Russian Agent Sent Advanced US Military Tech Home: Feds

Oct. 3, 2012 — -- A Russian agent has been arrested for allegedly using a Texas-based front company to send sensitive American technology to the Russian military and intelligence agencies, the Department of Justice said today.

According to federal officials, Alexander Fishenko was at the center of a Russian "military procurement ring" that for years employed complex schemes to trick U.S. customs agents into believing his company was shipping harmless goods -- like traffic light parts -- to Russia, rather than advanced microelectronics that could be used in military applications including radar and surveillance systems, weapons guidance systems or detonation triggers. The ring also allegedly provided microchips to a specialized electronics laboratory run by the FSB, Russia's powerful intelligence agency and successor to the KGB.

In addition to Fishenko, 10 other suspects working in the U.S. and in Russia were indicted for their alleged role in the scheme. The ploy was apparently so significant that U.S. officials said in court documents the front company's fluctuating revenue bore a "striking similarity" to fluctuations in Russian defense spending over the last several years.

"As alleged in the indictment, the defendants spun an elaborate web of lies to evade the laws that protect our national security," U.S. Attorney Loretta Lynch said. "But U.S. law enforcement detected, disrupted and dismantled the defendants' work."

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Documents provided by the Department of Justice allege that Fishenko was the link between the Houston-based Arc Electronics, Inc., which he founded in 1998, and Apex Systems, L.L.C., of which he is a part owner, based in Moscow. To get the microelectronics from the U.S. and into the hands of Russian spies or military officers, Arc allegedly used other corporations as intermediaries and provided false information about what the parts were and where they were going. At one point the firm went as far as claiming it was a "traffic light manufacturer," even though the company doesn't manufacture anything, the DOJ said in a release.

In another instance, a suspect in the ring ordered a Russia-based company to make sure documents showed that maritime parts were for a fishing boat rather than for "anti-submarine ones." "Then we'll be able to start working," the suspect said, according to court documents.

In late 2011, the DOJ said several of the defendants tried to cover their tracks by destroying documents and deleting any references to the Russian military in emails.

"In this day and time, the ability of foreign countries to illegally acquire sensitive and sophisticated U.S. technology poses a significant threat to both the economic and national security of our nation," Houston FBI Special Agent in Charge Stephen Morris said. "While some countries may leverage our technology for financial gain, many countries hostile to the United States will seek to improve their defense capabilities and to modernize their weapons systems at the expense of U.S. taxpayers."

Representatives for the Russian government in the U.S. did not immediately return a request for comment on this report.

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