The Department of Justice announced the prison sentence for a Russian national living in Hong Kong who pleaded guilty to smuggling and money laundering charges, which stemmed from a scheme that sent American-made, military-grade technology to Russia.
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According to the DOJ release, 52-year-old Maxim Marchenko and two unnamed Russian co-conspirators operated an international smuggling network that fraudulently procured dual-use, military-grade OLED micro-displays. This network supplied Russian entities with the microelectronics, which can be used in weapons systems, including night vision goggles, thermal optics and rifle scopes.
The network consisted of Marchenko’s shell companies in Hong Kong named Alice Components, Neway Technologies Limited and RG Solutions Limited. Marchenko and his accomplices deceived U.S. distributors by claiming that the shell companies would send the products to users in China, Hong Kong and other countries outside of Russia for medical research purposes and hunting rifles.
The shell companies also concealed the origin of the payments, which amounted to more than $1.6 million over about 15 months.
To hide the true destination of the OLED micro-displays, the conspirators used pass-through entities operated by Marchenko to handle the products. Marchenko then had them shipped to Russia via a freight forwarder and other channels.
Marchenko faced a maximum of 20 years in prison for the money laundering count and up to 10 years for the smuggling goods charge. However, his sentence includes three years in prison followed by three years of supervised release.
The case involved efforts by the Justice and Commerce Departments’ Task Force KleptoCapture and Disruptive Technology Strike Force, which were launched after Russia invaded Ukraine. The task and strike forces were created to enforce U.S. economic countermeasures, export restrictions and sanctions and to prevent hostile nation states and authoritarian regimes from acquiring critical technology.
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