The Two-Way
4:36 pm
Wed October 3, 2012

Texas Company Charged In Illegal Technology Transfers To Russia

Originally published on Wed October 3, 2012 5:22 pm

Federal prosecutors in Brooklyn say they have broken up a ring that allegedly exported sensitive electronic technology to Russia.

Eight people were arrested today in Houston, including Alexander Fishenko, an immigrant from Kazakhstan who built a multi-million dollar export firm called Arc Electrics.

The indictment names Fishenko as an unregistered agent of the Russian government who bought high-tech microchips and other electronic items from American suppliers, then re-sold them to a defense contracting company in Russia.

A Justice Department official told NPR that Fishenko duped the American suppliers by telling them that the technology was intended for civilian uses, such as traffic lights.

"You can't think of anything more civilian than a traffic light," says Stephen Blank, an expert on Russia and research professor of national security affairs at the U.S. Army War College, "but obviously the technology that can control the flow of traffic can be used in missile guidance and radar systems."

The micro-electronics that Fishenko dealt in are known as "dual-use" technology because they can be used in both civilian and military systems.

The chips and other devices are readily available to civilian businesses in the U.S., but exporters need special licenses and clearance if they want to ship the technology to other countries.

The indictment says Fishenko exported some $50 million worth of micro-electronic parts to Russia under false pretenses.

It says the parts went to a Russian company that does business with Russian military and security agencies.

Fishenko and his co-defendants are charged with evading export controls and money laundering.

The indictment names three other defendants who are currently in Russia.

Blank says illegal efforts to obtain sensitive U.S. technology have "gotten steadily worse in the last 12 years. It is an essential part of [Russian President Vladimir] Putin's program to upgrade the use of intelligence agents."

Fishenko faces up to 12 years in prison if he's convicted.

The case comes amid worsening relations between the United States and Russia.

On Monday, Russia expelled the U.S. Agency for International Development, saying it funded efforts to affect Russia's political processes, including elections.

USAID supported non-governmental organizations that worked to expose vote-rigging, but the bulk of its aid went to programs ranging from disaster prevention to reproductive health.

The Russian government is also pulling the broadcast license of Radio Liberty, under a new law that prohibits foreigners from owning more than 48 percent of a broadcast company.

Radio Liberty, which has been broadcasting in Russia for two decades, says it will still produce programming for Russians on its Internet Radio Service.

(Corey Flintoff is NPR's Moscow correspondent.)

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