Canadian National Sentenced to 40 Months in Prison for Multi Million Dollar Export Control Scheme

 

Defendant Exported Millions of Dollars of Electronics Used by Russia in Missiles and Drones

At the federal courthouse in Brooklyn, Nikolay Goltsev was sentenced by United States District Judge LaShann DeArcy Hall to 40 months’ imprisonment for conspiring to commit export control violations. Goltsev, a Canadian national, masterminded a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies.  The electronic components shipped by Goltsev were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.

Breon Peace, United States Attorney for the Eastern District of New York; Merrick B. Garland, United States Attorney General; Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division; William S. Walker, Special Agent in Charge, Homeland Security Investigations New York (HSI); James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Jonathan Carson,  Special Agent in Charge, U.S. Department of Commerce, Office of Export Enforcement,  New York Field Office (EEO), announced the sentencing.

“Simply put, Russia cannot effectively manufacture advanced weapons without U.S. technology.  This sentence goes a long way in preventing Russia’s access to U.S. electronics for use in the unlawful war against Ukraine,” stated United States Attorney Peace.  “My Office is committed to stopping Russia’s illicit acquisition of U.S. technology.”

Mr. Peace also thanked U.S. Customs and Border Protection and the Department of Justice’s Office of International Affairs for their valuable assistance with the investigation. 

“Nikolay Goltsev joins the growing list of defendants held accountable for unlawfully procuring and profiting from the sale of U.S. technology to further Russia’s brutal war in Ukraine,” stated Attorney General Garland.  “The Justice Department is sparing no effort to ensure that those who violate America’s export controls to feed Russia’s war machine answer for their crimes in American courtrooms.”

“Goltsev’s sentence sends a strong message that those who break our laws and contribute to Russia’s brutal war in Ukraine will be held accountable,” stated Assistant Attorney General Olsen of the Justice Department’s National Security Division. “The Department of Justice will vigorously pursue those who procure the component parts that make Russia’s war machine tick. This case demonstrates that these wrongdoers will be found and punished accordingly.”

“Nikolay Goltsev’s sentencing today sends a message to those seeking to bypass export control laws in support of the Kremlin’s inhumane attacks on Ukraine: HSI will do whatever it takes to prevent U.S. military technology from ending up on the Russian battlefield. HSI’s counter-proliferation investigators work tirelessly to combat the illegal export and proliferation of sensitive U.S. military and dual-purpose technology,” stated HSI New York Special Agent in Charge Walker.  “Standing alongside our law enforcement partners, we are committing to stopping the Russian war machine in its tracks.”

FBI Assistant Director in Charge Dennehy stated, “Nikolay Goltsev served as a vehicle to reinforce Russia’s militant efforts against Ukraine through the distribution of electronics to sanctioned entities. Goltsev selfishly prioritized profits from this multi-million-dollar scheme at the expense of safeguarding United States technology against adversarial nations. May today’s sentencing reinforce the FBI's commitment to confront foreign countries which steal our technology to advance their nefarious and warmongering goals.”

“Working with our law enforcement colleagues, the Office of Export Enforcement will continue to target networks that facilitate illicit shipments that support Russia’s war. Today’s sentencing is just the latest example of our resolute efforts to target, disrupt and dismantle these networks,” stated Department of Commerce EEO Special Agent in Charge Carson. 

Goltsev used two Brooklyn companies, SH Brothers Inc. and SN Electronics Inc., to unlawfully source, purchase and ship millions of dollars in dual-use electronics from U.S. manufacturers to sanctioned end users in Russia.  Some of the electronic components and integrated circuits shipped by the defendants through SH Brothers have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.  Some of these components were critical to Russia’s precision-guided weapons systems being used against Ukraine.  During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.

To carry out the criminal scheme, Goltsev, along with co-defendant Salimdzhon Nasriddinov and others, purchased the electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics and arranged for the items to be shipped from those manufacturers and distributors to various locations in Brooklyn.  The co-conspirators then unlawfully shipped the items to a variety of intermediary front companies located in other countries, including Turkey, Hong Kong, India, China and the United Arab Emirates, where they were rerouted to Russia.  Goltsev’s wife, co-defendant Kristina Puzyreva, laundered the funds of the export control scheme.

Goltsev’s communications show that he had a sophisticated understanding of export control laws. For example, in a message in February 2023, Goltsev advised another co-defendant to “write something more substantial [to the U.S. company] so that there are no more questions.”  The co-defendant responded, “is it better to provide them with a Chinese end user,” to which Goltsev stated, “yes should be ok.”

Goltsev’s communications also show that he knew the electronic components were going to Russia for use in Ukraine and support of Russia.  In a May 30, 2023 text message conversation with Puzyreva, the defendants discussed a drone attack in Moscow and their support of Russia:

Puzyreva:        what is Putin waiting for.  He needs to destroy Ukraine.

Goltsev:           yeah they’re gonna get f---ed either way.

Puzyreva:        He needs to put fear into them.  Those losers.

Goltsev:           Well the way he is acting they have the right to do the same.

Puzyreva:        I hate [ethnic slur for Ukrainians] anyway.

The scheme involved millions of dollars and proved to be lucrative for the defendants.  In a text message exchange on or about January 13, 2023, Goltsev complained to Puzyreva that a subordinate of a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million]. Fingers hurting already from the laptop.”  Puzyreva responded, “Lot of money?  We will get rich.”

The government seized $20,000 in cash from the New York hotel room in which Goltsev was arrested.  In total, the government has seized approximately $1.68 million in connection with this export scheme.

On July 24, 2024, co-defendant Kristina Puzyreva was sentenced to 24 months’ imprisonment for conspiracy to launder the proceeds of the export scheme.  Co-defendant Salimdzhon Nasriddinov is awaiting sentencing.

The case was 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.