Source: United States Department of Justice News
A five-count indictment was unsealed today in federal court in Brooklyn, New York charging Ilya Balakaev with various charges related to smuggling devices commonly used in counterintelligence operations out of the U.S. to Russia for the benefit of the Federal Security Service of the Russian Federation (FSB) and Democratic People’s Republic of Korea (“DPRK” or “North Korea”).
As alleged, between 2017 and the present, the defendant Ilya Balakaev entered into multiple contracts through his company Radiotester LLC with the FSB—the principal intelligence and security agency of the Russian government—to repair spectrum analyzers and signal generators. The devices that the defendant was tasked to repair were frequently used as part of counterintelligence operations to sweep for surveillance bugs and to transmit covert communications. Because the devices were not readily available in Russia, the defendant created a network of individuals in the U.S. to assist him in purchasing the equipment in the U.S. which he used to repair the FSB devices, in violation of U.S. sanctions.
The defendant worked closely with Russian government officials from FSB Center 8’s Military Unit 43753, the agency responsible for Russia’s communication security and cryptology. In furtherance of his scheme, the defendant entered into at least 10 contracts with FSB Military Unit 43753, purchased approximately 43 devices in the U.S., and traveled to the U.S. approximately 14 times in the span of approximately four years.
In addition to his scheme to evade Russian sanctions, the defendant also provided U.S. technology to a North Korean government official, in violation of U.S. sanctions against North Korea. The defendant contracted with the First Secretary of the North Korean Embassy to the Russian Federation, based in Moscow, to obtain hazardous gas detectors and software from the U.S. for the benefit of the North Korean government.
Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Special Agent in Charge Jonathan Carson., US Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office, Ivan Arvelo, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), Francis J. Russo, Director of Field Operations, U.S. Customs and Border Protection, New York Field Office (CBP) and Andrew Adams, Director, Task Force KleptoCapture, announced the charges.
“As alleged, the defendant violated U.S. law by procuring, smuggling, and repairing counterintelligence operation devices for the benefit of Russia’s secret police and the North Korean government,” stated United States Attorney Peace. “Today’s indictment demonstrates our Office’s commitment to vigorously prosecute those who evade sanctions for a profit, both for their wallet and for Russia as they continue their aggression against Ukraine.”
“The defendant allegedly operated schemes to smuggle software and devices from the United States and provide them to hostile foreign government services in violation of U.S. sanctions. FBI New York and our partners will continue to protect the national security of the United States by disrupting the procurement of sanctioned equipment and technology,” stated Assistant Director-in-Charge Driscoll.
“To prevent the continuance of violations identified in the indictment, the defendant is now subject to a Commerce temporary denial order, which restricts his ability to access U.S. technologies,” said Jonathan Carson, Special Agent-in-Charge of the New York Field Office, Office of Export Enforcement. “These coordinated actions highlight our vigilance and ability to leverage our unique combination of criminal and administrative enforcement authorities to address evasions of U.S. export controls.”
“U.S. Customs and Border Protection is uniquely positioned to enhance the safety of our country. We will continue to work with our partners to be exceptionally focused on addressing the threats posed by counterintelligence activities, terrorism, transnational criminal organizations, and others who wish to do us harm,” said Francis J. Russo, Director New York Field Office. “CBP’s combined efforts with our law enforcement partners in this case serve as a reminder that we will continue to combat and prosecute modern transnational criminal organizations.”
“From the outset of the Task Force, the Department has prioritized the investigation and prosecution of case involving criminal violations of our export controls pertaining to Russia. As today’s case demonstrates, facilitators like this defendant provide smuggling services for all manner of dangerous actors and regimes – it is not possible to disentangle the FSB’s smuggling networks from those servicing other sanctioned state actors, and we must support and applaud comprehensive charges like those set forth in the Eastern District’s indictment,” stated Task Force KleptoCapture Director Adams.
If convicted, the defendant faces a maximum of 75 years’ imprisonment. The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorney Sara K. Winik is in charge of the prosecution, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
The Defendant:
ILYA BALAKAEV
AGE: 47
MOSCOW, RUSSIA
E.D.N.Y. Docket No. 23-CR-79