FBI raids alleged Russian front-company, indicts 11 on spy charges

By JOSEPH FITSANAKIS | intelNews.org |
The United States has indicted employees of an alleged Russian front-company in Texas, accused of procuring sensitive microelectronics technology for use by Russian military and intelligence agencies. Public prosecutors in New York said yesterday that the Federal Bureau of Investigation conducted raids in locations around Houston, Texas, which included the headquarters of Arc Electronics, Inc. The export firm is accused of having shipped over $50 million-worth of military-grade microelectronics since 2008. The supplies were received in Moscow, Russia, by a mysterious procurement company called Apex System LLC. Counterintelligence investigators in the US claim both firms are part of an elaborate scheme set up by Russian military intelligence, aimed at stealing dual-use electronics hardware created by American firms. According to the indictment, Arc Electronics told its US suppliers that the microelectronics technologies were intended for use in various types of streetlights. But in reality, said the FBI, the company gave the hi-tech supplies to the Russian Ministry of Defense for use in airborne surveillance systems, as well as in remote weapons guidance systems, among other military applications. Federal prosecutors said that, for over four years, Arc Electronics engaged in a prolonged “surreptitious and systematic” scheme to circumvent US government export controls, thus seriously damaging US national security. Following the early-morning raids, the FBI unsealed indictments against 11 Arc Electronics employees, most of whom were charged with “acting as unregistered agents of the Russian Federation in the United States” —legal jargon for espionage. Among those indicted is the chief executive officer of both Arc Electronics and Apex Systems, Alexander Fishenko, a naturalized American citizen originally from Kazakhstan, who has also been indicted on money-laundering charges. Eight of the 11 defendants were arrested in Texas; they are expected to be flown to New York in the coming days, where they are scheduled to face trial on multiple charges. If found guilty, the 11 defendants face up to 25 years in prison.