US Indictment Reveals Investigation of Business Partners for Exporting Aerospace Tech to Russia

DOJ charged Sanjay Kaushik with conspiring to ship export-controlled aviation parts to end-users in Russia in violation of the Export Control Reform Act, including by trying to illegally export a navigation and flight control system from Oregon to Russia through India. He also made false statements to BIS about the export, DOJ said.

The U.S. said Kaushik began working with others as early as March 2023 to illegally buy aerospace parts and technology from the U.S. for entities in Russia. Kaushik bought the goods “under the false pretense” that they would be used only in India, including by telling the U.S. government that his Indian company was the “end purchaser” and that certain parts would be used in a civilian helicopter.

Those parts included an “Attitude Heading Reference System” (AHRS) -- a device that provides navigation and flight control data for aircraft -- which Kaushik bought from an Oregon supplier. The U.S. detained the AHRS before it left the country, DOJ said, adding that Kaushik planned to route it through India to a customer in Russia.

An affidavit filed last month by a BIS export enforcement agent names Kaushik's company as Arezo Aviation Services Limited. The affidavit also said Kaushik worked with Austrian citizen Markus Kaltenegger and Kaltenegger's Austrian company Yoracraft GMBH, although DOJ didn't name them in its indictment.

The BIS Office of Export Enforcement began investigating Kaushik and Kaltenegger last year after they tried to buy from the unnamed Oregon company a $72,000 "LCR-100 Attitude and Heading Reference System," according to the affidavit, which is an item classified under Export Control Classification Number 7A103 because of its uses in missile systems.

Kaushik told the Oregon company that his business planned to ship the item to India, and the owner of the Oregon company asked him to first secure a BIS export license. The Oregon company also asked him to "fill out and provide a Russia Sanctions certification document declaring [his] understanding of U.S. Export Administration Regulations and license requirements for commercial aircraft parts for Russia," according to the affidavit. The document, signed by Kaushik, also said Kaushik would “not directly or indirectly export, reexport, or transfer (in country) items subject to the EAR, to Russia, Ukraine, or Belarus in violation of the EAR or other applicable laws.”

Kaushik then submitted an export license application to BIS, the affidavit said, which was approved. But BIS "subsequently developed derogatory information" about Arezo Aviation Services after finding public trade data that showed the company in recent months had sent 53 shipments, including aircraft parts, worth more than $6 million to Moscow-based PDS Avia LLC.

Those shipments may have included other U.S.-origin parts, the affidavit said. BIS said export records show Arezo Aviation Services bought a “shut off valve” from the U.S. in October 2023, and commercial trade data indicated that the company exported a similar valve” to PDS Avia.

The BIS agent then said the agency carried out a "post-shipment verification" with Kaushik in India on Jan. 17, where Kaushik acknowledged to a BIS export control officer that he was "aware" of U.S. export control laws and worked with Kaltenegger to buy the aircraft parts. Kaushik also told the BIS officer that Kaltenegger was the one who bought the aircraft parts from the Oregon company and signed the Russia sanctions certification, end-use certificate and the export compliance statement on Kaushik's behalf.

This was a "lie," according to the affidavit. It said BIS obtained a copy of documents and emails that showed the certifications and export control documents were sent to Kaushik's email, who then sent them back signed.

Kaushik also told BIS that his company bought the AHRS for Zaco Aviation, a company based in India, according to the affidavit, acknowledging to the BIS officer that this was "different than the information provided in the end-use documentation."

That end-use documentation said Kaushik planned to use the AHRS for a civilian helicopter with tail number VT-IKR. When asked about this, Kaushik told the BIS officer that Kaltenegger "randomly chose the tail number provided in the end-use documentation from an open-source aircraft registry."

After the post-shipment verification, BIS revoked Kaushik's export license, the BIS agent wrote in the affidavit. The agency also obtained emails from Kaltenegger that showed he and Kaushik planned to ship the AHRS to Moscow-based PDS Avia. BIS also said it found more emails from Kaltenegger "indicating the sale" of other U.S.-origin aircraft parts to Russia.

BIS eventually received a warrant to search the iCloud accounts of Kaushik and Kaltenegger, which showed "additional evidence of a conspiracy" to buy U.S. aviation parts for Russian buyers, the affidavit said. Kaushik's account had contracts, payments and other documents showing that both Arezo Aviation Services and Yoracraft had bought export-controlled items for Russia-based Aircompany North-West LLC, a company added to the Entity List in December 2023, BIS said.

That included a shipment for a $291,000 “PRSOV1,” which BIS said is an acronym in the aviation industry for “Pressure Regulating Shut- Off Valve.” The purchase date was listed as March 27, BIS said -- about three months after the Russian firm had been added to the Entity List.

Kaushik was arrested in Miami on Oct. 17 and faces a maximum 20-year prison sentence along with a $1 million fine for each count in the indictment.

A BIS spokesperson declined to comment about the status of the investigation on Kaltenegger. DOJ didn't immediately respond to a request for comment.