Friday, October 5, 2012

Illegal Military Exports To Russia; 11 Indicted In NY

State Espionage

“As alleged in the indictment, the defendants spun an elaborate web of lies to evade the laws that protect our national security. The defendants tried to take advantage of America’s free markets to steal American technologies for the Russian government. But U.S. law enforcement detected, disrupted, and dismantled the defendants’ network.” 
United States Attorney Loretta E. Lynch

An article in Bloomberg yesterday says that eleven persons have been indicted for "illegally exporting high-tech microelectronics from the United States to Russian military and intelligence agencies." The eleven, the FBI says, are part of "a Russian military procurement network operating in the United States and Russia."
The case is “the first-ever criminal prosecution of a large-scale Russian military procurement network operating within the United States,” said Robert Nardoza, a spokesman for Loretta Lynch, U.S. attorney in Brooklyn, New York. A federal indictment dated Sept. 28 was unsealed today.
One of the accused is Alexander Fishenko, 46, an owner and executive of both the Houston-based export firm Arc Electronics Inc. and a Russia-based procurement firm, Apex System LLC. He is also charged with operating as an unregistered agent of the Russian government, the Justice Department said. Most of the other defendants were employees of Arc or Apex, the government said.
The microelectronics involved are subject to strict government controls, the Justice Department said. They can be used in radar and surveillance systems, weapons guidance systems and detonation triggers, according to the government. Arc shipped at least $50 million worth of microelectronics and other technology to Russia without an export license, the government said in a memorandum today to U.S. Magistrate Judge George C. Hanks Jr. in Houston.
Of the eleven, eight have been arrested and three remain at large. Illegal procurement is a form of espionage, of theft by means of free markets. Espionage is a way for nations to obtain by illegal means that which they cannot produce or create for themselves. It is also theft of sensitive technology that is often funded by a nation's government, drawing from the coffers of taxpayers.

That nation-states like Russia (and China) continue to rely on illegal procurement activities speaks of their current inability to duplicate the necessary research environments to come up with innovation; the western model of liberal democracy is still best. "The defendants if convicted face as long as 20 years in prison on the most serious charges, violating the International Emergency Economic Powers Act and the Arms Export Control Act," Bloomberg says.

You can read the FBI release here; and the rest of the article at [Bloomberg]