Deputy Assistant Attorney General Eun Young Choi Delivers Keynote Remarks at GIR Live: Sanctions & Anti-Money Laundering Meeting
A Russian citizen with alleged ties to Russia’s Federal Security Service (FSB) will be arraigned today on an indictment charging him with conspiracy and other charges related to a global procurement and money laundering network on behalf of the Russian government.
According to court documents, Vadim Konoshchenok, 48, of Tallinn, Estonia, was arrested in Estonia on a provisional arrest warrant issued from the Eastern District of New York and extradited from Estonia to the United States on July 13.
“This defendant, who is suspected of having ties to the FSB, smuggled hundreds of thousands of illicit munitions in support of Moscow’s war machine, using front companies to conceal his criminal enterprise,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice remains steadfast in its mission to counter Russian aggression and we will give no quarter to those who violate U.S. sanctions to further fuel its war effort.”
“In early December, I met with Estonian counterparts in Tallinn regarding the pending U.S. request to arrest Vadim Konoshchenok,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “I would like to pay tribute to Prosecutor General Andres Parmas’s team, and to the Estonian Internal Security Service, for their prioritization of this case, and for their close coordination with the Department of Justice’s Office of International Affairs on the provisional arrest and extradition of Konoshchenok.”
“As alleged, the defendant was a critical participant in a scheme to provide sensitive, American-made electronics and ammunition in furtherance of Russia’s war efforts and weapons development, violating U.S. export controls, economic sanctions and other criminal statutes,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Let this case serve as the latest example that no matter where you are in the world, if you violate U.S. export controls or evade U.S. sanctions, we will not rest until you face justice in a U.S. courtroom.”
“The FBI and our partners work diligently to bring to justice those who assist Russia’s military interests and put national security at risk,” said Assistant Director Suzanne Turner of the FBI’s Counterintelligence Division. “According to the allegations in the indictment, Konoshchenok helped the FSB smuggle military grade ammunition and a range of nuclear and computer equipment which could be used as instruments of war. Today’s indictment is a fierce reminder of the lengths Russian intelligences services will go to advance Russia’s military capabilities. The FBI is deeply committed to disrupting and dismantling these actions.”
According to the indictment and court filings, Konoshchenok and his co-defendants were affiliated with Serniya Engineering and Sertal LLC (the Serniya Network), 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, 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, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce (DOC) Bureau of Industry and Security (BIS) levied sanctions against Serniya, Sertal and several individuals and companies engaged in the scheme, calling them “instrumental to the Russian Federation’s war machine.”
As alleged in the indictment, the Serniya Network was licensed to conduct highly sensitive and classified procurement activities by Russia’s FSB, Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB. According to court documents, in electronic communications, Konoshchenok explicitly identified himself as an FSB “Colonel” and enclosed a photograph of himself wearing his FSB uniform. Additionally, a review of electronic communications equipment recovered from Konoshchenok revealed saved contacts beginning with the prefix “FSB” and email addresses from “FSB[.]ru” domains. One of Konoshchenok’s calendar entries referenced an “FSB order.”
As described in the indictment, Estonia was a popular transshipment point, where Konoshchenok would smuggle U.S.-origin items across the border into Russia. On Oct. 27, 2022, Konoshchenok was detained by Estonian authorities while attempting to cross into Russia from Estonia with approximately 35 different types of semiconductors and electronic components, including several U.S.-origin and export-controlled items. Konoshchenok has also been repeatedly stopped by Estonian border officials attempting to smuggle hundreds of thousands of American-made and export-controlled rounds into Russia, including 6.5 mm, 7 mm, .338 and .308 magnum rounds, which are commonly used by snipers, as well as military-grade .223 rounds.
Konoshchenok used an Estonian front company called Stonebridge Resources and communicated frequently with other co-conspirators about sourcing, transporting and paying for controlled items. In electronic communications, Konoshchenok is clear that his fee is “10%” because he “can’t do less. Sanctions . . . Sanction item for 10%.”
To date, over half a ton of military-grade ammunition linked to Konoshchenok has been recovered or interdicted before being smuggled into Russia.
If convicted, Konoshchenok faces a maximum penalty of 30 years in prison.
The FBI is investigating the case. The Justice Department’s Office of International Affairs and the Estonian authorities, including Estonian Internal Security Service (KAPO) and the Prosecutor General’s Office of the Republic of Estonia, provided significant assistance in securing foreign evidence, the arrest and extradition of Konoshchenok.
Assistant U.S. Attorneys Artie McConnell and Matthew Skurnik for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
This case has been coordinated through the Justice Department’s Task Force KleptoCapture, 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. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will leverage all the Department’s tools and authorities against efforts to evade or undermine the economic actions taken by the U.S. government in response to Russian military aggression.