What to Know
A man in Russia was indicted on charges he smuggled $65M of electronics from the US to Russia with the help of his son's NJ business: DA
Alexander Brazhnikov Sr., 72, of Moscow, is facing various charges, including conspiracy to commit money laundering
Brazhnikov Sr. is at large; His son, Alexander Brazhnikov Jr. plead guilty to his role in the scheme in 2016
A man in Russia was indicted Wednesday on charges he smuggled $65 million worth of electronics from the United States to Russia, with the help of his son's New Jersey business, authorities say.
A multi-agency federal investigation resulted in Alexander Brazhnikov Sr., 72, of Moscow, being charged by indictment with one count each of conspiracy to commit money laundering, conspiracy to smuggle goods from the United States and conspiracy to violate the International Emergency Economic Powers Act (IEEPA), the US Attorney’s Office of New Jersey announced.
According to officials, Brazhnikov Sr. is at large.
Court documents say that Brazhnikov Sr. was the owner, chief executive officer and principal operator of ABN Universal, a privately held Russian microelectronics import/export company in Moscow, while his son, Alexander Brazhnikov Jr., 39, of Mountainside, owned and operated four New Jersey-based microelectronics export companies in Carteret, Mountainside, Union, and Manalapan.
According to court documents, father and son participated in a sophisticated network that secretly acquired large quantities of electronic components from United States manufacturers and vendors and exported those parts to Russia on behalf of Russian business entities. According to officials, these business entities were authorized to supply those parts to the Ministry of Defense of the Russian Federation, the Federal Security Service of the Russian Federation (FSB) and Russian entities involved in the design of nuclear warheads and other weapons.
The scheme allegedly consisted of Brazhnikov Sr., through his Moscow business, obtaining the initial requests for quotes for the U.S.-based electronics components from various Russian entities and, then, sending the requests directly to U.S.-based vendors electronically or to his son for implementation.
Prosecutors claim Brazhnikov Sr., Brazhnikov Jr., and others then used Brazhnikov Jr.’s New Jersey export companies to purchase the electronic components from the U.S.-based distributors and re-package them for shipment to Moscow.
In order to obscure the extent of the network’s procurement activities and avoid filing the necessary export forms, Brazhnikov Sr., Brazhnikov Jr., and others allegedly falsified the true recipients and value of the items they exported.
Prosecutors say that each shipment from the United States was sent to one of 12 false addresses or shell locations in Moscow established at Brazhnikov Sr.’s direction, re-directed to a central warehouse he controlled and then shipped to the end-users in Russia, including the Russian defense contracting firms.
The funds for the alleged transactions were obtained from various Russian purchasers and initially deposited into one of Brazhnikov Sr.’s primary accounts in Russia.
To further conceal the actual customers and the source of the funds, disbursements for purchases were then made through one or more foreign accounts held by shell corporations in the British Virgin Islands, Latvia, Marshall Islands, Panama, Ireland, England, United Arab Emirates, and Belize, and ultimately into one of Brazhnikov Jr.’s U.S.-based accounts, according to the US Attorney’s Office.
The money laundering conspiracy charge carries a maximum penalty of 20 years in prison and a $500,000 fine. The conspiracy to violate the IEEPA carries a maximum penalty of 20 years in prison. The charge of conspiracy to smuggle goods carries a potential penalty of five years in prison and a $250,000 fine.
Brazhnikov Jr. previously pleaded guilty to his role in the scheme and was sentenced June 30, 2016, to 70 months in prison.