The Justice Department charged nine people in New York and Connecticut for being part of a network that illegally procures US tech for the Russian military.

The Biden administration announced that they would be a round of criminal charges and sanctions on the participants of this complicated scheme. Apparently, these individuals bypass sanctions by the fraudulent acquisition of tech from US manufacturers, then supply them to Russia. Two oil brokers from Venezuela were arrested for this scheme. Additionally, the defendants were laundering tens and millions of dollars from Russian businessmen other other “sanctioned entities.”

“As I have said, our investigators and prosecutors will be relentless in their efforts to identify, locate, and bring to justice those whose illegal acts undermine the rule of law and enable the Russian regime to continue its unprovoked invasion of Ukraine,” Attorney General Merrick Garland said in a statement.

The New York-based defendants were all Russian nationals, and only two have been arrested. There were four defendants in the Connecticut case; three were Latvian and one Ukrainian. They are currently in the custody of US authorities, according to AP.

The defendants face accusations of conspiring to smuggle a jig grinder, “a high-precision grinding machine,” to Russia. This type of equipment needs a license for export. These machines can be used in nuclear proliferation and defense programs.

The Treasury Department’s Office of Foreign Assets Control also placed sanctions against one of the men charged by the Justice Department, Yury Orekhov (and two of his companies, Nord-Deutsche Industrieanlagenbau GmbH and Opus Energy Trading LLC) for using these entities as a procurement channel for semiconductors and microprocessors. These can then patch combat aircraft and ballistic or hypersonic missile systems. Unfortunately, Orekhov had already sent some of these materials to Russia before the federal agencies caught him violating US export controls.

“Orekhov and Uss also used NDA to ship millions of barrels worth of oil from Venezuela to buyers in Russia and China, working with two other defendants, Juan Fernando Serrano and Juan Carlos Soto, to broker the deals with Venezuelan state oil company PDVSA, upon which the United States placed sanctions in 2019,” the report notes.

The prosecutors said the defendants were using fake companies to purchase supplies for Russia, and these shell companies were submitting false information to US banks, “which processed tens of millions of dollars worth of transactions in violation of the sanctions.”


Another backchannel that the defendants used is cryptocurrency. Though it is tough to track transactions because of its encryption protocol, it is not impossible for the US federal agency to do so.

The prosecutors added that other US-born technologies were sent to Russia that could be used for missile systems, smart munitions, and other military applications.

“We will continue to investigate, disrupt and prosecute those who fuel Russia’s brutal war in Ukraine, evade sanctions and perpetuate the shadowy economy of transnational money laundering,” Breon Peace, the top federal prosecutor in Brooklyn, said in a statement.

Deputy Treasury Secretary Wally Adeyemo also said that Russia is trying to bypass as many loopholes as possible to procure items for their military. They’re pushed by sanctions, and they have a limited number of allies to depend on when it comes to replenishing their supplies. He added that continued enforcement of sanctions could be a critical key for Putin to quit the war.

“We know these efforts are having a direct effect on the battlefield,” Adeyemo said, “as Russia’s desperation has led them to turn to inferior suppliers and outdated equipment.”

The hope is for Russia to eventually run out and simply wave a white flag. The question is, is that even a possibility?