Russian Charged in Procurement Scheme

Ilya Balakaev, 47, of Moscow, was charged In the Eastern District of New York with various offenses related to a years-long scheme to illegally smuggle sensitive devices used in counterintelligence operations from the United States to Russia for the benefit of the Federal Security Service of the Russian Federation (FSB), the principal intelligence and security agency of the Russian government.

Balakaev is further charged with illegally exporting a gas detector and related software from the United States to Russia for the benefit of North Korea (DPRK).

Balakaev would purchase the electronic devices on the internet or directly through the United States-based manufacturers and ship them to an accomplice’s home in Richmond, Virginia. Then Balakaev flew to the United States to pick up the devices and bring them back to Russia or had others ship the electronic devices from the United States to Russia.

The electronic devices Balakaev purchased, repaired, and sold to the FSB and DPRK are subject to the EAR and are items commonly used as part of sensitive foreign counterintelligence and military operations, including the transmission of encrypted communications, the ability to scan a room to determine if it was bugged, and the detection of hazardous gases.  These included spectrum analyzers and signal generators.

Balakaev was aware of the applicable U.S. export control laws which prohibited him from purchasing the electronic devices in the United States for ultimate end use by the FSB and DPRK. As described in the indictment, on or about November 5, 2019, his Richmond colleague emailed Balakaev a hyperlink to a BIS document titled “Don’t Let This Happen To You!: Actual Investigations of Export Control and Antiboycott Violations.” In the email, he told Balakaev to “Take a look just in case.”

The BIS document provided “an introduction to the consequences of violating U.S. export control law.” In addition to explaining U.S. export control laws, the document noted specific examples of individuals who violated U.S. sanction regulations by exporting items to Russia without a BIS license. Balakaev subsequently downloaded the document and saved the document to his computer.

Concurrently, Commerce Department separately issued a Temporary Denial Order denying the export privileges of Balakaev and his company, Radiotester OOO, for 180 days with the possibility of renewal.