U.S.-Russian citizen pleads guilty in multimillion dollar military scheme

Story highlights

  • Alexander Fishenko pleads guilty to illegal exporting, money laundering and acting as an agent of the Russian government
  • Fishenko's company shipped about $50 million worth of microelectronics to Russia
  • Clients included Russian military, government and intelligence agencies

(CNN)The Russian military was willing to pay well for cutting-edge microelectronics. Alexander Fishenko was willing to sell it. But it proved a costly deal for him in the end.

Fishenko, a dual citizen of the United States and Russia, pleaded guilty on Wednesday in Brooklyn federal court to host of charges -- including acting as an agent of the Russian government within the United States without prior notification, according to court documents.
    "Fishenko lined his pockets at the expense of our national security," wrote Kelly T. Currie, acting U.S. attorney for the Eastern District of New York, in a news release.
    "This prosecution highlights the importance of vigorously enforcing United States export control laws."
    Fishenko, 49, "led a conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to Russia," the news release said.
    She wrote that Fishenko evaded the government licensing system set up to control such exports.
    Those microelectronics sent to Russia included microprocessors, static RAM chips and analog-to-digital converters regularly used to in radar and surveillance systems, missile guidance systems and more, the release said.
    His guilty plea also involved charges of money laundering and obstruction of justice.

    How the deal worked

    Fishenko was the CEO of Arc Electronics, based in Houston, Texas. It was founded in 1998.
    Arc Electronics began to purchase "cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export these high-tech goods to Russia," according to the news release.
    Those deals were intentionally executed without the proper licensure, which is illegal under U.S. trade laws. From 2002 to the present, Arc Electronics has shipped approximately $50 million in these electronics to Russia, the release said.
    Fishenko also helped to run a Moscow-based procurement firm. That company, called Apex, was a certified supplier of military equipment to the Russian government.
    To appear nondescript, Fishenko and others would create fake information about the way the products were used and concealed the nature of both businesses.
    For example, according to court documents, Arc "claimed to be a traffic light manufacturer on its website."
      Fishenko faces up to 20 years in prison for each violation of the International Emergency Economic Powers Act and the Arms Export Control Act.
      On top of that, he faces up to 20 years in prison for money laundering, up to 20 years for obstruction of justice and an additional 10 years for acting as a Russian agent.