European Nationals and Entities Indicted on Charges of Violating U.S. Laws for Their Attempt to Export a Dual-Use High-Precision Jig Grinder to Russia | USAO-CT
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- October 19, 2022
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A superseding indictment charging individuals and companies in Europe with violating United States export laws and regulations by attempting to smuggle a dual-use export-controlled item to Russia was unsealed yesterday in the District of Connecticut.
U.S. Attorney Vanessa Roberts Avery; Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division; Andrew Adams, Director of Task Force KleptoCapture; Special Agent in Charge Matthew B. Millhollin 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 David Sundberg of the FBI New Haven Division made the announcement.
The indictment alleges that, beginning in 2018, Eriks Mamonovs, 33, and Vadims Ananics, 46, both citizens of Latvia who operated CNC Weld, a Latvia-based corporation, conspired with Stanislav Romanyuk, 37, a citizen of Ukraine and resident of Estonia who operated Estonia-based BY Trade OU, and others, including Janis Uzbalis, 46, of Latvia, and individuals in Russia and a Russia-based company, to violate U.S. export laws and regulations and smuggle a jig grinder that was 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.
Ananics, Mamonovs and Uzbalis were arrested yesterday in Riga, Latvia. Romanyuk was arrested in Tallinn, Estonia, on June 13. They are currently detained and the United States is seeking their extradition.
“The indictment alleges that these defendants attempted to smuggle a high-precision export-controlled item to Russia where it could have been used in nuclear proliferation and Russian defense programs,” said U.S. Attorney Vanessa Roberts Avery. “The danger created by such conduct is profound. I thank HSI, the Department of Commerce and the FBI, and our partners in Latvia and Estonia, who thwarted this alleged scheme and are working to bring these defendants to justice in a U.S. court of law.”
“The power and precision of American technology must not be put to use by the Kremlin’s war machine,” said Andrew Adams, Director of Task Force KleptoCapture. “Enforcement against efforts to illegally export and reexport controlled U.S. technology is critical in ensuring that superior American technology isn’t exploited by Russia in this unjust war. The arrests in Latvia demonstrate that smugglers and fraudsters will be apprehended and prosecuted notwithstanding the sophistication of evasion networks operating far from U.S. shores.”
“These individuals are alleged to have conspired to export a piece of machinery that can be used for nefarious purposes, including in defense applications to build weapons of war,” said Matthew Millhollin, Special Agent in Charge of Homeland Security Investigations in New England. “HSI works hand-in-hand with our partners domestically and abroad to further our mission to prevent sensitive U.S. technology and commodities from reaching the shores of hostile countries. These arrests and the seizure of the jig grinder are the result of the tenacious investigative work of our special agents and partners and show what can be achieved through these partnerships.”
“This three-year investigation is a testament to the excellent cooperation between our domestic and international law enforcement partners,” said Special Agent in Charge Rashel D. Assouri, U.S. Department of Commerce’s Office of Export Enforcement, Boston Field Office. “The Office of Export Enforcement is unwavering in its aggressive pursuit to investigate illegal exports to Russia.”
“This indictment is the culmination of a great collaborative law enforcement investigation,” said David Sundberg, Special Agent in Charge of the FBI New Haven Division. “The alleged conspirators in this international export and money laundering scheme will now face justice in the very system they manipulated and violated for financial gain.”
The superseding indictment, which was returned by a federal grand jury in Hartford on July 7, 2022, charges Mamonovs, Ananics, Romanyuk, Uzbalis, and others, with conspiracy, an offense that carries a maximum term of imprisonment of five years; violation of the Export Control Reform Act, an offense that carries a maximum term of imprisonment of 20 years; smuggling goods from the United States, an offense that carries a maximum term of imprisonment of 10 years; and international money laundering conspiracy, an offense that carries a maximum term of imprisonment of 20 years. Mamonovs is also charged with making false statements to the U.S. Department of Commerce, an offense that carries a maximum term of imprisonment of five years.
The indictment also charges CNC Weld, BY Trade OU with conspiracy, violation of the Export Control Reform Act, smuggling goods from the United States, and international money laundering conspiracy.
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.
This 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.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Konstantin Lantsman of the District of Connecticut, and Trial Attorney Matthew Anzaldi of the Justice Department’s National Security Division. The Justice Department’s Office of International Affairs is providing valuable assistance.
The investigation was coordinated with the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls, and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all of the Department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.