New York Company Received Over $250,000 from Sanctioned Russian Entity to Purchase and Export Electronic Components
Nikolay Grigorev, 36, of Brooklyn, pleaded guilty today to conspiring to defraud the United States for his role in an illicit export control scheme to ship electronic components from the United States to companies affiliated with the Russian military. Co-defendants Nikita Arkhipov and Artem Oloviannikov remain at large.
“In pleading guilty today, the defendant admitted he conspired to smuggle over $250,000 worth of sensitive American drone technology to Russian companies fueling Putin’s unlawful war against Ukraine,” said Deputy Attorney General Lisa Monaco. “Swift action by agents and prosecutors unraveled a web of fake orders and wire transfers to prevent over 11,500 electronic components from making their way to the Russian war machine. The Justice Department will continue to hold accountable those who defy our sanctions and export controls to support Russia’s unprovoked and unjustified aggression in Ukraine – whether they’re based in New York City or overseas.”
“The FBI is relentless in its efforts to prevent sensitive, dual-use technology from being acquired by adversaries,” said FBI Deputy Director Paul Abbate. “The technologies in this case supported Russia’s war effort and poses a significant threat to the United States and its allies. The FBI continues to tirelessly pursue any illegal transfers that threaten national security and hold accountable those who violate the law.”
“When I visited Ukraine last November, I saw firsthand the death and destruction that such drones and other Russian weapons of war have caused, and heard from our counterparts about the importance of stopping the illicit flow of technology to support the Russian war machine,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s plea reinforces our commitment to hold accountable those who violate our laws and our determination to undermine the Russian government’s unjustified campaign of aggression against the Ukrainian people.”
“Grigorev admitted today that he conspired to supply Russia with U.S.-sourced, dual-use technologies, knowing full well that his actions violated export controls and sanctions designed to stop those items from being sent to Russia and used in the production of drones like those found on the battlefields in Ukraine,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s guilty plea reaffirms that my office will pursue anyone who violates our export controls and threatens our national security.”
“Today’s guilty plea is just the latest example of our unyielding efforts to reduce the flow of electronic components to the Russian military,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod. “Criminal convictions await those who willfully circumvent U.S. export controls and aid the manufacture of Russian drones used against Ukraine.”
As alleged in the indictment, Grigorev utilized a Brooklyn-based corporate entity, Quality Life Cue LLC (QLC), to facilitate the scheme. QLC was registered and controlled by Grigorev and Oloviannikov, with Arkhipov utilizing a QLC email account from Russia. Through QLC, the defendants procured dual-use electronic components for entities in Russia involved in the development and manufacture of drones for the Russian war effort in Ukraine. The most notable of these entities was SMT-iLogic, a Russia-based technology company that was sanctioned in May 2023 for its involvement in the supply chain for producing Russian military UAVs used in Russia’s war against Ukraine.
Between Oct. 22, 2021, and Feb. 22, 2022, QLC accounts controlled by Grigorev received wire transactions from SMT-iLogic totaling approximately $272,830. These funds were used almost entirely to make payments to a Brooklyn-based electronics distributor (the “Brooklyn Company”) or to pay Grigorev’s credit cards, which he used to buy goods from the Brooklyn Company. In email and chat communications, the defendants explicitly discussed their efforts to circumvent U.S. export restrictions, including through the use of front companies in third countries, such as Kazakhstan, and they also forwarded invoices listing SMT-iLogic as the recipient of semiconductors and other electronic components purchased from the Brooklyn Company. In addition, in December 2022, in response to negative press coverage of SMT-iLogic, Grigorev forwarded a news article to his co-defendants and stated, “they are already writing about your (sic) guys in articles about how Russia is getting American components for drones.” In June 2023, a court-authorized search warrant of Grigorev’s residence in Brooklyn resulted in the successful seizure of over 11,500 electronic components that had been purchased from the Brooklyn Company and were awaiting unlawful export to Russia.
As a result of today’s guilty plea, Grigorev faces a maximum penalty of five years in prison. A sentencing hearing has not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S.
Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.
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