, including Alice Components Co. Ltd. (Alice Components), Neway Technologies Limited (Neway), and RG Solutions Limited (RG Solutions). He collaborated with two other Russian men to run an illegal procurement network in Russia, Hong Kong, and other locations. They paid U.S. distributors to conceal the source of funds and purchased many OLED micro-displays. From May 2022 to August 2023, the involved shell companies funneled over $1.6 million into the United States for illegal procurement activities.
According to federal prosecutors in Manhattan, OLED micro-displays can be used in rifle scopes, night vision goggles, thermal imaging, and other weapon systems. Prosecutors allege that Marchenko and his associates falsely claimed that the technology products they purchased were destined for China and Hong Kong for medical research but were ultimately intended for Russia.
One of the co-conspirators (CC-1) is identified as a director of the Russian company “NPC Topaz” and is subordinate to another co-conspirator (CC-2), who is a shareholder of another Russian electronic manufacturing company, “NPC Granat.” “NPC Granat” was added to the U.S. Department of Commerce’s blacklist in 2016 due to its involvement with Russia’s weapon-related business.
The indictment states that CC-2 arranged for Russian companies to transfer funds to Marchenko’s shell companies in Hong Kong, which Marchenko then used to purchase micro-displays and other products in the United States. The indictment also mentions that CC-1 once sent an email to a company stating that the purchased micro-displays would be used for medical purposes and claimed that the ultimate end-user of these products was the National Health Commission of the Chinese Communist Party (CCP).
The indictment further reveals that on June 29, 2022, Marchenko informed one of his co-conspirators that the White House had added five Chinese companies to the trade blacklist just a day earlier, citing their involvement in supporting Russia’s military and defense industry. The co-conspirator then said they needed to be even more cautious. Marchenko appeared at a hearing on Monday and agreed to be detained, but reports suggest he will seek bail.
Matthew Olsen, Assistant Attorney General for the National Security Division of the U.S. Department of Justice, stated that this case demonstrates the Department’s commitment to protecting U.S. national security and combating Russia’s aggression against Ukraine by actively enforcing export control and sanctions laws. Matthew S. Axelrod, Assistant Secretary for Export Enforcement at the U.S. Department of Commerce’s Bureau of Industry and Security, added that the Department would continue collaborating closely with federal law enforcement agencies to combat and dismantle Russia’s evasive practices involving China and other places.
