Maxim Marchenko, 51, and two unnamed Russian co-conspirators were accused of using his shell companies to conceal the fraudulent procurement of so-called OLED micro-displays.
The case was coordinated through the Justice Department's Task Force KleptoCapture, which was created to enforce sanctions, export restrictions and other measures in response to Russia's invasion of Ukraine.
According to federal prosecutors in Manhattan, OLED micro-displays can be used in rifle scopes, night-vision goggles, thermal optics and other weapons systems.
Prosecutors said Marchenko and his co-conspirators falsely represented that the dual-use technology - meaning it had civilian and military applications - was being sent to China, Hong Kong and elsewhere for use in electron microscopes for medical research.
They also said Marchenko's shell companies funneled more than $1.6 million to the U.S. to support the scheme, which ran from May 2022 to August 2023.
The complaint quotes Marchenko telling a co-conspirator on June 29, 2022 about how the White House had a day earlier added five Chinese companies to a trade blacklist for allegedly supporting Russia's military and defense industry.
"So we'll be even more careful," the co-conspirator allegedly responded.
Assistant Attorney General Matthew Olsen of the Justice Department's national security division said the case "reinforces the department's commitment to protect U.S. security and counter Russian aggression in Ukraine through the vigorous enforcement of our export control and sanctions laws."
Marchenko was charged with seven criminal counts including wire fraud, smuggling, money laundering and four conspiracy counts, and could if convicted face several decades in prison.
At a Monday hearing before U.S. Magistrate Judge Andrew Krause in White Plains, New York, Marchenko agreed to be detained, but he is expected to seek bail, court records show.
A federal public defender appointed to temporarily represent Marchenko declined to comment.
On Aug. 31, federal prosecutors in Manhattan charged Arthur Petrov, a dual Russian-German citizen, with also smuggling microelectronics technology with military uses to Russia.
The case is U.S. v. Marchenko, U.S. District Court, Southern District of New York, No. 23-mj-06181.
(Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy)
By Jonathan Stempel
