Patricia Hurtado, Bloomberg News

NEW YORK
EnergiesNet.com 10 20 2022

Two Russian nationals were arrested and several other individuals charged with evading sanctions to smuggle US military technology, some of which was used in Ukraine, and Venezuelan oil.

Yury Orekhov, co-owner and chief executive officer of Hamburg-based Nord-Deutsche Industrieanlagenbau (NDA) GmbH, and Artem Uss, the other co-owner of NDA, were among five Russian nationals and two Venezuelan oil traders charged in an indictment unsealed Wednesday in federal court in Brooklyn, New York. The two were arrested in Germany and Italy on Monday.

According to indictment, many of the illegal oil transactions were with a Russian aluminum company controlled by a billionaire oligarch for whom Orekhov previously worked as a procurement manager. A person familiar with the matter said the company was Rusal, now part of EN+ Group International, in which Oleg Deripaska is the largest shareholder. 

“As alleged, the defendants were criminal enablers for oligarchs, orchestrating a complex scheme to unlawfully obtain US military technology and Venezuelan sanctioned oil through a myriad of transactions involving shell companies and cryptocurrency,” Brooklyn US Attorney Breon Peace said in a statement. “Their efforts undermined security, economic stability and rule of law around the world.”

The US alleges Orekhov and Uss used NDA as a front to purchase sensitive military and dual-use technologies from US manufacturers, including advanced semiconductors and microprocessors used in fighter aircraft, missile systems, smart munitions, satellites and other military applications. According to the US, the items were then shipped to Russia, and some of the same technology was found in Russian weapons seized in Ukraine.

‘Disneyland’

Orekhov and Uss also allegedly used NDA to smuggle hundreds of millions of barrels of oil from Venezuela to Russian and Chinese purchasers, including Rusal and the world’s largest oil refining, gas and petrochemical conglomerate based in Beijing. The two Venezuelans charged in the case allegedly brokered deals for the oil between NDA and Petróleos de Venezuela SA, the state-owned oil company, using shell companies to disguise the transactions. 

Venezuelan oil was targeted for US sanctions in 2019, cutting it off from many American and European refineries. Venezuela responded by boosting sales to China, but the government of President Nicolas Maduro faced the challenge of avoiding possible US seizure during the 50-day tanker journeys to Asia. 

PDVSA has in some cases disguised the origin of its oil by faking ship documents and painting over the vessels’ names. According to the indictment unsealed on Wednesday, Orekhov was advised that tankers leaving Venezuela would turn off their GPS trackers in international waters to disguise the ship’s stop in the country they code-named “Disneyland.”

In a communication with one of the Venezuelan traders named in the indictment, Orekhov allegedly admitted that he was acting on behalf of a sanctioned Russian oligarch, saying “He is under sanctions as well. That’s why we [are] acting from this company [NDA GmbH]. As fronting.”

Deripaska, who was sanctioned in 2018 over Russian actions in Ukraine, was indicted by US prosecutors last month due to his attempts to have two of his children born in Los Angeles. The oligarch’s UK property manager was also charged last week with helping his boss violate US sanctions.

The case is US v. Orekhov, 22-cr-434, US District Court, Eastern District of New York (Brooklyn).

–With assistance from Lucia Kassai.

bloomberg.com 10 19 2022