Five Russian nationals and two U.S. nationals have been charged with conspiracy and other offenses related to a global procurement and money laundering scheme conducted on behalf of the Russian government. Among them is suspected FSB officer Vadim Konoshchenok, who was arrested in Estonia for allegedly attempting to smuggle military equipment across the border into Russia.
According to a press statement released by the U.S. Department of Justice on December 13, Russian citizens Yevgeniy Grinin, 44, Aleksey Ippolitov, 57, Boris Livshits, 52, Svetlana Skvortsova, 41, and Vadim Konoshchenok, 48, along with US nationals Alexey Brayman, 35, and Vadim Yermolenko, 41 face a range of charges including conspiracy to violate the U.S. Export Control Reform Act (ECRA), smuggling, and failure to comply with the Automated Export System relating to the transportation of electronics.
The defendants allegedly conspired to obtain military-grade and dual-use technologies from U.S. companies for use by Russia's defense sector, some of which can be used for the development of nuclear and hypersonic weapons, quantum computing and other military applications. They also stand accused of attempting to smuggle sniper rifle ammunition, an act which violates U.S. sanctions imposed earlier this year.
According to the U.S. Department of Justice, Alexey Brayman surrendered to the FBI on Tuesday, while Vadim Yermolenko was arrested in New Jersey. Vadim Konoshchenok had previously been arrested by the Estonian Internal Security Services (KAPO) on December 6 at the request of the United States, with extradition now pending. Meanwhile, the other defendants all remain at large.
The defendants were allegedly affiliated with Moscow-based companies Serniya Engineering and Sertal LLC, both of which operate under the direction of the Russian intelligence services to procure advanced electronics and sophisticated testing equipment to facilitate the research and development of Russia's military industrial sector.
Serniya and Sertal were both placed under U.S. sanctions following Russia's full-scale invasion of Ukraine in February 2022, as a result of their involvement in the scheme. Sanctions were also put in place against individuals affiliated with the network, who were considered "instrumental to the Russian Federation's war machine," including Yevgeniy Grinin.
Global Procurement Scheme
According to the indictment, Aleksey Ippolitov allegedly relayed requests for certain items from the Russian side to Yevgeniy Grinin and Svetlana Skvortsova, both of whom were employees of Sertal.
Grinin and Skvortsova then secured funding and shipping routes to complete these transactions, tasking Boris Livshits with procuring the requested items from U.S. companies.
Livshits opened and controlled a range of shell companies and associated bank accounts in the New York City area, which he used to route the shipments and layer financial transactions in order to advance the scheme. According to the U.S. Department of Justice, some of these activities were conducted in coordination with Vadim Konoshchenok, Alexey Brayman and Vadim Yermolenko.
Konoshchenok, who is suspected to be an FSB officer, would ship or physically smuggle items including dual-use electronics, military-grade tactical ammunition, which originally came from the U.S., into Russia from Estonia.
When, on October 27, Konoshchenok was stopped at the Estonian-Russian border, he was, according to the indictment, found to be in possession of 35 different types of semiconductors and other electronic components ordered by Livshits. Konoshchenok also allegedly had in his possession thousands of U.S.-made 6.5mm bullets, which are used in military sniper rifles.
On November 24, Konoshchenok was stopped again as he attempted to cross the border into Russia. On this occasion he is alleged to have been carrying approximately 20 cases containing thousands of bullets, including tactical rounds and .338 military sniper rounds, all of which originated in the U.S.
According to the U.S. Department of Justice, Konoshchenok had also discussed "fabricating" business records with Livshits in order to conceal the ammunition shipments, on one occasion describing them as "auto parts."
As a result of Konoshchenok's arrest on December 6, the Estonian authorities searched a warehouse held in his son's name, recovering approximately 375 pounds (170 kg) of ammunition.
Brayman and Yermolenko, who were both based in the United States, were allegedly responsible for fabricating shipping documents and invoices, as well as repackaging and reshipping items to intermediary destinations around the world, including to Konoshchenok in Estonia, before they eventually arrived in Russia.
Yermolenko and Brayman also assisted Livshits in establishing and managing dozens of shell companies and corresponding bank accounts throughout the U.S., which were used to conduct the scheme.
Livshits, who interfaced directly with companies in the U.S., regularly used the alias "David Wetzky," making false claims about the ultimate destination of the acquired items and their actual intended use.
Like Yermolenko and Brayman, Livshits is also alleged to have fabricated shipping documents and invoices as well as repackaging and reshipping items to intermediary destinations to facilitate their eventual arrival in Russia.
U.S. Attorney General: Criminal schemes will not be tolerated
U.S. Attorney General Merrick B. Garland said, that criminal schemes of this kind, which help bolster Russia's military efforts in Ukraine would not be tolerated.
"With three of the defendants now in custody, we have disrupted the procurement network allegedly used by the defendants and Russian intelligence services to smuggle sniper rifle ammunition and sensitive electronic components into Russia," said Garland.
"The Justice Department will continue to vigorously enforce our economic sanctions and export controls against those who enable the Russian government to continue its unjust war in Ukraine," he added.
Grinin, Ippolitov, Livshits, Skvortsova, Brayman and Yermolenko are also charged with bank fraud conspiracy, wire fraud conspiracy and money laundering conspiracy.
Grinin, Ippolitov, Livshits and Skvortsova are additionally charged with conspiracy to violate the International Emergency Economic Powers Act (IEEPA), wire fraud and money laundering.
If convicted of bank fraud or bank fraud conspiracy, the defendants could face up to 30 years in prison.
Editor: Michael Cole