Fronting for OVD: A Third Deripaska-Focused Indictment from Late September
DOJ rolled out two sanctions-related indictments targeting Russia yesterday. One, charged in Connecticut, accuses some Latvians and a Ukranian of attempting to purchase and re-export a jig grinder to “individuals in Russia.”
The indictment alleges that, beginning in 2018, Eriks Mamonovs, 33, and Vadims Ananics, 46, both citizens of Latvia who operated CNC Weld, a Latvia-based corporation, conspired with Stanislav Romanyuk, 37, a citizen of Ukraine and resident of Estonia who operated Estonia-based BY Trade OU, and others, including Janis Uzbalis, 46, of Latvia, and individuals in Russia and a Russia-based company, to violate U.S. export laws and regulations and smuggle a jig grinder that was manufactured in Connecticut to Russia. A jig grinder is a high-precision grinding machine system that does not require a license to export to European Union countries, but does require a license for export and reexport to Russia because of its potential application in nuclear proliferation and defense programs. [my emphasis]
The Latvians accused were arrested Tuesday; Ukranian Stanislav Romanyuk was arrested in Estonia on June 13. The actual indictment — described as a superseding indictment — was obtained on July 7, but is not yet publicly docketed.
The other indictment, which was charged in Brooklyn, charges five Russians — one of whom was arrested in Germany, the other in Italy, both on Monday — along with a Spaniard and a Venezuelan, for sanctions violations and money laundering.
Payment for NDA GmbH’s illicit activities was often consummated in U.S. dollars routed through U.S. financial institutions and correspondent bank accounts. To facilitate these transactions, Orekhov and his coconspirators used fictitious companies, falsified “Know Your Customer” documentation and bank accounts in high-risk jurisdictions, causing U.S. banks to process tens of millions of dollars in violation of U.S. sanctions and other criminal laws. In one conversation with Soto, Orekhov bragged that “there were no worries…this is the shittiest bank in the Emirates…they pay to everything.” The scheme also utilized bulk cash drops with couriers in Russia and Latin America, as well as cryptocurrency transfers worth millions of dollars, to effectuate these transactions and launder the proceeds.
It, too, focuses on the military aspect of the scheme — and even claims to have found components obtained through this network on the battlefield in Ukraine.
As alleged, Orekov has served as the part owner, Chief Executive Officer and Managing Director of Nord-Deutsche Industrieanlagenbau GmbH (NDA GmbH), a privately held industrial equipment and commodity trading company located in Hamburg, Germany. The other owner of NDA GmbH is Artem Uss, the son of the governor of Russia’s Krasnoyarsk Krai region. Kuzurgasheva served as the Chief Executive Officer of one of the scheme’s shell companies and worked for NDA GmbH under Orekhov. Using NDA GmbH as a front company, Orekhov and Kuzurgasheva sourced and purchased sensitive military and dual-use technologies from U.S. manufacturers, including advanced semiconductors and microprocessors used in fighter aircraft, missile systems, smart munitions, radar, satellites and other space-based military applications. These items were shipped to Russian end users, including sanctioned companies controlled by Telegin and Tulyakov, such as Radioavtomatika, Radioexport and Abtronics, that serviced Russia’s defense sector. Some of the same electronic components obtained through the criminal scheme have been found in Russian weapons platforms seized on the battlefield in Ukraine.
But there’s a significant component of the Brooklyn indictment that focuses on Oleg Deripaska and Rusal. The lead defendant, Yury Orekhov, is described as a former procurement manager for what the indictment makes clear is Deripaska and Rusal. [Note, the indictment variably transliterates his name Orekov and Orekhov; I’ll use the latter.]
OREKHOV previously worked as a procurement manager for a publicly-traded Russian aluminum company (the “Aluminum Company”) controlled by a Russian billionaire and industrialist (the “Oligarch”), an individual whose identity is known to the Grand Jury.
The identify of Rusal (and therefore Derispaska) is confirmed in a paragraph that describes the period of Rusal’s sanctions (which Reuters noted here).
On August 3, 2021, USS sent OREKHOV a draft communication to the Aluminum Company regarding business dealings with NDA GmbH. The letter began, “During the sanctions period, the Company [NDA GmbH] began to supply fuel oil for [the Aluminum Company in Guinea].” Notably, the Aluminum Company was included in the SDN List from on or about April 6, 2018 through on or about January 27, 2019.
For example, Orekhov and Artem Uss are accused of laundering money to purchase oil from Venezuela’s sanctioned PDVSA for the use of Rusal. The indictment cites communications from Orekhov to a trader Juanfe Serrano, referencing the sanctions against Deripaska.
Indeed, as reflected in numerous documents from the Aluminum Company and NDA GmbPI, the defendants YURY OREKOV and ARTEM USS repeatedly purchased oil from PDVSA, causing U.S. financial institutions to process U.S. dollar-denominated payments, and supplied it to the Aluminum Company. For example, in a March 2020 draft letter addressed to a Deputy of the State Duma (one of the chambers of Russian parliament), who was an associate of the Oligarch, NDA GmbH proposed alternate sources of supply for “[Aluminum Company] procurement,” including using a “small, aggressive trader” that “conducts high-risk transactions in the Caribbean region, including with the Venezuelan state-owned company PDVSA, which is under sanctions, [and] has excess profits due to a 40% discount on the selling price of oil.” On or about December 4, 2021, in a series of electronic communications between OREKHOV and the defendant JUAN FERNANDO SERRANO PONCE, OREKHOV wrote, “this is our mother company pasting a link to the Aluminum Company’s website and a link to the Oligarch’s Wikipedia page. OREKHOV stated, “He [the Oligarch] is under sanctions as well. That’s why we [are] acting from this company [NDA GmbH]. As fronting.” SERRANO responded, “My partner also haha … he is very close to the government. He is one of the influence people in Venezuela. Super close to the Vice President.” SERRANO pasted a link showing search results for a Venezuelan lawyer and businessman who was currently wanted by U.S. authorities for bribery and money laundering, an individual whose identity is known to the Grand Jury. Later, in a series of communications between OREKHOV and SERRANO in or about March 2022, OREKHOV sought a “term contract with [PDVSA]” for “1 million [barrels of oil] per month,” and clarified that, “with [the Aluminum Company] it’s an annual contract, every month, every month … this is stable for sure.” [my emphasis]
As described, the smuggling involved spans Germany, Venezuela, Dubai, Malaysia, Panama, China, and Australia, among other countries. Seven US companies are identified. In addition, there’s an Individual 1 tied to a “California-based consulting and logistics company” who met with Orekhov in Europe in 2019.
The entire indictment — and the timeline laid out in the conspiracy part — almost feels like two indictments: one that spans 2018 through January 2020 (when Bill Barr was trying to shut down inconvenient investigations) and a second one that restarted after Russia’s Ukraine invasion.
In two different paragraphs pages apart, the indictment describes a conversation that Uss and Orekhov had on March 30 of this year, after the expanded invasion of Ukraine started. While much of the context seems left out, it seems that Orekhov was getting cold feet on Russia.
28. On March 30, 2022, the defendant YURY OREKHOV asked the defendant ARTEM USS, “Have you decided to leave Russia?” USS joked in response, “[Y]ou want to be an international fugitive? It’s too much.” OREKHOV replied, “[A]nd you? Would you like to? 1 can arrange, very easy.”
37. In a March 30, 2022 message exchange between the defendants YURY OREKHOV and ARTEM USS regarding NDA GmbH’s business with the Aluminum Company, USS wrote to OREKHOV, “[I]f you’re serious … I will meet with [the Oligarch’s initials] when 1 return to Moscow . . . and I will convey to him personally your desire to pay off all debt… if you don’t want to work with Russia now and it’s really toxic, then don’t work. I will follow this closely.”
That’s the kind of person who might be willing to make a deal.
As I said above, this is the third indictment of Deripaska-linked figures obtained in late September. The timeline looks like this:
September 21: Deripaska property manager Graham Bonham-Carter indicted in SDNY
September 26: Orekhov et al indicted in EDNY
September 28: Superseding indictment obtained against Olga Shriki, Deripaska, and others
September 29: Deripaska’s US-based associate Shriki arrested
October 11: Bonham-Carter arrested in the UK
October 17: Yury Orekhov and Artem Uss arrested in Germany and Italy, respectively
In less than a month, then, DOJ has charged Deripaska, both a US and UK based manager, and someone involved in illicit procurement for Deripaska and the Russian government, with arrests of those three key associates.
The announcements for all three describe the involvement in National Security Division’s Counterintelligence and Export Control Section — the spying section (the Connecticut announcement lists an NSD trial attorney, but it’s unclear whether he is specifically in the CECS section). The Orekhov indictment even describes that a CECS prosecutor will play a part in the prosecution. That implies DOJ’s interest goes beyond just sanctions violations.
It’s fairly impressive work and no doubt unbelievably complicated coordination, given all the other countries involved. But it feels like there might be a few more things in the work. As noted, while the indictment charging Deripaska personally moves for forfeiture of Deripaska’s three US-based properties, Shriki is not described as the primary person running those properties.
Oleg is a trip. Manafort must not be sleeping much. Imagine the stories Oleg can tell.
Proffer he could offer just needs to jive with every intelligence agency involved.
He has the Repubs in ” checkmate” ….he has a get out of jail card to play. Also gives Putin an exit strategy …. imho . 2016 Election was fixed.
No wonder Putin swung at the Ukrainian pitch, he has nothing to loose.
Not “fairly impressive work” but “damned impressive work,” and “unbelievably complicated” is an understatement.
Look at the landscape in those countries involved with this. Germany is dealing with trying to prepare for winter without Russian energy supplies, which is straining all kinds of political alliances among the government as they look at issues they thought were mostly decided-and-done-with, like closing coal-burning power plants and moving away from nuclear power. On Sept 25th, Italy elected a new far right prime minister. On Sept 6, the Tories in the UK replaced Boris Johnson with Liz Truss, just two days before the death of Elizabeth II, and once the UK got past mourning its late monarch, Truss has managed to upend Parliament, her Tory colleagues, the financial markets, the NHS, the relationships with the devolved governments in Scotland/N. Ireland/Wales, and damn near everything else, resulting in the inevitable announcement of her resignation this morning.
To have accomplished the kind of cooperation necessary for these indictments and arrests is indeed damned impressive and beyond unbelievably complicated. Working to support Garland and the DOJ, current CIA Director and former career Foreign Service Officer (including, by the way, a stint as the US Ambassador to Russia) Bill Burns had to have been very very busy over the last couple of months between his old State Dept connections and his current Intelligence community counterparts abroad.
To me, this is a sign that the work of rebuilding trust abroad in the US diplomatic corps, the US intelligence community, and the US government more generally is very much moving in the right direction.
“Not “fairly impressive work” but “damned impressive work,” and “unbelievably complicated” is an understatement”
When I heard that Latvians had been charged for helping Russians, I was surprised. Latvians are fed a steady diet of hating Russians from birth to adulthood. So I researched their last names. Mamonov is a Russian last name, Ananics is Jewish.
So from a Latvian perspective, they are Latvian born Russians. . . because old ethnocentric prejudices die hard.
Despite the obvious concerns, which I share, about the UK, it is important to recognise that outside of the politicians and some financiers the legislature and the administration below the highest level is still more separate than in the USA, despite the efforts of assorted right wing politicians and advisors to diminish this separation. So the UK is still functioning pretty normally and something like this sounds to be would move fairly smoothly through the professionals in the system whoever was pretending to be in control in Westminster. I cannot speak for Germany but it would not surprise me if that were to be the case there as well.
The extradition in UK would be most likely to be challenged bc of his influence, not the law.
On the other hand, I was wondering, reading the Orekhov indictment, whether Italy and Germany needed a tie to the Ukraine war to bite.
I don’t know that the tie was needed, but it certainly would help.
I genuinely do not know what you mean. I doubt Bonham Carter has much influence at all. And there is fairly wide support for Ukraine across the political spectrum. Extradition based in a charge which referenced Ukraine in any way would probably not be much opposed.
But while we are on about British justice, Ann Secoulas has today pleaded guilty online to the offence of killing Harry Dunn through careless driving. The judge has required she attend personally for sentencing next month and said her attendance would demonstrate genuine remorse. I doubt that will happen. If it does not it ought to affect her sentencing.
No, the judge didn’t require her to attend the sentencing — today’s plea was done via video, and Sacoolas did so from the US. From The Guardian:
IOW, the judge is saying, “If you show up, that would lead me to consider a lesser sentence, but I can’t order you to show up or even to turn yourself into custody once sentence is passed.”
I doubt she is going anywhere. Though your analysis is probably right.
Sorry I used the wrong term and that I spelled her name wrong. Otherwise we agree I think. And I agree she is not going to submit to justice.
I was suggesting the Ukrainian tie might ease things in Germany and Italy.
I agree with that.
Could some investigative artifact explain the variant spellings of Orek[h]ov? They do seem to tie to particular documents (Paras. 36 & 45), but it’s even spelled differently in those paragraphs of the EDNY indictmet. The flyspecking of high-profile case filings ought to’ve eliminated such typos, so I think time pressure must have won out.
Transliteration of Russian letter X is different in different orthographies based on host language. We hear it as like the ch in Bach, other languages may see that glottal voiced fricative and in host language it may be K that covers that sound. In English K is a glottal stop. Hints at conservation of source reporting conserved in reportage? German source or Baltic?
Oh, please, please tell me Moscow Mitch McConnell is an unindicted co-conspirator soon to be named and indicted!
Just kidding, kind of, sort of.
On this he’s just a loser.
Andy Beshear got Kentucky’s $15 million back recently, too.
Now if only Matt Bevin was indicted! And not just on the fraudulent aluminum plant.
You lose some, and some win a lifetime appointment…https://www.tulanelink.com/tulanelink/WendyVitter_box.htm
How to Become a Judge, Part 6 – continued
“In the byzantine world of Washington politics, former Senator David Vitter (R, Louisiana), a paid lobbyist representing the Russian energy group EN+, helped to remove sanctions that allowed an EN+ subsidiary, the Russian aluminum company Rusal, to invest $200 million in a planned aluminum plant in Ashland, Kentucky. Vitter conveyed this favorable news to Senate majority leader Mitch McConnell (R, Kentucky) prior to the judicial confirmation hearings of Wendy Vitter, his wife. Not surprisingly, she was subsequently confirmed on May 16, 2019 by the U.S. Senate to become a federal judge for the Eastern District of Louisiana. Her qualifications have been strongly disputed…”
Also impressive: your work laying out this (also) complicated situation, Dr. Wheeler. Reading your post felt like watching a movie scene, it was laid out with such clarity.
The March 2020 date of that draft letter between conspirators jumped out at me. They seemed especially brazen then, as if they were operating on the presumption that they could pursue the scheme unscrutinized. Barr’s actions and inactions probably fostered that sense, as you point out, but I wonder if Deripaska or one of his subordinates communicated something to that effect: In these 2020 United States, you will be protected.
I really hope an arresting officer on this case gets to tell the alleged perpetrator, “Mamonovs, Your jig is up!”
I worked in correspondent banking in NYC in the run-up to Y2K. The overwhelming plurality of Cobol programmers were Russian or Ukrainian born.
Andrew Weissmann really is a dope. That is all.
I saw on a tik tok live tonight. A white male twenty something, proud american trump supporter, explaining how communism has gotten a bad rap. How it’s been demonized by the left for so many years (ironic af) that most people don’t understand what it is. Young people eating up this new angle. This kid was making headway and had the ears of all the others as he explained that the fear of communism is irrational. This guy was using a technique, talking like a kid, but making a nuanced pitch that communism is good, strong, decisive when democrats and democracy is weak. That Putin is strong and has done so much for Americans.
I froze. In my whole life I never heard a pitch like that “for” communism by anybody with an american accent. I’ve heard attacks on democracy but this was different and felt shocking to me. Trumps lies are out so he must deflect. That’s what a malignant narcissist must do. He has to change the whole narrative.
He will say the following: Yes he’s been working with Putin. Of course I was. I am a genius. Ukrainians evil. Now his only option is to promote communism and Putin so hard that he creates a narrative that makes his behavior plausibly positive, thereby inoculating himself from the truth. They are in love with his personality so they rational his principles to stay with him. He forces them to take stances not related to truth and then they are trapped. The only way out of this perception is to admit to be fooled and going against their own values. These are people who do not have the ego strength to admit they made a mistake. They share this quality with trump. He’s already planted these seeds.
I am struggling to see how Merrick Garland, with all these facts and logic, will over power the emotional themes emerging from the trump camps. It’s narcissistic and predictable. It will not die down and may even swell as trump sits in a jail cell one day. This energy is beyond trump. It’s a fire that’s not going to be put out by hard cold facts. We know this already. We see this. Money can be made by manipulating huge quantities of people. It’s been a cash cow.
Jan 6th was a coup to take over the United States of America by DJT. It’s not generating energy enough to over ride the support for trump. There is real brainwashing happening. Real power and control. It works. It’s working. It’s holding the line for trump. And some of that power, that bravado- that needs no truth- might be linked to other power sources funded outside this country.
I want to yell “wake up America!!! You may have broken up with your abuser and married a new one that is gentle and kind and strives for truth (even if he misses it on occasion). But the abuser is not going to leave us alone. In fact he’s part of a gang and they are coming after you. It happens every day in America. Just issued a report that pregnant women have higher risk of dying from DV than any other cause.
The reality is the abuser is still stalking us despite the fact that we have tried to move on. He is threatening us, harassing us, calling us names, trying to isolate us, and minimizing and denying every thing he’s done. He is disempowering our system. It’s an invalidating environment. Causes confusion, dilutes the truth. And bends the truth until you lose sight of what is real.
Is it an exaggeration to say that 20-40% of our population are so mentally ill that they cannot discern the difference between a fact, a thought or a feeling? What ever the solution, the underlying causes of the damage must be reckoned with. For truths sake.
The right saying they won’t support Ukraine. Communism is good. Power is best. Simple themes that evoke emotion no facts required. No facts required. That means that facts can’t fight this fire. All our reasoning. All our analysis will not stop this. We need to truly understand what is happening. Perceptions are being twisted. I’ve been a dv counselor holding the abused hand and knowing she will go back and be beaten on average of 7 times before she leaves. I just don’t think we understand the monster we are fighting. And I know we need to dig up the truth. I know the light matters but honestly we are going to need care and kindness and support if we are ever going to turn this tide. The love of the counselor pales in comparison for the inner need to have the acceptance of the abuser. . It’s gross. It’s implausible but this must somehow be addressed.
It is power and control in peak form on a national level. It’s working. But it’s way too formidable in that, how will truth set us free if truth doesn’t matter? If only power matters?
The facts come in at the end but the shock is gone. The energy stolen. This is how power and control works.
It freezes people with fear and shame. The rhetoric has strengthened. And strengthened.
It’s like a language or river current outside of English that all humans share and recognize. Humans can be brain washed and manipulated by power and control. It’s happening. It’s not magic but it’s powerful because speaking to the emotional minded traumatized brain will be effective in changing hearts and minds.
If you’ve ever experienced domestic violence or been beaten as a child, you may know this feeling. It’s happening to us. Our country is being gas lit on a massive scale. It’s stressful and makes you feel crazy. None of the normal systems work to contain it. I worked DV for 12 years. I’d feel better if I felt our strategies understood the underlying mental health components of this situation.
Instead of talking politics we need to be talking denial. For the first time in my life I fear that the truth has been rendered suspect and that it has no power with such a large percentage of the people. The brainwashing is much more powerful than war. And remember who is most susceptible to power and control? The military and para military forces train using power and control. The abused have been trained by power and control. Slavery means many black people’s families spent centuries controlled by it. All American Indians have been oppressed by it. Many white people grew up in families who used it against slaves and each other. It’s rampant.
Sorry for my rant. The facts feel good. Truth helps. But I think we need s strategy that understand and accepts this idea. We as a nation are vulnerable because of our long history of power and control. How do we safely deprogram so many people? What did Germany do? After Hitler? How long did it take? What worked?
It’s funny how the pro-communism types never argue how great the People’s Republic of China is, where everyone is tracked all the time, required to maintain “social credit” to participate in society, and during the epidemic required to live in complete lockdowns as dictated by the central government in accordance with PRC’s Zero Covid policy.
But they’re not really arguing for communism, they’re arguing for an authoritarian state whose leadership looks like them and benefits them. I won’t link to it but The Federalist decloaked yesterday publishing a manifesto of sorts insisting they rid themselves of the “conservative” label and embrace fascist authoritarianism.
In short, they’re making it easy for us to point to the new Nazi Party.
Rayne, your and Peacerme’s posts touch on our chat regarding the newer forms of social media being used to deliver propaganda.
Yup. I was thinking of you when I recently made reference to the “Firehose of Falsehood” as well. Seems to be a critically important topic right now, ahead of the mid-terms and in light of the information warfare about Ukraine.