Attempted Export Control Violation in Connecticut Lands $826K Forfeiture
A federal court has ordered the forfeiture of approximately $826,000 in funds used in an attempt to export a dual-use high-precision jig grinder to Russia in violation of United States export laws and regulations. The investigation, led by the U.S. Attorney’s Office for the District of Connecticut, uncovered a conspiracy involving Latvia-based corporation operators, Estonia-based company By Trade OU, individuals in Russia, and a Russia-based company.
According to court documents and statements made in court, the defendants conspired to violate U.S. export laws and regulations, smuggling the jig grinder from Connecticut to Russia without obtaining the required license. A jig grinder is a high-precision grinding machine system that does not require a license to export to European Union countries but does require a license for export and reexport to Russia due to its potential application in nuclear proliferation and defense programs.
U.S. authorities, working with Latvian authorities, intercepted the jig grinder in Riga, Latvia, before it was to be shipped to Russia. Several individuals and companies involved in the alleged scheme have been charged by indictment in the District of Connecticut with conspiracy, violation of the Export Control Reform Act, smuggling goods from the United States, and international money laundering conspiracy offenses.
On December 1, 2022, By Trade OU pleaded guilty to one count of conspiracy to violate the Export Control Reform Act and one count of international money laundering conspiracy. In pleading guilty, By Trade OU admitted to receiving funds from a Russian company to purchase the jig grinder on its behalf from a Latvian company that had arranged to purchase it from the Connecticut manufacturer.
U.S. District Judge Victor A. Bolden ordered the forfeiture of $484,696 that had been delivered to the Connecticut manufacturer as part of the attempted purchase of the jig grinder. An additional €312,192.44 (approximately $342,000) was seized from By Trade OU. The investigation is ongoing, and further charges may be pending.
U.S. Attorney Vanessa Roberts Avery stressed that an indictment is merely an allegation, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The investigation is being conducted by HSI field offices in New Haven, Portland (Ore.), and the Hague, Netherlands; the U.S. Department of Commerce’s Office of Export Enforcement in Boston; and the FBI. The Prosecutor-General’s Office of the Republic of Latvia, the Prosecutor General’s Office of the Republic of Estonia, Latvian Tax and Customs Police, Estonian Tax and Customs Board, and the Latvian State Police are assisting the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Rahul Kale, Konstantin Lantsman, and David Nelson of the District of Connecticut.
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Key Facts
- State: Connecticut
- Category: Violent Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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