Five Russian nationals and two Venezuelan oil brokers allegedly laundered millions of barrels of Venezuelan crude to Beijing in a scheme to aid the Russian military, the Department of Justice said Wednesday.
The Department of Justice (DOJ) indicted several individuals and corporate entities for “alleged participation in a global sanction evasion and money laundering scheme” to furnish Russia with “powerful” civil-military technologies, according to a press release. The DOJ charged the indicted persons with smuggling millions of barrels of sanctioned Venezuelan oil to generate illicit revenue for Russian oligarchs as well as stealing sensitive U.S. military technology for Russian military users.
Their activities represented a “global [scheme] to violate U.S. export and sanctions laws” and an attempt “to reexport a machine system with potential application in nuclear proliferation and defense programs to Russia,” Attorney General Merrick Garland said in a statement.
“Our investigators and prosecutors will be relentless in their efforts to identify, locate, and bring to justice those whose illegal acts undermine the rule of law and enable the Russian regime to continue its unprovoked invasion of Ukraine,” he added.
Yury Orekhov, a Russian national, used an industrial trading company based in Germany, where he served as CEO and in which he owned a partial stake, as a shell company to conceal the funneling of hundreds of millions of barrels of Venezuelan oil to Russian and Chinese customers, including the world’s largest oil and gas conglomerate based in Beijing.
The oil smuggling was conducted on behalf of an unnamed Russian oligarch, the DOJ alleged.
Orekhov and his compatriots used the front company to source and purchase sensitive equipment from U.S. manufacturers, the DOJ said. The products, which included advanced semiconductors and microprocessors, have both civilian and military applications including use in “fighter aircraft, missile systems, smart munitions, radar, satellites and other space-based military applications.”
The pilfered technology has known applications in Russian weapons platforms or has been discovered in the aftermath of battles in Ukraine, the indictment alleged.
Orekhov and Artem Uss, the firm’s second owner, then shipped the equipment to Russian military users as well as companies sanctioned for their role in supporting the Russian armed forces.
U.S. Attorney for the Eastern District of New York Breon Peace called the defendants “criminal enablers” for oligarchs.
“Their efforts undermined security, economic stability and rule of law around the world,” Peace added.
Authorities in Germany and Italy arrested Orekhov and Uss, respectively, at the behest of the U.S. on Oct. 17 and will extradite the two, according to the press release.
The DOJ charged the defendants with conspiracy to defraud the U.S., along with additional charges specific to each of the seven individuals indicted in the scheme.
The agency unveiled the indictment as part of Task Force KleptoCapture, an interagency program that doubles down on sanctions enforcement against individuals suspected of aiding the Russian invasion of Ukraine.
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