Earlier today in United States District Court in Brooklyn, Alexander Posobilov was sentenced to 135 months’ imprisonment for conspiring to export and illegally exporting controlled microelectronics to Russia, as well as for conspiring to launder money.

Posobilov, together with ten other individuals and two corporations – ARC Electronics, Inc. (ARC) and Apex System, L.L.C. (Apex) – were indicted in October 2012. Posobilov and two co-conspirators were subsequently convicted at trial on all counts in October 2015. Of the remaining defendants, five pleaded guilty and three remain at large. ARC is now defunct, and Apex, a Russian-based procurement firm, failed to appear in court.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Acting Assistant Attorney General for National Security Mary B. McCord.

“Posobilov helped lead a criminal operation that through lies and subterfuge profited handsomely from the unlawful sale and export of sophisticated American microelectronics for use by the Russian military,” stated United States Attorney Capers. “Today’s sentence shows that those who compromise the national security of the United States for their personal financial gain will face serious punishment.” Mr. Capers extended his grateful appreciation to the Federal Bureau of Investigation, Houston Field Office and the Department of Commerce for their leading roles in the investigation.

“With this sentence, Alexander Posobilov is being held accountable for evading export laws and illegally exporting American microelectronics to Russia for military use,” said Acting Assistant Attorney General McCord. “Export laws exist as an important part of our national security framework and protecting national assets from ending up in the hands of our potential adversaries is one of our highest priorities.”

Posobilov joined ARC in 2004, where he ascended to become the procurement manager and day-to-day director of the company. Between approximately October 2008 and October 2012, managed a team of employees who worked to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to in Russia, while evading the government licensing system set up to control such exports. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia was not capable of producing many of these sophisticated goods domestically. Between 2002 and 2012, ARC shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. ARC’s largest clients were certified suppliers of military equipment for the Russian Ministry of Defense.

To induce manufacturers and suppliers to sell these high-tech goods to ARC, and to evade applicable export controls, Posobilov and his co-conspirators provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce.

Ultimate recipients of ARC’s products included a research unit for the Russian FSB internal security agency, a Russian entity that builds air and missile defense systems and another that produces electronic warfare systems for the Russian Ministry of Defense.

Today’s sentencing took place before United States District Senior Judge Sterling Johnson, Jr.

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Richard M. Tucker and Una A. Dean, as well as Trial Attorney David Recker from the National Security Division’s Counterintelligence and Export Control Section, are in charge of the prosecution. Assistant United States Attorney Claire Kedeshian is handling the forfeiture aspects of the case.

The Defendant:

ALEXANDER POSOBILOV

Age: 62

Houston, Texas

E.D.N.Y. Docket No. 12 CR 626 (SJ)