A federal court has ordered the forfeiture of approximately $826,000 in funds connected to an attempt to smuggle a dual-use export-controlled item to Russia. The high-precision jig grinder, manufactured in Connecticut, was intercepted in Riga, Latvia, before it could be shipped to Russia. The machine is subject to export restrictions due to its potential applications in nuclear proliferation and defense programs.
The alleged smuggling operation began in 2018 and involved a Latvia-based corporation working with By Trade OU, an Estonia-based company, as well as individuals in Russia and a Russia-based company. These parties conspired to violate U.S. export laws and regulations, including the Export Control Reform Act of 2018 and the Export Administration Regulations (EAR). These regulations restrict the export of items that could significantly contribute to the military potential of other nations or be detrimental to U.S. foreign policy and national security.
By Trade OU pleaded guilty on December 1, 2022, to one count of conspiracy to violate the Export Control Reform Act and one count of international money laundering conspiracy. The company admitted to receiving funds from a Russian company, referred to as "Company B," to purchase the jig grinder on its behalf from the Latvian company that had arranged to buy the device from the Connecticut manufacturer.
U.S. District Judge Victor A. Bolden ordered the forfeiture of $484,696, which had been delivered to the Connecticut manufacturer as part of the attempted purchase of the jig grinder. On April 4, 2023, in connection with By Trade OU's sentencing, Judge Bolden ordered the forfeiture of an additional €312,192.44 (approximately $342,000) seized from By Trade OU. [Justice Release]
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