A federal court in Connecticut has ordered the forfeiture of $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.
According to court documents and statements made in court, operators of a Latvia-based corporation conspired with the operator of By Trade OU, an Estonia-based company, as well as individuals in Russia and a Russia-based company, to violate U.S. export laws and regulations and smuggle a jig grinder manufactured in Connecticut to Russia.
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 because of its potential application in nuclear proliferation and defense programs.
At no time did the defendants apply for, receive or possess a license of authorization from the U.S. Department of Commerce to export or reexport the jig grinder to Russia, as required by the Export Control Reform Act of 2018 and the Export Administration Regulations (EAR), which restrict the export of items that could make a significant contribution to the military potential of other nations or that could be detrimental to U.S. foreign policy and national security.
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 this 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.
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, admitting that it received funds from a Russian company, identified in the indictment as “Company B,” to purchase a jig grinder on its behalf from a Latvian company that had arranged to purchase the jig grinder from the Connecticut manufacturer.
U.S. Attorney Vanessa Roberts Avery for the District of Connecticut; Director Andrew Adams of Task Force KleptoCapture; Acting Special Agent in Charge Michael J. Krol of Homeland Security Investigations (HSI), Boston; Special Agent in Charge Rashel D. Assouri of the U.S. Department of Commerce’s Office of Export Enforcement, Boston; and Special Agent in Charge Robert Fuller of the FBI New Haven Field Office made the announcement.
This investigation is being conducted by HSI Field Offices in New Haven, Connecticut; Portland Oregon; 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.
Assistant U.S. Attorneys Rahul Kale, Konstantin Lantsman and David Nelson for the District of Connecticut and Trial Attorney Matthew Anzaldi of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case. The Justice Department’s Office of International Affairs provided valuable assistance.
The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to disrupting and dismantling Russian oligarchs’ networks and preventing the transfer of their assets to the United States in response to Russia’s unprovoked invasion of Ukraine.
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. On April 4, 2023, in association with the sentencing of By Trade OU, Judge Bolden ordered the forfeiture of an additional €312,192.44 (approximately $342,000) seized from By Trade OU.
The total forfeiture amount of $826,000 includes the funds ordered forfeited on March 29, 2023, and on April 4, 2023.
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Key Facts
- State: Federal
- Category: Fraud & Financial Crimes|Violent Crime|Cybercrime|Public Corruption
- Source: DOJ Press Release â†â€â€
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