According to the investigation, an effort to smuggle a dual-use export-controlled item to Russia in contravention of American export laws and regulations led to the forfeiture of around $826,000.
According to court documents and testimony, beginning in 2018, managers of a Latvian corporation allegedly planned to smuggle a Connecticut-made jig grinder into Russia along with managers of By Trade OU, an Estonian business, and individuals and a Russian company. This was done in violation of U.S. export laws and regulations.
Jig grinders are high-precision grinding machine systems that do not need export license for nations in the European Union but do because of their possible use in nuclear proliferation and defence activities in Russia.
The Export Control Reform Act in 2018 as well as Export Administration Regulations (EAR), which limit the export of goods that could materially harm U.S. foreign policy and national security, did not require the defendants to apply for, receive, or possess a license or authorization from US Department of Commerce to export or re-export the jig grinder to Russia at any time.
Several people and organizations allegedly involved in this plan have been indicted in the District of Connecticut on conspiracy charges, violating the Export Control Reform Act, smuggling products out of the country, and participating in a global money laundering conspiracy.
Trade OU pleaded guilty to a count of conspiring to violate the Export Control Reform Act and a count of conspiring to launder money abroad on December 1, 2022. By Trade, OU pleaded guilty and acknowledged that it had accepted money from a Russian business known as “Company B” to buy a jig grinder from a Latvian business that had negotiated to buy it from a Connecticut manufacturer.
On March 29, U.S. District Judge Victor A. Bolden issued an order for the forfeiture of $484,696 sent to Connecticut manufacturer as part of attempted purchase of jig grinder.
The ruling was part of a related civil forfeiture proceeding. Judge Bolden mandated that By Trade OU lose an extra €312,192.44 (about $342,000) in connection with the company’s punishment on April 4, 2023.
The announcement was made by the District of Connecticut’s U.S. Attorney Vanessa Roberts Avery, Task Force KleptoCapture Director Andrew Adams, Homeland Security Investigations (HSI) Acting Special Agent in Charge Michael J. Krol, Office of Export Enforcement Special Agent in Charge Rashel D. Missouri, and FBI Special Agent in Charge Robert Fuller.
The Office of Export Enforcement of U.S. Department of Commerce’s in Boston, the FBI, the HSI Field Offices in New Haven, Portland, Oregon, and The Hague, the Netherlands, all participate in this investigation. The Latvian State Police, Estonian Tax and Customs Board, Latvian Tax and Customs Police, and Prosecutor General’s Offices of both the Republics of Latvia and Estonia are aiding the investigation.
The case is presently being prosecuted by Trial Attorney Matthew Anzaldi of the National Security Division’s Counterintelligence as well as Export Control Section and Assistant U.S. Attorneys Rahul Kale, Konstantin Lantsman, and David Nelson for the District of Connecticut. The Office of International Affairs of Justice Department was beneficial.
The Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force, coordinated the investigation. Task Force KleptoCapture is responsible for enforcing the extensive sanctions, export controls, and economic countermeasures that the United States, its allies, and partners abroad have imposed after Russia’s unprovoked military invasion of Ukraine.
The task force, established by the Attorney General on March 2, 2022, will continue to use all of the department’s resources and powers to combat attempts to evade or undercut the coordinated actions the U.S. government took in response to Russian military aggression. The Office of the Deputy Attorney General will lead it.
Organized Crime Drug Enforcement Task Forces Program is used to prosecute this case. Drug traffickers, money launderers, gangs, and transnational criminal organizations are identified, disrupted, and dismantled by OCDETF using a prosecutor-led and intelligence-driven strategy that uses the strengths of local, state, and federal law enforcement agencies.
