Russian arrested in Houston pleads guilty to smuggling technology

Federal officials say Alexander Fishenko's company claimed to be making traffic lights but was sending microelectronics to Russia instead. Federal officials say Alexander Fishenko's company claimed to be making traffic lights but was sending microelectronics to Russia instead. Photo: Billy Smith II Photo: Billy Smith II Image 1 of / 5 Caption Close Russian arrested in Houston pleads guilty to smuggling technology 1 / 5 Back to Gallery

A former Houston businessman on Wednesday pleaded guilty to federal charges that he spent years smuggling American-made technology to the Russian military through a fraudulent business in the Bayou City.

Alexander Fishenko, 49, was arrested in Houston in 2012 after a two-year FBI investigation concluded he'd falsified documents and skirted federal trade regulations to traffic advanced microelectronics that could not be produced in Russia. At a federal courthouse in Brooklyn, he pleaded guilty to all charges.

"Alexander Fishenko illegally acted as an agent of the Russian government in the United States and evaded export laws by sending microelectronics and other technology with military applications to Russia," said Assistant Attorney General John Carlin in a statement.

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According to court documents, Fishenko is a Kazakh-born dual citizen of the United States and Russia, who founded Arc Electronics in Houston in 1998. Over a 10-year period, Arc shipped about $50 million worth of regulated technology to Russia.

To do so, Fishenko and others lied to American manufacturers, claiming on at least one occasion that microelectronics bound for anti-submarine warfare would be exported to fishing ships.

"Arc would receive shopping lists from Russian entities, and they would go about acquiring the parts on the shopping lists," FBI agent Crosby Houpt testified in 2012.

Under an August 2001 executive order issued by President George W. Bush, the Department of Commerce placed restrictions on the export of goods it determined could make a significant contribution to the military potential of other nations, and imposed strict licensing.

And federal law requires separate licensing for trade of any item included on a federal munitions list.

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Fishenko covertly shipped goods with a wide range of military applications, according to prosecutors, including radar and surveillance systems, weapons targeting systems and detonation triggers. Those goods included: analog-to-digital converters, amplifiers, digital signal processors, micro-controllers, static random access memory chips and field programmable gate arrays.

After the 2012 arrest, the FBI's Houston Division head, Stephen Morris, said, "In this day and time, the ability of foreign countries to illegally acquire sensitive and sophisticated U.S. technology poses a significant threat to both the economic and national security of our nation."

Fishenko was one of 11 people accused in 2012 for their alleged roles in a "Russian military procurement network," according to court documents. Four previously pleaded guilty, three are scheduled to begin trial this month and three are foreign nationals residing abroad.

Following Fishenko's guilty plea and conviction, agents will seize his property near Interstate 10 and Beltway 8 and on FM 149 in the Sam Houston National Forrest. Fishenko could face up to 16 years behind bars.