U.S. National Pleads Guilty in Scheme to Illegally Export Technology to Russia
Ilya Khan, a 66-year-old U.S., Israeli, and Russian national, admitted to conspiring to violate export regulations by unlawfully exporting semiconductors and other sensitive technologies to Russia. The technology was destined for Joint Stock Company Research and Development Center ELVEES (Elvees) and other Russian entities. Elvees, a prominent developer of microchips in Russia, was sanctioned by the U.S. in 2022 due to its contributions to Russia’s security services and military sectors. Khan also confessed to attempting tax evasion by failing to pay taxes on his illicit income.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division stated, “Today’s guilty plea is another step towards stopping the illicit flow of technology to support the Russian war machine.” He emphasized the department’s commitment to preventing illegal exports of sensitive electronics.
Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Department of Commerce highlighted the efforts of U.S. law enforcement in thwarting Khan’s scheme. Axelrod remarked that the Department of Commerce, along with its partners, remains focused on disrupting networks that support Russia’s military technology acquisition.
FBI Executive Assistant Director Robert Wells pointed out the threats posed by illegal exports to U.S. security, stressing the FBI’s dedication to safeguarding the nation from such activities. U.S. Attorney Breon Peace for the Eastern District of New York noted the significance of the plea in protecting national security and holding violators accountable.
Chief Guy Ficco of IRS Criminal Investigation underscored the threat Khan’s activities posed to national and financial security, citing his failure to report and pay taxes on his earnings. The IRS aims to prioritize uncovering financial crimes that threaten stability.
Khan owned Senesys Incorporated and Sensor Design Association, which operated as fronts for acquiring and exporting dual-use electronics to Russia. These items required export licenses for national security reasons, which Khan did not obtain.
Despite sanctions, Khan facilitated continued semiconductor fabrication and importation for Elvees after Russia’s 2022 invasion of Ukraine. The semiconductors are used in various military applications, including communication systems and drones. Khan utilized a network of front companies and bank accounts to ship these semiconductors to Russia via China and other countries.
In March 2022, the Commerce Department added Elvees to the Entity List, requiring licenses for exports to Elvees, which were likely to be denied. Nonetheless, Khan continued collaborating with Elvees, sending microchips to a Hong Kong shipping company and subsequently to mainland China. His communications revealed connections to Russian businesses.
Khan’s activities with Elvees date back to at least 2012, with accounts under his control receiving over $50 million from Elvees and related entities through 2022. He misappropriated nearly $5 million for himself without reporting or paying taxes on it. As part of his plea, Khan agreed to forfeit $4,923,548.94 and pay $1,892,816.00 in restitution to the IRS.
Khan faces a potential 20-year prison sentence. The FBI Los Angeles Field Office conducted the investigation, with prosecution led by Assistant U.S. Attorneys Artie McConnell and Matthew Skurnik of the Eastern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section. The U.S. Attorney’s Office for the Central District of California also assisted.
The actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and Task Force KleptoCapture, initiatives focused on enforcing sanctions and preventing critical technology acquisition by hostile nations.
