Russians and Italians Accused of Dodging US Trade Sanctions

ATLANTA (CN) — An indictment unsealed by a Georgia federal judge charges Russian and Italian nationals, a U.S. citizen and several companies in a conspiracy to circumvent American trade sanctions by disguising the destination of drilling equipment.

(AP Photo/Mark J. Terrill, File)

The indictment unsealed Monday and announced by the Justice Department on Tuesday states that an unnamed Russian government-controlled oil and gas company contracted with Russian citizen Oleg Nikitin and his Russian-based company KS Engineering to purchase a Vectra 40G power turbine from a U.S.-based manufacturer for about $17.3 million.

The turbine was designed and manufactured “for integration with gas generators to enable direct drive of high power gas compressors,” according to the indictment filed in Savannah, Georgia federal court.

Prosecutors say evidence established the Russian company’s intent to use the turbine on an Arctic deepwater drilling platform for the production of oil or gas.

The alleged scheme violates U.S. restrictions on exports to Russia’s oil and gas industry, which were imposed following the Russian annexation of Crimea and its use of force in Ukraine.

For national security reasons, the U.S. Department of Commerce has expressly prohibited any unlicensed shipment or transfer of the Vectra turbine to the Russian company for deepwater drilling purposes, the Justice Department said.

The indictment alleges that Nikitin, fellow Russian citizen Anton Cheremukhin and KS Engineering hired Italian citizen Gabriele Villone, Villone’s Italian-based company GVA International Oil and Gas Services, and GVA employee and fellow Italian citizen Bruno Caparini to obtain the Vectra turbine on their behalf to evade the U.S. trade sanctions.

Villone, Caparini and GVA then allegedly contracted U.S. citizen Dali Bagrou and Bagrou’s U.S.-based company World Mining and Oil Supply to procure the turbine from a U.S.-based manufacturer and ship it overseas.

The Justice Department said in a statement Tuesday that the defendants conspired to hide the true end user of the Vectra turbine from its manufacturer and the U.S. government by filing paperwork falsely stating it would be used by an American company in the Atlanta area.

“The defendants tried to defraud the United States by evading sanctions put in place to keep U.S. goods out of the hands of some of the world’s most dangerous actors,” Southern Georgia U.S. Attorney Bobby L. Christine said in a statement. “We will continue to prosecute to the fullest extent of the law those who threaten our national security.”

Douglas R. Hassebrock, acting assistant secretary for export enforcement at the Commerce Department, also emphasized the importance of enforcing the sanctions.

“Detecting, preventing, and prosecuting those who conspire to illegally export U.S. origin commodities to sanctioned and entity listed companies, such as those involved in this case in Russia, remains a top priority for the Bureau of Industry and Security,” he said.

The indictment was returned by a federal grand jury in October.

Nikitin, Cheremukhin, KS Engineering, Villone, GVA International Oil and Gas Services, and Caparini are accusing of violating and conspiring to violate the International Emergency Economic Powers Act and the Export Control Reform Act, in addition to charges of conspiracy to commit wire fraud and conspiracy to commit money laundering.

Bagrou and World Mining and Oil Supply have been charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.

Nikitin, Villone, and Bagrou were arrested in Savannah while attempting to complete the illegal transaction, according to prosecutors. They are currently awaiting trial.

Nikitin, Cheremukhin, Villone, and Caparini could each face up to 25 years in prison and a $1.25 million penalty if convicted. Bagrou faces up to 20 years in prison and a $500,000 fine.

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