Prosecutors in New York City on Oct. 31 charged a Brooklyn resident and two Russian-Canadian nationals with illegally exporting millions of dollars worth of electronics, including semiconductors and other components, to sanctioned Russia amid its ongoing invasion of Ukraine, the Department of Justice announced.
A criminal complaint unsealed Monday accuses Nikolay Goltsev, 37, and Kristina Puzyreva, 32, both of Montreal, Canada, and Salimdzhon Nasriddinov, a 52-year-old Brooklyn resident and Russia-Tajikistan dual citizen, of taking part in a “global procurement scheme” on behalf of sanctioned Russian entities, including companies linked to the Russian military.
The U.S. government increased existing sanctions on Russia last year in the wake of its invasion of Ukraine in February, restricting its ability to access the finance, materials, and technology it needs to support and sustain its war against its neighbor.
However, an array of sanctions had already been in place for Russia prior to its invasion, owing to its 2014 incursions into Ukraine, cyberattacks, use of chemical weapons, and alleged election interference.
According to prosecutors, the defendants—over the course of a year—evaded sanctions and U.S. laws by smuggling over 300 shipments of restricted items, valued at approximately $10 million, to Russia in order to aid the Kremlin’s ongoing invasion of Ukraine.
Some of the electronic components and integrated circuits smuggled into Russia by the defendants were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, prosecutors said.
‘Sophisticated Procurement Network’
“With these defendants in U.S. custody, we have disrupted a sophisticated procurement network allegedly used to procure critical technologies for the Russian military’s advanced weapons systems,” said Assistant Attorney General Matthew G. Olsen of the DOJ’s National Security Division. “The Justice Department is committed to imposing accountability and exposing tactics used by hostile nation-states to illicitly acquire items they need to perpetuate their brutal campaigns.”According to prosecutors, the defendants used two corporate entities registered in Brooklyn—SH Brothers Inc. and SN Electronics Inc.—to facilitate their sanctions evasion scheme, which began in January 2022.
Through those entities, they were allegedly able to illegally source and purchase millions of dollars worth of dual-use electronics from U.S. manufacturers and distributors, and then smuggle them to sanctioned individuals and companies in Russia.
Mr. Goltsev communicated directly with U.S. manufacturers and distributors via aliases such as “Nick Stevens” or “Gio Ross,” prosecutors said.
The electronic components were then sent out to various locations in Brooklyn before being shipped to multiple “intermediary corporations” located in other countries, including Turkey, Hong Kong, India, China, and the United Arab Emirates. From there, the components were rerouted to Russia, officials said.
‘Critical High-Priority Items for Russia’s Military’
Many of the illegally smuggled electronic components and integrated circuits shipped through the corporate entities were critical in the production of advanced Russian precision-guided weapons systems, owing to Russia’s lack of domestic production, prosecutors said.Some were found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including the “Torn-MDM radio reconnaissance complex, the RB-301B ‘Borisoglebsk-2’ electronic warfare complex, the Izdeliye 305E light multi-purpose guided missile, the Vitebsk L370 airborne counter missile system, Ka-52 helicopters, Orlan-10 unmanned aerial vehicles (UAVs) and T-72B3 battle tanks,” prosecutors said.
During the period charged in the complaint, SH Brothers Inc. made hundreds of shipments to Russia valued at over $7 million, the DOJ said.
All three of the defendants knew the electronics being shipped to Russia would likely be used by the Kremlin in its attacks on Ukraine, prosecutors said.
“The arrests announced today demonstrate our sustained focus on targeting illicit Russian procurement networks, especially those attempting to acquire sensitive U.S. technologies that BIS has identified as critical high-priority items for Russia’s military,” said Matthew S. Axelrod, assistant secretary of commerce for export enforcement at the Bureau of Industry and Security.
“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 the final destination in Russia. We will use all of our tools to hold such actors to account,” Mr. Axelrod added.
The three defendants were charged Monday with smuggling, conspiracy to violate sanctions, and wire fraud conspiracy.
Authorities said they also seized more than $1.1 million from domestic bank accounts associated with the sanctions evasion scheme on Monday.
It is not immediately clear if the three individuals have legal representation.
