Guilty plea in Russia tech supply scheme

According to court documents,  Vadim Yermolenko, 43, a dual U.S.-Russian national was affiliated with Serniya Engineering and Sertal LLC, Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military industrial complex and research and development sector.

Serniya and Sertal operated a vast network of shell companies and bank accounts throughout the world, including the United States, that were used in furtherance of the scheme to conceal the involvement of the Russian government and the true Russian end users of U.S.-origin equipment.

The defendant and his co-conspirators unlawfully purchased and exported highly sensitive, export controlled electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications.

Following Russia’s invasion of Ukraine in February 2022, OFAC and BIS levied sanctions and imposed additional export restrictions on Serniya, Sertal, and several individuals and companies used in the scheme, calling them “instrumental to the Russian Federation’s war machine.”

Sertal was licensed to conduct highly sensitive and classified procurement activities by Russia’s Federal Security Service (FSB), Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB.

The Serniya network’s Russian clients included State Corporation Rostec, the state-owned defense conglomerate; State Atomic Energy Corporation Rosatom; the Ministry of Defense; the Foreign Intelligence Service (SVR); and various components of the FSB, including the Department of Military Counterintelligence and the Directorate for Scientific and Technological Intelligence, commonly known as “Directorate T.”

To carry out the scheme, the defendant helped set up numerous shell companies and dozens of bank accounts in the U.S. to illicitly move money and export-controlled goods.  During the period charged in the indictment, more than $12 million passed through accounts owned or controlled by the defendant.

These funds were used in part to purchase sensitive equipment used in radar, surveillance and military research and development. In one instance, money from one of the defendant’s accounts was used to purchase export-controlled sniper bullets, which were intercepted in Estonia before they could be smuggled into Russia.

Co-defendant Alexey Brayman , a Ukraine-born Israeli living in New Hampshire, previously pleaded guilty to conspiracy to defraud the United States and is awaiting sentence.  Brayman's role involved shipping “advanced electronics and sophisticated testing equipment used in quantum computing, hypersonic and nuclear weapons development and other military and space-based military applications,” through his wife’s home-based Etsy Crafts Business. 

The case against co-defendant Vadim Konoshchenok, a suspected FSB operative, was dismissed after Konoshchenok was removed from the United States as part of a prisoner exchange negotiated between the United States and Russia.

Defendant Nikolaos Bogonikolos’ case remains pending. Defendants Boris Livshits, Alexey Ippolitov, Svetlana Skvortsova, and Yevgeniy Grinin remain at large.