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11 Charged In Military Electronics Case

Wed, 10/03/2012 - 2:00pm
Tom Hays, Associated Press

NEW YORK (AP) -- A Kazakhstan-born businessman was charged in the U.S. on Wednesday with being a secret Russian agent involved in a scheme to illegally export microelectronics from the United States to Russian military and intelligence agencies.

Alexander Fishenko was among 11 defendants named in an indictment unsealed in federal court in New York.

Eight defendants, including the 46-year-old Fishenko, were arrested Tuesday night and Wednesday morning and were to be arraigned in Houston. Three others were still being sought.

"The defendants tried to take advantage of America's free markets to steal American technologies for the Russian government," Loretta Lynch, U.S. Attorney in Brooklyn, said in a statement.

The indictment alleges that since October 2008, Fishenko and his co-defendants "engaged in a surreptitious and systematic conspiracy" to obtain the high-tech electronics from U.S. makers and suppliers while purposely evading licensing requirements.

The microelectronics are subject to strict government controls. Authorities say they could have a wide range of military uses, including radar and surveillance systems, weapons guidance systems and detonation triggers.

Fishenko, a naturalized U.S. citizen and owner of Houston-based Arc Electronics Inc., was charged with operating inside the U.S. as an unregistered agent of the Russian government.

According to court papers, Fishenko was born in the former Soviet Republic of Kazakhstan and graduated from a technical institute in St. Petersburg before coming to the U.S. in 1994. He holds U.S. and Russian passports and frequently travels overseas.

An analysis of Arc's accounting records showed a "striking similarity between fluctuations in Arc's gross revenues and the Russian Federation's defense spending over the last several years," the court papers say. Investigators also recovered a letter to Arc from a Russian domestic intelligence agency lab complaining that microchips supplied by the company were defective, the papers add.

Prosecutors said the evidence, which includes calls and emails intercepted by U.S. investigators, revealed attempts by Fishenko to hide his work. In one instance in March, he "directed an employee of a Russian procurement firm to 'make sure that our guys don't discuss extra information, such as this is for our military client,'" the papers say.

FBI agents in Houston executed a search warrant on Wednesday at Fishenko's firm. A phone call to the company would not go through.

Associated Press writer Juan A. Lozano in Houston contributed to this report.

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