Maxim Marchenko and two of his co-conspirators, both Russian nationals, are believed to have been running an illegal procurement network in Russia, Hong Kong, and other parts of the world, obtaining large quantities of dual-use, military grade microelectronics, specifically OLED microdisplays, from U.S. distributors on behalf of Russia-based end users, according to the U.S. Department of Justice (DOJ).
He allegedly ran various Hong Kong-based shell businesses, including Alice Components Co. Ltd., Neway Technologies Limited, and RG Solutions Limited that facilitated the procurement.
Marchenko has been charged in “connection with conspiring to defraud the U.S. and with smuggling, wire fraud, and money laundering offenses,” linked to his alleged participation in smuggling U.S. military technology, such as “rifle scopes, night-vision goggles, thermal optics, and weapon systems,” to Russia, the DOJ said.
He may face decades in prison if convicted.
Marchenko’s companies allegedly funneled more than US$1.6 million to the U.S. between May 2022 and August 2023 in support of the procurement network’s efforts to smuggle the OLED microdisplays to Russia.
“According to the complaint, Marchenko employed a web of shell companies as part of an overseas smuggling ring to ship dual-use U.S. technology with military applications to Russia in contravention of U.S. law,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division.
He emphasized that the action against Marchenko reaffirms the Department’s commitment to preserve American security and resist Russian aggression in Ukraine by vigorously enforcing export control regulations.
The statement also claimed that Marchenko and his co-conspirators obtained sensitive equipment by falsely representing to U.S. distributors that the shipments were being sent to end users in China, Hong Kong, and other countries outside of Russia for use in electron microscopes for medical research.
Consequently, because they did not know the true end users, U.S. distributors who were required to disclose the trade to U.S. agencies, submitted fraudulent declarations.
“We are laser-focused on rooting out the procurement networks fueling the Russian war machine,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod.
As he stressed, U.S. authorities will continue to detect and disrupt Russia’s use of front firms in the People’s Republic of China and abroad to avoid U.S. regulations.
The Justice Department’s Task Force KleptoCapture, which was formed to implement sanctions and other restrictions placed on Russia as a result of its continuing invasion of Ukraine, coordinated the probe into the Marchenko case.