Justice Department Announces First Criminal Cases from Multi-Agency Disruptive Technology Strike Force
The Justice Department has made it clear that it intends to prioritize criminal prosecution of national security cases to prevent hostile nation-states from illegally acquiring sensitive U.S technology. To this end, DOJ created the Disruptive Technology Strike Force (“DTSF”), which is led by both DOJ and the Department of Commerce to disrupt illegal procurement networks.
The DTSF reflects DOJ’s hyper-focus on national security crimes, including cybersecurity, sanctions and export controls. DOJ has added over 20 new prosecutors to the National Security Division and has assigned them with this initiative and to increase corporate prosecutions of violators.
As an initial splash, DOJ announced the unsealing of charges in five cases for violations of export controls, smuggling and theft of trade secrets.
Two of the cases involve the disruption of illegal procurement networks connected to Russian military and intelligence services. Two of the other cases charge former software engineers with stealing software and hardware source code from U.S. tech companies to benefit Chinese competitors. The fifth case involves a Chinese procurement network to send Iran materials used in weapons of mass destruction (“WMDs”) and ballistic missiles.
United States v. Bogonikolos, Eastern District of New York: A criminal complaint charged Dr. Nikolaos “Nikos” Bogonikolos of Athens, Greece, with wire fraud and smuggling in federal court in Brooklyn. The defendant and his company served as a NATO defense contractor but secretly assisted Russia’s war effort by smuggling U.S.-origin military and dual-use technologies. Since 2017, the defendant and his company delivered advanced electronics and sophisticated testing equipment used in military applications, including quantum cryptography and nuclear weapons testing.
United States v. Besedin and Patsulya, District of Arizona: On May 11, 2023, two Russian nationals, Oleg Sergeyevich Patsulya and Vasillia Sergeyevich Besedin were arrested in Arizona and charged with conspiracy to violate the Export Control Reform Act and conspiracy to commit international money laundering. Besedin and Patsulya both reside in Miami, Florida, and evaded export laws and regulations to send aircraft parts to Russian airline companies. The defendants used intermediary companies and foreign bank accounts in third-party countries to disguise the true identity of the customers. The defendants approached aircraft company parts suppliers, lied about the identity of the customers and the eventual destination of the parts.
United States v. Li, Central District of California: A California man was arrested on May 6, 2023, in the Central District of California on theft of sensitive technologies from his employers and marketing the technologies to competing businesses in China. The software programs are related to high precision measurement studies and point cloud technology, which can be used to manufacture parts for nuclear submarines and military aircraft.
United States v. Wang, Northn District of California: A former Apple employee, Weibao Wang, was charged with theft and attempted theft of trade secrets arising from his scheme to access, download and steal Apple technology related to autonomous systems. Wang was first hired by Apple in 2016 and assigned to work on development of hardware and software for autonomous systems, which can be used for a variety of systems, including self-driving cars. One year later, Wang announced he was resigning his position. In the days leading up to his departure, Wang downloaded and stole large amounts of data taken from Apple.
United States v. Xiangjiang Ojao, Southern District of New York: A federal court in the Southern District of New York charged Xiangjiang Ojao with sanctions evasion, money laundering and bank fraud based on his participation in a scheme to use a sanctions Chinese company to provide materials to Iran to produce WMDs. As alleged, Ojao is part of a network of Chinese companies involved in the proliferation of WMDs. Ojao was an employee of two companies previously designated by OFAC as SDNs, and between March 2019 and 2022, he took steps to supply isostatic graphite to Iran for the production of WMDs. To conceal the involvement of prohibited SDN companies, Ojao created a bank account in the name of a front company to receive transfers from a U.S. bank as part of his efforts to circumvent U.S. sanctions.