In coordination with the U.S. Department of Justice and the Federal Bureau of Investigation (FBI), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated “Russian national and procurement agent Yury Orekhov and two of his companies – Nord-Deutsche Industrieanlagenbau GmbH (NDA GmbH) and Opus Energy Trading LLC,” the Treasury Department said in a statement.
Orekhov and his companies were designated pursuant to Executive Order 14024 “for operating or having operated in the technology sector of the Russian Federation economy,” read the statement.
At the same time, the U.S. Department of Justice (DOJ) announced that a federal court in Brooklyn, New York, unsealed a 12-count indictment charging “five Russian nationals – Yury Orekhov, Artem Uss, Svetlana Kuzurgasheva, also known as Lana Neumann, Timofey Telegin and Sergey Tulyakov – with various charges related to a global procurement, smuggling and money laundering network.”
Two Venezuelan nationals, Juan Fernando Serrano Ponce, and Juan Carlos Soto, were also charged. They allegedly “brokered illicit oil deals for Petroleos de Venezuela S.A. (PDVSA), the Venezuelan state-owned oil company, as part of the scheme.”
“Today we announce the dismantling of a sophisticated network consisting of at least five Russian nationals and two Venezuelan nationals, each of whom are directly linked to corrupt state-owned enterprises, who knowingly sought to conceal the theft of U.S. military technology and profit off black market oil,” FBI Assistant Director-in-Charge Michael J. Driscoll said.
He went on to say that the network schemed to procure sophisticated military technology in direct support of a floundering Russian Federation military industrial complex.
The DOJ claims that Orekhov – who was arrested in Germany on October 17, on a U.S. request – has served as co-owner, Chief Executive Officer and Managing Director of Hamburg-based NDA GmbH, while Artem Uss, the son of the governor of Russia’s Krasnoyarsk region, has been the company’s majority owner. Svetlana Kuzurgasheva worked for NDA GmbH under Orekhov and was the Chief Executive Officer of one of the scheme’s shell businesses.
“Using NDA GmbH as a front company, Orekhov and Kuzurgasheva allegedly sourced and purchased sensitive military and dual-use technologies from U.S. manufacturers, including advanced semiconductors and microprocessors used in fighter aircraft, missile systems, smart munitions, radar, satellites and other space-based military applications,” the DOJ’s statement read.
Those components were sent to Russian end customers, including sanctioned Telegin and Tulyakov-controlled enterprises that supplied Russia’s defense industry, such as Radioavtomatika, Radioexport, and Abtronics.
Consequently, some of the same electronic components purchased through the illegal operation have been discovered in Russian weapons platforms confiscated on the Ukrainian battlefield.
A scheme to shield the operation was very complex, involving illegal oil resale, supertankers, large money transactions, forged documents.
According to the DOJ, Orekhov traveled to the U.S. in 2019 to obtain parts for the Russian-made Sukhoi fighter aircraft and the American-made F-22 Raptor stealth fighter aircraft.
Together with Uss, he allegedly used NDA GmbH as a front to “smuggle hundreds of millions of barrels of oil from Venezuela to Russian and Chinese purchasers, including a Russian aluminum company controlled by a sanctioned oligarch and the world’s largest oil refining, gas and petrochemical conglomerate based in Beijing, People’s Republic of China.”
At the same time, Venezuelans Ponce and Soto allegedly negotiated multimillion-dollar deals between PDVSA and NDA GmbH, which were channeled via a complicated network of shell companies and bank accounts to conceal the transactions.
The scam reportedly included faked shipping paperwork and supertankers that turned off their GPS navigation systems to conceal the Venezuelan provenance of their oil.
The DOJ also said that payment for NDA GmbH’s illegal actions was frequently made in U.S. dollars via U.S. financial institutions and correspondent bank accounts.
“To facilitate these transactions, Orekhov and his co-conspirators used fictitious companies, falsified ‘Know Your Customer’ documentation and bank accounts in high-risk jurisdictions, causing U.S. banks to process tens of millions of dollars in violation of U.S. sanctions and other criminal laws,” the DOJ’s statement read.
It added that the scheme also used bulk cash drops with couriers in Russia and Latin America, as well as cryptocurrency transfers worth millions of dollars, to carry out these transactions and launder the profits.
However, webs of shell companies, cryptocurrencies, and an international network of fraudsters failed to protect Orekhov and his associates from arrest by U.S. law enforcement, according to Task Force KleptoCapture Director Andrew Adams.
“Stamping out evasion of export controls on military technology is among the Task Force’s highest priorities, and today’s arrests reflects the power of those controls when enforced by a dedicated team of expert agents and devoted foreign partners,” he said.
If convicted, the defendants risk up to 30 years in jail, according to the DOJ.
