Maxim Marchenko, 52, was sentenced Wednesday to three years in prison for his role in procuring dual-use, military-grade OLED micro-displays for Russian end users, officials stated.
These microdisplays have significant military applications, such as in rifle scopes, night vision goggles, thermal optics, and other weapon systems.
“The transshipment of military-grade microelectronics through Hong Kong to Russia helps fuel the engine of Russia’s war machine,” said Assistant Secretary of Commerce Matthew S. Axelrod for Export Enforcement. “Today’s sentencing is just the latest example of our unceasing efforts to target and disrupt illegal Russian procurement networks.”
“This office will stop at nothing to hold accountable those who seek to circumvent our laws to gain access to some of our most sensitive technologies,” said U.S. Attorney Damian Williams for the Southern District of New York. “Today’s sentence should be a reminder that no number of shell companies or obfuscation will stop this office in its pursuit of those who seek to illicitly gain access to controlled technologies.”
“Marchenko and his co-conspirators operated an international smuggling network of sensitive microelectronics used in military gear and other weapons systems,” said Executive Assistant Director Robert Wells of the FBI National Security Branch. “Today’s sentencing demonstrates the FBI’s resolve in doing our part to protect national security and prevent American military technology from being diverted to foreign adversaries and hostile nation-states.”
According to court documents, Marchenko, a Russian national living in Hong Kong, operates several shell companies there, including Alice Components Co. Ltd., Neway Technologies Limited, and RG Solutions Limited.
Marchenko and two other Russian nationals run an illicit procurement network in Russia, Hong Kong, and other locations. This network fraudulently obtained large quantities of dual-use, military-grade microelectronics, specifically OLED micro-displays, from U.S. distributors for Russia-based end users.
Marchenko and his co-conspirators used Hong Kong-based shell companies and other deceptive methods to hide from U.S. government agencies and distributors that the OLED micro-displays were intended for Russia.
To execute the scheme, Marchenko and his associates acquired the dual-use OLED micro-displays from U.S. distributors using shell companies like Alice Components, Neway, and RG Solutions.
Marchenko and his co-conspirators acquired sensitive microelectronics by falsely claiming to U.S. distributors that Alice Components was sending the shipments to end users in China, Hong Kong, and other countries for use in electron microscopes for medical research or hunting rifles. In reality, the OLED micro-displays were destined for Russia.
To conceal this, Marchenko and his associates used shell companies in Hong Kong and other deceptive methods to hide the true destination from U.S. distributors and agencies.
They transshipped the micro-displays through third countries, primarily using Marchenko’s pass-through entities, and ultimately sent them to Russia via a freight forwarder known for servicing Russia.
Marchenko and his co-conspirators used Hong Kong-based shell companies to hide that payments for the OLED micro-displays were originating from Russia.
Between May 2022 and August 2023, Marchenko’s shell companies funneled over $1.6 million to the United States to support the smuggling of these micro-displays to Russia
The FBI, the Commerce Department’s Bureau of Industry and Security, and the Department of State’s Diplomatic Security Service investigated.
Assistant U.S. Attorneys Jennifer N. Ong and Shiva H. Logarajah for the Southern District of New York prosecuted the case, with assistance from Trial Attorney Garrett Coyle of the National Security Division’s Counterintelligence and Export Control Section.