US arrests businessman for illegal exports to Russia

Semiconductor shipments to a sanctioned company

The US has apprehended and charged a man in connection with unlawfully exporting sensitive technology, including semiconductors, to a blacklisted Russian company with links to military and intelligence agencies.

Court documents filed at the US District Court for the Eastern District of New York showed the charges against Ilya Kahn, a 66-year-old citizen of the US, Israel and Russia.

Residing in Brooklyn, New York and Los Angeles, Kahn is accused of participating in a prolonged scheme to acquire and unlawfully export sensitive technology from the US on behalf of a Russian semiconductor company closely associated with the Russian government.

The US Commerce Department added the recipient company, Joint Stock Company Research and Development Center ELVEES (Elvees), to its Entity List in March 2022. The Treasury Department subsequently sanctioned it in September 2022 for supporting Russia's military actions, including the invasion of Ukraine.

Kahn, allegedly the owner of Senesys Incorporated in California and Sensor Design Association, with an address in Brooklyn, is said to have engaged in security software development and the testing of silicon wafers for military avionics and space applications through these companies.

Sensitive electronic devices

The complaint says Kahn used his businesses to acquire sensitive electronic devices in the US and shipped them to Elvees without obtaining the required licenses. The items included various microcontrollers, US-made network interface controllers and a radio-frequency transmitter. Each of these items required an export license from the Commerce Department, which Kahn is accused of failing to obtain.

The exact types of microcontrollers and other devices were not disclosed in the complaint.

The charges also assert that Kahn facilitated the continued supply of semiconductors from a Taiwanese manufacturer to Elvees after Russia's invasion of Ukraine in February 2022. The Taiwanese manufacturer had initially halted shipments to Russia. Kahn is accused of orchestrating the rerouting of the chips through the US, then re-exporting them to Russia via a shipping company based at John F. Kennedy International Airport.

Kahn is also accused of emailing design guidance for an Elvees-branded microchip to a Taiwanese manufacturer in May 2022. Thousands of units of this microchip were then exported, passing through a Hong Kong shipping company before reaching a company in mainland China. Kahn reportedly informed the Hong Kong shipping company about the involvement of a "call from Russia" regarding the Chinese business receiving the goods.

The FBI and the Department of Commerce's Bureau of Industry and Security (BIS) are leading the investigation, with assistance from the US Attorney's Office for the Central District of California.

If convicted, Kahn could face a maximum sentence of 20 years in prison for conspiracy to violate the Export Control Reform Act (ECRA). His initial court appearance is expected to take place in the Central District of California, though the date remains undisclosed.