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Press Release

Federal Court Orders Forfeiture of $826K in Funds Used in Attempt to Export Dual-Use High Precision Jig Grinder to Russia

For Immediate Release
U.S. Attorney's Office, District of Connecticut

An investigation into the attempted smuggling of a dual-use export-controlled item to Russia in violation of United States export laws and regulations has resulted in the forfeiture of approximately $826,000.

U.S. Attorney Vanessa Roberts Avery; Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division; Andrew Adams, Director of Task Force KleptoCapture; Acting Special Agent in Charge Michael J. Krol of Homeland Security Investigations (HSI), New England; Special Agent in Charge Rashel D. Assouri of the U.S. Department of Commerce’s Office of Export Enforcement, Boston; and Special Agent in Charge Robert Fuller of the FBI New Haven Division made the announcement.

As alleged in court documents and statements made in court, beginning in 2018, operators of a Latvia-based corporation conspired with the operator of By Trade OU, an Estonia-based company, as well as individuals in Russia and a Russia-based company, to violate U.S. export laws and regulations and smuggle a jig grinder that was manufactured in Connecticut to Russia.  A jig grinder is a high-precision grinding machine system that does not require a license to export to European Union countries, but does require a license for export and reexport to Russia because of its potential application in nuclear proliferation and defense programs.  At no time did the defendants apply for, receive or possess a license of authorization from the U.S. Department of Commerce to export or reexport the jig grinder to Russia, as required by the Export Control Reform Act of 2018 and the Export Administration Regulations (“EAR”), which restrict the export of items that could make a significant contribution to the military potential of other nations or that could be detrimental to U.S. foreign policy and national security.

U.S. authorities, working with Latvian authorities, intercepted the jig grinder in Riga, Latvia, before it was to be shipped to Russia.

Several individuals and companies involved in this alleged scheme have been charged by indictment in the District of Connecticut with conspiracy, violation of the Export Control Reform Act, smuggling goods from the United States, and international money laundering conspiracy offenses. 

On December 1, 2022, By Trade OU pleaded guilty to one count of conspiracy to violate the Export Control Reform Act, and one count of international money laundering conspiracy.  In pleading guilty, By Trade OU admitted that it received funds from a Russian company, identified in the indictment as “Company B,” to purchase a jig grinder on its behalf from a Latvian company that had arranged to purchase the jig grinder from the Connecticut manufacturer.

On March 29, 2023, in a related civil forfeiture action, U.S. District Judge Victor A. Bolden ordered the forfeiture of $484,696 that had been delivered to the Connecticut manufacturer as part of the attempted purchase of the jig grinder.  On April 4, 2023, in association with the sentencing of By Trade OU, Judge Bolden ordered the forfeiture of an additional €312,192.44 (approximately $342,000) seized from By Trade OU.

As to the other defendants charged in the indictment, U.S. Attorney Avery stressed that an indictment is merely an allegation, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This investigation is being conducted by HSI field offices in New Haven, Portland (Ore.), and the Hague, Netherlands; the U.S. Department of Commerce’s Office of Export Enforcement in Boston; and the FBI.  The Prosecutor-General’s Office of the Republic of Latvia, the Prosecutor General’s Office of the Republic of Estonia, Latvian Tax and Customs Police, Estonian Tax and Customs Board, and the Latvian State Police are assisting the investigation.

This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale, Konstantin Lantsman, and David Nelson of the District of Connecticut, and Trial Attorney Matthew Anzaldi of the Justice Department’s National Security Division.  The Justice Department’s Office of International Affairs is providing valuable assistance. 

The investigation was coordinated with the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls, and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all of the Department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

This case is being prosecuted through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program.  OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies.  Additional information about the OCDETF Program can be found at

Updated April 5, 2023

Export Control
Asset Forfeiture