DOJ, Commerce Strike Force Unveils First Enforcement Actions For Illegal Exports
DOJ this week unsealed indictments of six people for trying to illegally ship sensitive items from the U.S., including shipments of dual-use technologies and aircraft parts to Russia, isostatic graphite to Iran and trade secrets to China. The charges are the first enforcement actions brought by the Disruptive Technology Strike Force, a group launched by DOJ and the Commerce Department in February to investigate and prosecute criminal export violations (see 2302160019).
One complaint charges Nikolaos Bogonikolos of Greece with wire fraud conspiracy and smuggling after he allegedly shipped “highly regulated and sensitive” U.S.-origin military and dual-use technologies to Russia. Bogonikolos -- head of the Aratos Group, a collection of defense and technology companies in the Netherlands and Greece -- illegally smuggled “tactical battlefield equipment,” advanced electronics and “sophisticated testing equipment” used by militaries, such as for quantum cryptography and nuclear weapons testing, the DOJ said.
Bogonikolos said the items “were to be used by Aratos,” but they were actually “reshipped and sent” to Russian end-users, including nuclear and quantum research facilities. Many of the orders were made by Moscow-based Serniya Engineering and Sertal LLC, both of which are on Commerce’s Entity List and the Treasury Department's Specially Designated Nationals List.
DOJ also said Bogonikolos gave “false” end-use statements to U.S. companies, which wrongly said Aratos was the end user. The statements also said Aratos wouldn’t reexport the goods, and that they wouldn’t be used to develop weapons, DOJ said.
A second complaint charges Chinese national Xiangjiang Qiao with sanctions evasion, money laundering and bank fraud offenses after he allegedly used a sanctioned Chinese company to provide weapons materials to Iran. Qiao, an employee of China-based Sinotech Dalian Carbon and Graphite Manufacturing Corp., which is subject to U.S. sanctions, tried to export to Iran isostatic graphite, a material used in the nose tips of ballistic missiles, DOJ said.
Between at least March 2019 and September 2022, Qiao “participated in a scheme” to use Sinotech Dalian to send the graphite to Iran for the production of weapons, including “through transactions involving the U.S. financial system,” DOJ said. He also tried to hide Sinotech Dalian’s involvement in the transaction by creating a “bank account in the name of a front company” to receive two transfers from a U.S. bank for over $15,000, the agency said.
Another complaint charges former Apple employee Weibao Wang, formerly a California resident, with trying to steal Apple technology related to “autonomous systems.” Wang began working as a software engineer at Apple in 2016, DOJ said, and in 2017 began working as a staff engineer with the U.S.-based subsidiary of a Chinese company without telling Apple. Wang resigned from Apple four months later, and the U.S. technology company eventually found that Wang “accessed large amounts of sensitive proprietary and confidential information in the days leading up to his departure,” DOJ said.
Law enforcement searched Wang’s California home and found “large quantities of data taken from Apple,” DOJ said. Wang told agents he had no plans to travel, the agency said, but he boarded a flight from San Francisco to Guangzhou, China, later that night.
Another complaint charges Liming Li of California with stealing sensitive technologies from two of his former U.S.-based employers to build his own “competing business” in China. Law enforcement arrested Li at Ontario International Airport in May, DOJ said, alleging he stole thousands of files of sensitive technology used to manufacture nuclear submarines and military aircraft.
DOJ said Li and his wife established their own business, JSL Innovations, in their home, and tried to use his company-issued laptop to download files from the business “onto his personal external hard drive.” Company security searched Li’s laptop and found that it allegedly included “numerous documents showing Li’s efforts to participate in the [People’s Republic of China’s] Thousand Talents Program” and plans to “use JSL Innovations to provide services and technology” to Chinese businesses and government entities.
In March 2020, DOJ said Li entered into an agreement with a China-based manufacturing company to serve as its chief technology officer. Six months later, FBI agents searched Li’s home and “found numerous digital devices containing millions of files belonging to” his former companies, DOJ said.
The fifth indictment charges Russian nationals Oleg Sergeyevich Patsulya and Vasilii Sergeyevich Besedin with conspiracy to violate the Export Control Reform Act and conspiracy to commit international money laundering after they tried to illegally export aircraft parts to Russia. The two Florida residents “fielded requests” for parts directly from Russian airlines, including several already subject to Commerce export restrictions, and used intermediary companies and foreign bank accounts in other countries to hide the true end-users. Commerce’s Bureau of Industry and Security this week imposed a temporary denial order against both Patsulya and Besedin, blocking their ability to export goods subject to the Export Administration Regulations (see 2305160047).