WASHINGTON — Authorities arrested a man living in Hong Kong accused of deceiving U.S. companies and shuttling sensitive microelectronics into Russia amid its bloody invasion of neighboring Ukraine.
Maxim Marchenko, originally from Russia, was arrested outside the U.S. this week and extradited to Westchester County, New York, documents filed in federal court show. He’s facing several charges, including alleged conspiracy to defraud the U.S., conspiracy to commit wire fraud and the smuggling of goods.
The dual-use technologies Marchenko is accused of surreptitiously middle-manning for Russia — namely OLED micro-displays from a company based in Dutchess County, New York — can be used for medical imaging and rifle scopes, video games and night-vision goggles, according to the U.S. Department of Justice.
The tech is subject to export administration regulations, which govern shipments overseas. Shell companies allegedly run by Marchenko funneled more than $1 million into the U.S. between May 2022 and August 2023.
“We are laser-focused on rooting out the procurement networks fueling the Russian war machine,” Assistant Secretary for Export Enforcement Matthew Axelrod said in a statement Sept. 18. “Working hand-in-hand with our federal law enforcement partners, we will continue to identify and disrupt Russia’s use of front companies in the People’s Republic of China and elsewhere to evade our controls.”
Microelectronics play a critical role in modern military technology. And erosion of microelectronic capacities threatens national security, U.S. analysts have warned. The CHIPS and Science Act, passed last summer, allocated $2 billion for related research, fabrication and workforce training.
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Russian military hardware, including drones, radios and electronic warfare devices, are reliant upon Western-sourced components, the court documents note. To access them, especially now, as export controls tighten, “Russia relies on third-party transshipment hubs and clandestine procurement and payment networks,” they continue.
“Disrupting the efforts of facilitators and procurement agents like Marchenko, who use their skills and connections to advance the agenda of the Russian war machine, is one of the most important priorities” of Task Force KleptoCapture, said its co-director, David Kim.
The task force was launched in March to enforce sanctions, export restrictions and other economic measures the U.S. levies in response to Russia’s continued attacks on Ukraine. Task force members include agents and analysts from the FBI, Marshals Service, Secret Service and Department of Homeland Security.
Marchenko could face tens of years in prison. Conspiracy to defraud the U.S. carries a maximum penalty of five years, for example. Conspiracy to commit wire fraud carries 20.
Court documents show Marchenko is represented by a federal public defender and is expected to seek bail.
Colin Demarest is a reporter at C4ISRNET, where he covers military networks, cyber and IT. Colin previously covered the Department of Energy and its National Nuclear Security Administration — namely Cold War cleanup and nuclear weapons development — for a daily newspaper in South Carolina. Colin is also an award-winning photographer.
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- Source: https://www.defensenews.com/industry/2023/09/19/us-charges-russian-man-with-smuggling-microelectronics-amid-ukraine-war/
