19 - The Brazhnikov Affair

Alexander Brazhnikov Sr. was indicted after he allegedly moved an estimated $65 million in electronics from the United States to the Russian Federation from 2008 to 2014.[1] His customers allegedly included the Russian military, internal security services, and VNIIEF,[2] the latter of which is one of Russia’s most important nuclear weapons entities. Operating pre-Crimea annexation in an era of less scrutiny, the scheme was set up in a relatively simple manner. Brazhnikov collected requests for electronics from Russian security entities and transmitted the requests to his son in New Jersey, who pled guilty to illegally smuggling dual-use components to Russia’s defense industrial complex and nuclear sites as part of the case.[3]  Mr. Brazhnikov Sr. allegedly also sometimes sent the requests to the electronics providers themselves. His son in New Jersey bought the electronics and then sent them to his father in Russia. Mr. Brazhnikov’s son only had to lie on the documents about the true end user and lie about the value to avoid scrutiny. [4]

Mr. Brazhnikov Sr. created a series of companies in Moscow whose purpose was to act as a false end user. Mr. Brazhnikov Sr.’s true customers, Russia’s military, security service, and nuclear complex, paid through a series of bank accounts in the British Virgin Islands, Latvia, Panama, Marshal Islands, UAE, U.K. and other secretive bank havens. Profits from the scheme could also be sent back to Mr. Brazhnikov’s son in New Jersey with less suspicion that way. The sensitive technologies included: power detectors; fast-settling logarithmic detectors; miniature power relay equipment; thermistors for overload protection; high speed high output current voltage feedback amplifiers; and oscillator frequency convertors. [5]