Date: 07-17-2024

Case Style:

United States of America v. Maxim Marchenko

Case Number:

Judge:

Court: The United States District Court for the District of New York

Plaintiff's Attorney: The United States Attorney’s Office for New York City

Defendant's Attorney:

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Description:

New York City, New York criminal defense lawyer represented the Defendant charged with Illicitly Procuring Large Quantities Of U.S.-Manufactured Dual-Use, Military Grade Microelectronics For Russian Entities
Russian International Money Launderer Sentenced To Three Years In Prison For Illicitly Procuring Large Quantities Of U.S.-Manufactured Dual-Use, Military Grade Microelectronics For Russian Entities

Assistant Attorney General Matthew G. Olsen said: “Today’s sentence holds Mr. Marchenko accountable for his role in a procurement syndicate that funneled U.S.-manufactured military-grade microelectronics to end users in Russia, illegally delivering controlled technologies worth hundreds of thousands of dollars. The Justice Department remains relentlessly focused on dismantling illicit procurement networks led by individuals like the defendant, who use their business skills and connections to advance the Russian war agenda.”

BIS Assistant Secretary of Export Enforcement Matthew S. Axelrod said: “The transshipment of military-grade microelectronics through Hong Kong to Russia helps fuel the engine of Russia’s war machine. Today’s sentencing is just the latest example of our unceasing efforts to target and disrupt illegal Russian procurement networks.”

FBI Executive Assistant Director Robert Wells said: “Marchenko and his co-conspirators operated an international smuggling network of sensitive microelectronics used in military gear and other weapons systems. Today’s sentencing demonstrates the FBI’s resolve in doing our part to protect national security and prevent American military technology from being diverted to foreign adversaries and hostile nation states.”

According to the allegations contained in the Information and other filings and statements made in court:

MAXIM MARCHENKO is a Russian national who resides in Hong Kong and operates several Hong Kong-based shell companies, including Alice Components Co. Ltd. (“Alice Components”), Neway Technologies Limited (“Neway”), and RG Solutions Limited (“RG Solutions”). MARCHENKO and two co-conspirators (“CC-1” and “CC-2”), who are also Russian nationals, operate an illicit procurement network in Russia, Hong Kong, and elsewhere overseas. This procurement network has fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, specifically OLED micro-displays, on behalf of Russia-based end users. To carry out this scheme, MARCHENKO, CC-1, and CC-2 used shell companies based in Hong Kong and other deceptive means to conceal from U.S. Government agencies and U.S. distributors that the OLED micro-displays were destined for Russia. The technology that MARCHENKO and his co-conspirators fraudulently procured have significant military applications, such as in rifle scopes, night vision goggles, thermal optics, and other weapon systems.

To perpetrate the scheme, MARCHENKO and other members of the conspiracy acquired the dual-use OLED micro-displays from U.S.-based distributors using MARCHENKO’s Hong Kong-based shell companies, including Alice Components, Neway, and RG Solutions. Members of the conspiracy, including MARCHENKO, procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that Alice Components was sending the shipments to end users located in China, Hong Kong, and other countries outside of Russia for use in electron microscopes for medical research or hunting rifles. In reality, the OLED micro-displays were destined for end users in Russia. MARCHENKO and other members of the conspiracy concealed the true final destination (Russia) from U.S. distributors for the purpose of causing false statements to the U.S. agencies.

To conceal the fact that these OLED micro-displays were destined for Russia, MARCHENKO and other members of the conspiracy worked together to transship the illicitly procured OLED micro-displays by using pass-through entities principally operated by MARCHENKO in third countries, such as Hong Kong. MARCHENKO then caused the OLED micro-displays to be shipped to the ultimate destination in Russia using, among other entities, a freight forwarder known to provide freight forwarding services to Russia. In addition, MARCHENKO and other members of the conspiracy used Hong Kong-based shell companies, principally operated by MARCHENKO, to conceal the fact that payments for the OLED micro-displays were coming from Russia. In total, between in or about May 2022 and in or about August 2023, MARCHENKO’s shell companies funneled more than $1.6 million to the U.S. in support of the procurement network’s efforts to smuggle the OLED micro-displays to Russia.

Outcome:

Defendant was found guilty and sentenced to three years in prison. In addition to the prison term he was sentenced to three years of supervised release

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Defendant's Experts:

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