A businessman has been arrested in the US and charged with unlawfully exporting sensitive technology including semiconductors to a sanctioned business with ties to Russia's military and intelligence agencies.

Court documents filed with the US District Court for the Eastern District of New York identify the man as Ilya Kahn, a 66-year-old citizen of the US, Israel, and Russia, and listed as a resident of Brooklyn, New York, and Los Angeles.

Kahn was arrested for his alleged involvement in a long-running scheme to acquire and unlawfully export sensitive technology from the US for the benefit of a Russian business, a semiconductor company with close ties to the Russian government.

That business, Joint Stock Company Research and Development Center ELVEES (Elvees), was added to the US Commerce Department's Entity List in March 2022. It was then sanctioned by the Treasury Department in September 2022 for facilitating Russia's military and its invasion of Ukraine.

Kahn is claimed to be the owner of Senesys Incorporated, based in California, and Sensor Design Association, which has a contact address in Brooklyn. The companies were supposedly involved in security software development and testing of silicon wafers for military avionics and space use.

As alleged in the complaint [PDF], Kahn is said to have used these businesses to acquire sensitive electronic devices in the US and export them to Elvees, without acquiring the appropriate licenses.

Kahn is said to have exported various microcontrollers to Elvees in Russia, plus US-made network interface controllers and a radio-frequency transmitter by way of a Hong Kong-based shipping company. Each of these items required an export license from the Commerce Department, which the Feds said Kahn did not obtain. The exact types of microcontroller and other kit were not disclosed.

The complaint goes on to claim the accused arranged for Elvees to continue to receive semiconductors manufactured in Taiwan following Russia's invasion of Ukraine in February 2022. The Taiwanese manufacturer halted shipments to Russia, and according to the filing, Kahn is claimed to have arranged for the chips to be sent first to the US, then re-exported to Russia through a shipping company based at John F. Kennedy International Airport.

The complaint also alleges Kahn emailed design guidance for an Elvees-branded microchip to a Taiwanese manufacturer in May 2022, and subsequently exported thousands of units of this microchip. These went to a Hong Kong shipping company, then to a company located in mainland China.

The court document notes that Kahn informed the Hong Kong shipping company that he received a "call from Russia" about the Chinese business to which he was directing the goods.

Investigating the case are the FBI and the Department of Commerce's Bureau of Industry and Security (BIS), with assistance from the US Attorney's Office for the Central District of California.

If convicted, Kahn faces a maximum penalty of 20 years in prison for conspiracy to violate the Export Control Reform Act (ECRA), and will make his initial court appearance in the Central District of California. No date for this has been disclosed. ®

https://www.theregister.com//2024/01/19/russia_chip_exports_arrest/