US accuses son Uss of selling 'oil from Disneyland'

USAaccused the son of the head of the Krasnoyarsk Territory Alexander Uss of illegal oil trade, export of US military technology and money laundering. Uss called the allegations "politically tinged."

What happened

U.S. prosecutors have charged businessman Artem Uss, son of Krasnoyarsk Territory governor Alexander Uss, as well as his partner Yuri Orekhov and three other Russians, with violating U.S. sanctions against Russia and Venezuela, illegal dealings with a Russian aluminum company, and money laundering, according to a report from the office of the Eastern District Attorney. New York. Uss was detained on October 17 in Italy, Orekhov - in Germany for subsequent extradition to the States (the status of the other defendants in the case is not specified in the office materials).

“Since at least 2018, defendants Yuri Orekhov and Artem Uss have organized fraudulent schemes, engaged in illegal exports and money laundering operations through NDA GmbH,” the 49-page indictment, which RBC studied, says. “The defendants and their associates engaged in various activities in violation of US laws and regulations, including the illegal export of millions of dollars worth of military and classified dual-use technology from the US to Russia, and used the US financial system to smuggle millions of barrels of oil out of Venezuela.” According to prosecutors, the defendants used an extensive network of shell companies and bank accounts around the world, as well as cryptocurrency and numerous cash transactions, to implement this scheme and launder illegal proceeds.

The lawyer of Artem Uss, who was detained in Italy, at the request of the United States, told RIA Novosti that his client declares his innocence. “He has activities in Italy, that is, he is not passing through here,” the lawyer said.
Alexander Uss also responded to the accusation. He stated that the accusations against his son have an obvious “political coloring”: “The supply of petroleum products, publicly available equipment and technical means, which are freely sold and bought around the world, is suddenly declared illegal by the American authorities. Why? Only because it is done for the good of Russia.”

How the prosecution describes Uss and his "accomplices"

According to the investigation, Artem Uss and Yury Orekhov have each owned 50% of Nord-Deutsche Industrieanlagenbau (NDA GmbH), registered in Hamburg, since at least 2015. She was engaged in trade in industrial equipment and raw materials.

Prior to this, Orekhov was "a purchasing manager for a Russian aluminum company traded on the stock exchange." Its name is not given in the indictment, but it says that this company was under US sanctions from April 2018 until the end of January 2019. The only aluminum producer in Russia whose shares are traded on the stock exchange is UC Rusal, which was under sanctions during the period specified in the documents. UC Rusal did not answer RBC's question whether Yuriy Orekhov was an employee of the company. According to SPARK, Yuri Yuryevich Orekhov (such a middle name is indicated on the website of the US Treasury, which imposed sanctions against the businessman) has been heading the Yenisei Metallurgical Plant (EMZ) since June 2018. The Krasnoyarsk Metallurgical Plant, on whose territory EMZ operates, through Sibmetcom, is owned by the En+ holding, which controls UC Rusal.

Uss owned stakes in several Russian companies in the Krasnoyarsk Territory and other regions, including a coal mining company in Krasnoyarsk, the report said. He also held senior positions in a subsidiary of a Russian state-controlled oil concern (his name was not disclosed).

The third defendant is Svetlana Kuzurgasheva (also known as Lana Neumann), who was the CEO of the company Network Technologies, allegedly involved in the sale of electronics, and worked at NDA GmbH under the leadership of Orekhov.

Charges were also brought against Sergey Tulyakov, sales director of the Foreign Economic Association Radioexport, and Timofey Telegin, the owner of Abtronics, a supplier of electronic equipment for the Russian military and aerospace industries. In September 2016, the US Bureau of Industry and Security (BIS) placed Radioexport on the sanctions list because it "operates in the Russian sector of weapons or related materials." In January 2018, Abtronics and Telegin were on a similar list, which, according to the bureau, were engaged in activities contrary to the interests of national security or US foreign policy, since they purchased “items of American origin and transferred them to the Russian military and parties from the list of organizations without the necessary licenses".

The defendants in the case also became two Venezuelan oil traders - Juan Fernando Serrano Ponce, known to the investigation as Juanfe Serrano, and Juan Carlos Soto. They, according to prosecutors, “as part of a criminal scheme” entered into illegal oil deals with the Venezuelan state oil and gas company PDVSA, which has been under US sanctions since 2019.

After the announcement of the indictment was published, the US Treasury imposed sanctions against Orekhov, NDA GmbH, as well as Opus Energy Trading, a company associated with Orekhov, registered on March 2, 2022 in the UAE.

Oil fraud allegations

The indictment cites several episodes, the main of which are related to the smuggling of Venezuelan oil, the illegal export of US military and secret dual-use technologies, and money laundering.

“Yuri Orekhov, Artem Uss and their associates have been involved in smuggling hundreds of millions of dollars worth of embargoed PDVSA oil to end-users in Russia and China, including a [Russian] aluminum company and China’s largest state-owned refinery, gas and petrochemicals conglomerate,” it said. in the document.

The prosecution, citing "many documents from the aluminum company and NDA GmbH," alleges that Orekhov and Uss bought oil from PDVSA on several occasions, making payments in dollars through US financial institutions, and supplied it to this aluminum company. For example, in March 2020, in a draft letter addressed to an unnamed member of the Russian State Duma, NDA GmbH proposed alternative sources of supply for this Russian company, including the use of a "small, aggressive trader" who conducts high-risk transactions in the Caribbean, including with PDVSA. selling oil at a 40 percent discount. In March 2022, in a correspondence with oil trader Juan Fernando Serrano Ponce, Orekhov announced that he was negotiating with Venezuela to supply 1 million barrels. oil per month, and explained

Similarly, Orekhov entered into contracts and acted as an intermediary in the supply of large volumes of PDVSA oil to China. The documents include his letter dated February 19 to a Singaporean trader: “Industry (as PDVSA was designated. -) has three ships with Boscan (a type of crude oil). One is already in Asia, and the other two will arrive there in a few days, and they offered them to me. Can we offer them [to a Chinese concern]?” Then the businessman sent a draft contract for the supply of 611.67 thousand barrels. oil, listing NDA GmbH as the seller and the Chinese company as the buyer. Two days later, on February 21, the trader replied that the Chinese were ready to accept this cargo, but it should not be mentioned that it was coming from Venezuela. In some transactions, another company attributed to Orekhov, Opus Energy, was named as the seller, and the country of origin of the oil was changed to Colombia.

According to the US Attorney's Office, Orekhov, Uss, Kuzurgasheva and their accomplices used various methods to hide the nature of the transactions that took place through the American financial system, which allowed them to conduct transactions worth tens of millions of dollars. For example, in February-April 2022, they purchased about 700 thousand barrels. fuel oil from PDVSA for about $32.95 million using front companies in Australia, China and the UK.

In documents submitted to financial institutions, the defendants also provided false information about the type of cargo being purchased in order to circumvent US sanctions. For example, in March, Orekhov, in a letter to the Venezuelan bank that conducted the transaction, indicated food instead of oil as the item being shipped. In order to hide the real meaning of the deal, the accomplices forced the oil tankers to turn off the GPS signal by which they could be tracked, and the country of departure (Venezuela) was called "Disneyland".

“UC Rusal has not bought and is not buying Venezuelan oil or any other sanctioned goods and is acting in full compliance with the requirements of international law,” the company’s press service told RBC. RBC sent a request to PDVSA.

Military technology allegations

Orekhov and his accomplices illegally bought and shipped to end users in Russia, including Radioexport, Network Technologies and Abtronics, military and secret dual-use technologies from US manufacturers and suppliers, the indictment says. These products included advanced semiconductors and microprocessors used in fighter jets, missile systems, smart munitions, radar, satellites and other space-based military systems. Components made by American companies were found on Russian military equipment seized by Ukrainian forces during a Russian special operation in Ukraine, prosecutors say.

Sergey Tulyakov and Timofey Telegin instructed other defendants to purchase these items and parts, and during the negotiations they did not disclose to American suppliers the end buyers and how they would use them. According to the prosecution, in a September 2018 letter to Orekhov, Tulyakov noted that part of the order was for the Scientific Research Institute of Precision Instruments in Moscow, which produces radio-electronic equipment and software systems for the Russian armed forces, intelligence services and the space industry. RBC sent a request to this institute.

In these cases, the Malaysian NDA Aerospace was often the formal buyer: “However, NDA Aerospace was a front organization used by accomplices to hide the role of Russian or other sanctioned organizations in these transactions.” As of June 2022, of several addresses associated with NDA Aerospace in Malaysia, only one had its sign, and the entire office consisted of an empty room in a mall. Through this company, the defendants tried to purchase parts from a major American defense contractor for Russian MiG-29 and Su-30SM2 fighter jets. But none of the proposed deals involving these components came to fruition.

Orekhov and his accomplices also told US contractors that certain goods were destined for Roskosmos and other enterprises in the Russian space program. This has been a common method of circumventing sanctions to obtain technology in "sensitive" areas because space has had less stringent U.S. oversight and regulation, U.S. prosecutors say. RBC sent a request to the press service of Roscosmos.

According to the prosecution, from February 28 to March 31, NDA GmbH shipped various American-made electronics to the Radioavtomatika company, which was included in the US sanctions list on March 3.

Uss and Orekhov also discussed in emails new Western sanctions in response to Russia's fighting. For example, on March 11, the son of the Krasnoyarsk governor wrote to his business partner: “They [the US and the European Union] are preparing four packages of sanctions. Apparently, governors will now also be included [in the sanctions lists].” On March 30, Orekhov asked him: “Have you decided to leave Russia?” To this, Uss jokingly replied: “[Do you] want to become a refugee? Well, that's too much."