How Russia Uses American Businesses to Steal U.S. Military Technology

Microelectronics used in missiles and radar are tightly regulated so they don’t slip into the wrong hands. The Kremlin’s reach is long though.

Russia doesn’t only use spies to steal secrets. Sometimes those doing its dirty work are ordinary American businessmen.

The sentencing of two women in Brooklyn federal court last week brought an end to a long criminal drama in which they helped their boss Alexander Fishenko smuggle military-grade technology to Russia. Prosecutors had even noted a “striking similarity between fluctuations in [his company’s] gross revenues and the Russian Federation’s defense spending over the last several years,” according to court documents.

Fishenko owned Arc Electronics, a Houston, Texas, company that falsely claimed to manufacture traffic lights while it really exported high-tech products like microelectronics, according to a criminal complaint. Fishenko also co-owned a Moscow-based business focused on getting microelectronics for Russian military and intelligence agencies. Fishenko used these companies to act as an unregistered Russian agent, feds alleged. Fishenko also violated regulations on exporting controlled microelectronics to foreign countries who might use them to advance their own military capabilities.

The types of technology Arc sent to Russia could have been used for military radar and surveillance systems, and even for missile guidance systems, prosecutors said. Over 10 years, the company shipped more than $50 million worth of these sensitive technologies straight to suppliers for Russian intelligence.

“Russia does not domestically produce many of these sophisticated goods,” prosecutors noted after Fishenko’s sentencing.

Though the company was based in Texas, the case was tried in a Brooklyn court because the company used New York’s John F. Kennedy International Airport to carry out the scheme.

“Communications intercepted during the investigation revealed that a large portion of the technology exported by defendants was destined for Russian military agencies,” prosecutors wrote in court filings. “Specific correspondence recovered during the course of the investigation revealed that the Federal Security Service, Russia’s domestic intelligence agency, as well as Russian military entities, were the end users of some of the microelectronics exported by Arc.”

Source: The Daily Beast

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