Individuals and companies disguised destination of mining equipment
A newly unsealed superseding indictment has charged Russian and Italian nationals, a U.S. Citizen and various companies in a conspiracy to evade international trade sanctions.
The United States District Court for the Southern District of Georgia unsealed the superseding indictment on Monday, charging two Russian nationals, two Italian nationals, a U.S. citizen, and various companies with violating and conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Export Control Reform Act of 2018 (ECRA), conspiracy to commit wire fraud, and conspiracy to commit money laundering, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.
The indictment, which was returned in October 2019 by a federal grand jury in Savannah, Ga., charges Oleg Vladislavovich Nikitin; Nikitin’s Russian-based company KS Engineering (KSE); KSE employee Anton Cheremukhin; Gabriele Villone; Villone’s Italian-based company GVA International Oil and Gas Services (GVA); and GVA employee Bruno Caparini, with violating and conspiring to violate IEEPA/ECRA. Additionally, the aforementioned defendants, Dali Bagrou, and Bagrou’s U.S.-based company World Mining and Oil Supply (WMO) are charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. Nikitin, Villone, and Bagrou were all arrested in Savannah, Ga., while attempting to complete the illegal transaction and are awaiting trial.
“This prosecution demonstrates the high priority the Department of Justice places on the enforcement of U.S. restrictions on exports to Russia’s oil and gas industry,” said Assistant Attorney General for National Security John C. Demers. “The U.S. government imposed these restrictions following the Russian annexation of Crimea and its use of force in Ukraine. Russia continues to undermine democratic processes and institutions in that region and adversely affects our national security.”
“The defendants tried to defraud the United States by evading sanctions put in place to keep U.S. goods out of the hands of some of the world’s most dangerous actors,” said U.S. Attorney Christine. “We will continue to prosecute to the fullest extent of the law those who threaten our national security.”
“Detecting, preventing, and prosecuting those who conspire to illegally export U.S. origin commodities to Sanctioned and Entity Listed companies such as those involved in this case in Russia, remains a top priority for the Bureau of Industry and Security,” said Douglas R. Hassebrock, Acting Assistant Secretary for Export Enforcement. “We are committed to bringing lawbreakers who have willfully chosen to threaten our Nation’s security to justice. And, as always, we are very grateful to work jointly with our enforcement partners.”
“The defendants in this case went to great lengths to circumvent export control laws enacted to protect our nation’s security,” said Cynthia A. Bruce, Special Agent in Charge of the Defense Criminal Investigative Service, Southeast Field Office. “The DCIS will aggressively support our law enforcement partners working to ensure protected items don’t fall into the wrong hands.”
“This brazen scheme to undermine United States sanctions was a direct threat to national security,” said Special Agent in Charge of FBI Atlanta, Chris Hacker. “But because of the tireless efforts of federal law enforcement partners, the deception ends and the first steps in bringing these defendants to justice begins.”
“U.S. Customs and Border Protection’s collaboration with our fellow federal law enforcement agencies is critical to the successful enforcement of US import and export laws,” said Donald F. Yando, Director, Field Operations, Atlanta Field Office, U.S. Customs and Border Protection. “These partnerships provide for the successful identification and destruction of these types of criminal enterprises.”
According to the indictment, an unnamed Russian government-controlled business contracted with Nikitin and KSE to purchase a Vectra 40G power turbine from a U.S.-based manufacturer for approximately $17.3 million. The Vectra 40G was designed and manufactured for integration with gas generators to enable direct drive of high-power gas compressors. Evidence in the case established the intent of the Russian company to use the Vectra on a Russian Arctic deepwater (greater than 500 feet) drilling platform. For reasons of national security, the U.S. Department of Commerce expressly prohibited any unlicensed shipment or transfer of the Vectra to the Russian company for that purpose.
In an attempt to evade U.S. export laws, the indictment alleges that Nikitin, Cheremukhin and KSE hired Villone, Caparini and GVA to obtain the Vectra on their behalf. Villone, Caprini and GVA then employed the services of Bagrou and WMO to procure the Vectra from a U.S.-based manufacturer and to have the Vectra shipped overseas. The parties conspired to conceal the true end user of the Vectra from both the U.S. manufacturer and the U.S. government by submitting false documentation that stated the Vectra would be used by a U.S. company in and around Atlanta.
Nikitin, Cheremukhin, Villone and Caparini face a maximum sentence of 20 years in prison and a $1 million fine on the charge of violating IEEPA/ECRA and a maximum of five years in prison and a $250,000 fine for conspiracy to violate IEEPA/ECRA and to defraud the United States. Bagrou and the aforementioned defendants also face a maximum of 20 years in prison and a $500,000 fine on the charges of conspiracy to commit wire fraud and conspiracy to launder monetary instruments.
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, as well as the Defense Criminal Investigative Service and the Federal Bureau of Investigation investigated the case with assistance from the Georgia Department of Natural Resources and Customs and Border Protection. Assistant U.S. Attorneys Jennifer G. Solari and Steven H. Lee are prosecuting the case with Trial Attorney William A. Mackie of the National Security Division’s Counterintelligence and Export Control Section.