Source: United States Department of Justice Criminal Division
Arthur Petrov Allegedly Participated in a Russia-Based Illicit Procurement Network That, Subsequent to Russia’s Invasion of Ukraine, Illegally Procured Large Quantities of Sensitive Microelectronics for a Russian Company That Supplies Manufacturers for the Russian Military
Arthur Petrov, 33, a dual Russian and German national, made his initial appearance in federal court today, following his extradition from the Republic of Cyprus for criminal offenses related to export control violations, smuggling, wire fraud and money laundering. Petrov allegedly participated in a scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. Petrov was arrested on Aug. 26, 2023, in the Republic of Cyprus at the request of the United States.
“Today’s extradition demonstrates the Justice Department’s enduring commitment to cutting Russia off from the western technologies that fuel President Putin’s war machine,” said Deputy Attorney General Lisa Monaco. “Together with global partners, the Department’s Disruptive Technology Strike Force and Task Force KleptoCapture will vigorously investigate and prosecute efforts to evade the global sanctions and export controls imposed to counter Russia’s brutal war in Ukraine. The defendant’s extradition is a vital step towards holding Russia accountable, and I am grateful to our Cypriot partners for their assistance in this matter.”
“Our charges allege that, after Russia’s full-scale invasion of Ukraine, the defendant and his co-conspirators formed an elaborate tech-trafficking syndicate to supply microelectronics to Russia’s military-industrial complex,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Together with our international law enforcement partners, the Justice Department will now hold Petrov to account in a U.S. courtroom and continue dismantling criminal networks that threaten our collective security.”
“As demonstrated by today’s extradition, just because you’re located overseas doesn’t mean we won’t find you,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Commerce Department’s Bureau of Industry and Security (BIS). “If you procure sensitive U.S. microelectronics with military applications for Russia, you risk the very real threat of facing justice in a U.S. courtroom.”
“Arthur Petrov is alleged to have conspired to smuggle shipments from U.S. distributors of microelectronics with military applications through intermediary countries to Russia as part of an illicit Russian-based procurement network,” said U.S. Attorney Damian Williams for the Southern District of New York. “As alleged, he concealed the ultimate destination of these sensitive materials, and he knew that these transactions and shipments were in violation of U.S. export controls relating to Russia. Thanks to the efforts of our law enforcement partners here and abroad, Petrov is now in U.S. custody and will face justice in a U.S. courtroom. This case demonstrates that we will work tirelessly with our law enforcement partners to protect national security and disrupt and prosecute the illicit supply of U.S.-sourced military technology to Russia.”
“The extradition of Arthur Petrov and the allegations laid out in a criminal complaint send a strong message about the resolve and commitment of the FBI and its partners to stop the illegal transfer of sensitive, military-use technology,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “In the hands of hostile nations, such technology presents a significant threat to U.S. national security. Today’s actions demonstrate the power and reach of law enforcement partnerships to dismantle even the most elaborate schemes while keeping Americans safe in the process.”
According to court documents, Petrov worked for LLC Electrocom VPK (Electrocom), a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. Petrov and two co-conspirators (CC-1 and CC-2), who are Russian nationals also working for Electrocom, operated an illicit procurement network in Russia and elsewhere overseas. They fraudulently procured from U.S. distributors large quantities of microelectronics subject to U.S. export controls on behalf of Electrocom. To carry out the scheme, Petrov, CC-1, and CC-2 used shell companies and other deceptive means to conceal that the electronics components were destined for Russia. The technology that Petrov and his co-conspirators have procured in contravention of export controls during the course of the conspiracy have significant military applications and include various types of electronics components of the sort that have been recovered in Russian military hardware on the battlefield in Ukraine, such as Russian guided missiles, drones and electronic warfare and communications devices.
To perpetrate the scheme, Petrov first acquired the controlled microelectronics from U.S.-based electronics exporters using a Cyprus-based shell company, Astrafteros Technokosmos LTD (Astrafteros), which he operates. Petrov procured these sensitive electronics components by falsely representing to the U.S. exporters that Astrafteros was purchasing the items for fire security systems, among other commercial uses, and that the ultimate end-users and destinations of the electronics are companies in Cyprus or other third countries — when in fact, the components are destined for Electrocom in Russia, which supplies manufacturers for the Russian military. The microelectronics that Petrov has procured as part of the conspiracy include, among other things, microcontrollers and integrated circuits that are on the Commerce Control List maintained by the Commerce Department and cannot lawfully be exported or reexported to Russia without a license from the Commerce Department. Invoices provided to Petrov by the U.S. distributors expressly noted that these microcontrollers and integrated circuits are subject to U.S. export controls.
To evade these controls, Petrov, CC-1, and CC-2 worked together to transship the controlled items procured by Petrov using pass-through entities operated by CC-1 and CC-2 in third countries. CC-1 and CC-2 then caused the items to be shipped, sometimes through yet another country, to the ultimate destination: Electrocom in Saint Petersburg, Russia. At all times, Petrov, CC-1, and CC-2 concealed from the U.S. distributors that they were procuring the controlled electronics components on behalf of Electrocom and that the items were destined for Russia. During the course of the conspiracy, Petrov, CC-1, and CC-2 procured from U.S. distributors and shipped to Russia more than $225,000 worth of controlled electronics components with military applications.
On Aug. 26, 2023, Petrov was arrested and detained by the Cypriot authorities at the request of the United States. The United States thereafter submitted a formal extradition request. On July 18, after extradition proceedings in the Cypriot courts concluded with extradition being approved, the Cypriot Minister of Justice and Public Order issued the extradition order.
Petrov is charged with one count of conspiracy to defraud the United States, which carries a maximum penalty of five years in prison; one count of conspiracy to violate the Export Control Reform Act (ECRA), which carries a maximum penalty of 20 years in prison; three counts of violating the ECRA, each of which carries a maximum penalty of 20 years in prison; one count of conspiracy to smuggle goods from the United States, which carries a maximum penalty of five years in prison; three counts of smuggling goods from the United States, which each carry a maximum penalty of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorney Kevin Sullivan for the Southern District of New York and Trial Attorney Maria Fedor of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.