Man charged with smuggling U.S. microelectronics technology to Russia
By SDCN Editor
A dual Russian-German citizen who has resided in Russia and Cyprus was charged by criminal complaint, unsealed Thursday, with export control violations, smuggling, wire fraud, and money laundering offenses based on his alleged participation in an ongoing scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military.
Arthur Petrov, 33 was arrested on Aug. 26 in the Republic of Cyprus at the request of the United States.
“As alleged in the complaint, Arthur Petrov conspired to smuggle U.S. microelectronics technology with military applications to Russia, the type of components used by the Russian military in its unjust invasion of Ukraine,” said Assistant Attorney General Matthew Olsen of the Justice Department’s National Security Division. “The Justice Department will not tolerate efforts to circumvent our export control laws to fuel the Russian war machine and those who try will find no refuge from U.S. justice.”
According to court documents, Petrov is a dual Russian-German national who works for LLC Electrocom VPK, a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. Petrov and two co-conspirators (CC-1 and CC-2), who are Russian nationals also working for Electrocom, operated an illicit procurement network in Russia and elsewhere overseas. As alleged, following Russia’s invasion of Ukraine in February 2022 and continuing until August 2023, they fraudulently procured from U.S. distributors large quantities of microelectronics subject to U.S. export controls on behalf of Electrocom. To carry out the scheme, Petrov, CC-1, and CC-2 used shell companies and other deceptive means to conceal that the electronic components were destined for Russia. The technology that Petrov and his co-conspirators procured during the course of the conspiracy has significant military applications and includes various types of electronic components of the sort that have been recovered in Russian military hardware on the battlefield in Ukraine, such as Russian guided missiles, drones, and electronic warfare and communications devices.
To perpetuate the scheme, Petrov first acquired the controlled microelectronics from the U.S.-based electronics exporters using a Cyprus-based shell company, Astrafteros Technokosmos LTD (Astrafteros), which he operates. Petrov procured these sensitive electronics components by falsely representing to the U.S. exporters that Astrafteros was purchasing the items for fire security systems, among other commercial uses, and that the ultimate end-users and destinations of the electronics are companies in Cyprus or other third countries — when in fact the components are destined for Electrocom in Russia, which supplies manufacturers for the Russian military. The microelectronics that Petrov procured as part of the conspiracy include, among other things, microcontrollers and integrated circuits that are on the Commerce Control List maintained by the Commerce Department and cannot lawfully be exported or re-exported to Russia without a license from the Commerce Department. Invoices provided to Petrov by the U.S. distributors expressly noted that these microcontrollers and integrated circuits are subject to U.S. export controls.
To evade these controls, Petrov, CC-1, and CC-2 worked together to transship the controlled items procured by Petrov using pass-through entities operated by CC-1 and CC-2 in third countries. CC-1 and CC-2 then caused the items to be shipped, sometimes through yet another country, to the ultimate destination: Electrocom in Saint Petersburg, Russia. At all times, Petrov, CC-1, and CC-2 concealed from the U.S. distributors that they were procuring the controlled electronics components on behalf of Electrocom and that the items were destined for Russia. During the course of the conspiracy, Petrov, CC-1, and CC-2 procured from U.S. distributors and shipped to Russia more than $225,000 worth of controlled electronics components with military applications.
Petrov is alleged to have participated in an international illicit procurement network based in Russia, using shell companies to smuggle shipments from U.S. distributors of microelectronics with military applications through intermediary countries in order to conceal the ultimate destination of these sensitive materials to Russia.
“Petrov knew that the transactions and shipments were in contravention of U.S. export controls relating to Russia,” said U.S. Attorney Damian Williams for the Southern District of New York. “Efforts to illicitly supply Russia with U.S.-sourced military technology represent an affront to national security and will continue to be met with criminal prosecutions by this office.”
Petrov is charged with one count of conspiracy to defraud the United States, one count of conspiracy to violate the Export Control Reform Act (ECRA), three counts of violating the ECRA, one count of conspiracy to smuggle goods from the United States, three counts of smuggling goods from the United States, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering, A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI and the Department of Commerce’s Bureau of Industry and Security are investigating the case, with assistance provided by the FBI’s Legal Attaché offices in Poland, Germany, and Athens, Greece; the Justice Department’s National Security Division; and the Justice Department’s Office of International Affairs. The Republic of Cyprus National Police also provided assistance in effecting the defendant’s arrest and detention at the request of the United States.
