By Nate Raymond
NEW YORK (Reuters) – The former owner of a Houston company was sentenced on Thursday to 10 years in prison after admitting that he operated as an unauthorized agent of the Russian government who exported sensitive microelectronics for its military’s use.
Alexander Fishenko, who pleaded guilty in September to engaging in a scheme that resulted in over $30 million in technology sales, largely to Russian military entities, was sentenced by U.S. District Judge Sterling Johnson in Brooklyn.
The sentence, which included an order that Fishenko, 50, forfeit over $500,000, was confirmed by the U.S. Justice Department. A lawyer for Fishenko did not immediately respond to a request for comment.
Fishenko, who founded Arc Electronics Inc in 1998, was among 11 people charged in 2012 in connection with what authorities said was an elaborate procurement network intended to evade federal export controls.
Five defendants including Fishenko pleaded guilty, while three former Arc Electronics employees including Fishenko’s alleged right-hand man, Alexander Posobilov, were convicted at trial in October.
Prosecutors said Fishenko, a dual U.S.-Russian citizen, led a conspiracy to supply cutting-edge microelectronics that are frequently used in military systems to, among others, the Russian military via intermediary Russian companies.
Prosecutors said Fishenko and Posobilov hired and trained a cadre of Russian-speaking sales people to lie to vendors about why Arc was seeking these technologies and to falsify export records.
Seven of Arc’s top 10 clients were specially authorized by the Russian Ministry of Defense to procure parts for its military, prosecutors said, and the company functioned as the U.S.-based arm for one Moscow-based client, Apex System LLC.
Those who received Arc’s products included a technical research unit for the Russian FSB internal security agency and Russian entities that built air and missile defense systems and that produced electronic warfare systems, prosecutors said.
Fishenko pleaded guilty two weeks before a scheduled trial to all 19 counts he faced, including that he acted as an unauthorized agent of a foreign government and conspired to commit export violations and wire fraud.
In court papers, his lawyers say that while he admitted to being, as defined in statute, an unregistered agent of the Russian government, he was not a “spy,” as some media have characterized him.
As for the export violations, they say Fishenko intended for Arc to be a lawful export company, but “wrongly fostered a laissez-faire attitude toward the licensing requirements.”
(Editing by Bernadette Baum)