Charges brought over sale of nuclear technology to Russia

The U.S. Attorney's Office in Massachusetts announced criminal charges this week against two men for allegedly smuggling and conspiring to violate export controls relating to the sale of laser equipment to the Russian nuclear industry.

Sam Bhambhani, 55, of North Attleboro, Mass., and Maxim Teslenko, 35, of Moscow, Russia, were each indicted on one count of smuggling and one count of conspiracy to violate and evade export controls, commit smuggling, and defraud the United States. Bhambhani was arrested on September 9 and released on conditions following an initial appearance in federal court in Boston. Teslenko remains at large overseas.

Export controls are laws and regulations that govern the shipment, transmission, or transfer of sensitive equipment, information, and software from the United States to foreign countries, persons or entities. These are in place to protect national security and foreign policy interests.

Quotable: "This case underscores our unwavering commitment to enforcing U.S. export laws and safeguarding national security," said acting U.S. attorney Joshua S. Levy. "The defendants are alleged to have engaged in a sophisticated scheme to evade export controls, deceiving the government about the true destination of sensitive technology and putting critical national interests at risk. We will continue to work tirelessly with our federal partners to keep our country's most sensitive technologies out of the world's most dangerous hands."

The charges: Investigators say Bhambhani and Teslenko conspired from at least 2015 to 2021 to evade export control laws to send laser welding machines to Russia and falsified the end user of the equipment. The two men communicated via email and the encrypted messaging tool WhatsApp.

Bhambhani was a salesman for a U.S.-based global supplier of laser supplies for welding, marking, cutting, deep engraving, and motion systems, with facilities in Rhode Island and Florida. Teslenko, a Russian Federation citizen, operated various businesses and acted as reseller to the Russian government.

According to charging documents, the pair conspired to evade export control laws to sell equipment to Ural Electromechanical Plant (UEMZ), in Yekaterinburg, Russia, where it operates as a subsidiary of Rosatom, the state-owned corporation that specializes in nuclear energy and oversees the nation's nuclear weapons complex.

As part of the conspiracy, a fake person named Leo Hill was created to serve as a middleman to get reseller discounts from the U.S. company and then sell to UEMZ at full price, officials said.

In their words: According to the indictment, Bhambhani wrote in a February 2015 email: "I have given you total exclusivity and you have to trust me that I don't have the intention of working with anyone else. Only I can authorize which agent sells in which countries and we normally don't sign any contracts as our handshake agreement is more important."

However, Bhambhani was not head of the company and was not authorized to grant reseller status.

In April 2015, Telenko informed Bhambhani via email that UEMZ/Rosatom had been the customer for laser welding machines shipped in February. Later that year, Teslenko told Bhambhani that his "government customers" wanted at least six more machines. Those machines were exported in 2017 with a false destination in Latvia, listed as "ABX SIA, Urikstes [sic] 4, Riga, 1005, LV."

A 2018 email conversation about clearing regulatory hurdles needed for the equipment purchase included the following exchange:

• Bhambhani: The government has strict export controls and they need complete information on the end user along with details of what they will use the machine for before they will even give priecs [sic]. I told that I would try to get this information. Approximately, the machine is $1.5 mil.
  Please let me know if we can get all the details from the customer and then we can see. Sorry I wish I was giving you better news.
• Teslenko: But the main question is: could they sell it to Russia to nonmilitary end using or not? Unfortunately, now its [sic] not so good relationships between our countries. That's why we afraid.
• Bhambhani: Max, they can sell to Russia, but really need to know the specific application and have to qualify the industry of customer and what exact parts they will be making?

Following this exchange, in January 2020, parts of a laser welding machine were exported-falsely listing LANIA, located in the British Virgin Islands, even though the shipment was intended for UEMZ, according to the indictment.

"We will find a way": In early 2020, Bhambhani communicated with Teslenko about the purchase of two more laser welding machines, saying that even though there were many export controls, "we will find a way."

That September, Bhambhani wrote to Teslenko: "We will have to figure out the shipment and invoicing as now there are too many controls put on export to Russia. Politics! Anyways will write as I have more info and we'll figure it out."

Bhambhani went on to ask Teslenko if he had another company account anywhere in Europe, the United States, or Canada. "Too many controls by export department and they are checking everything," Bhambhani later added. Teslenko gave the name of Estonia-based Torvard as new company information to use.

Bhambhani asked that the purchase money come from Tovard because "then no one will question anything." He then directed the shipment to Torvard in July 2021 and told Teslenko not to "say anything about . . . Russia . . . . Hope no one questions it."

Shortly before the shipment went out in late 2021, the freight forwarder was instructed to change the ultimate consignee from Torvard to an address in Moscow, after which UEMZ received the laser welding machine.

Investigators say: "These two men are accused of helping Russia illegally acquire cutting-edge, American-made laser welding machines in support of this hostile nation state's nuclear program. As part of their shameful efforts to evade our country's export laws, we believe these men utilized shell companies, fictitious personas and falsified records," said Jodi Cohen, special agent in charge of the Federal Bureau of Investigation, Boston Division. "This is yet another flagrant example of Russia using illicit procurement networks to advance their goals to the detriment of our country's national security. Let this case serve as a warning to others that if you violate U.S. export controls or evade U.S. sanctions, the FBI and our partners will find you and ensure that you are brought to justice."

Aaron Tambrini, acting special agent in charge with the U.S. Department of Commerce's Office of Export Enforcement, Boston Field Office, applauded the multiyear investigation and cooperation among law enforcement agencies.

"Bhambhani and Teslenko allegedly conspired to smuggle sensitive machinery into Russia to enhance Russian nuclear capabilities. They're alleged to have willfully violated export controls specifically intended to protect the security of our nation and to keep dangerous technology out of the hands of adversarial regimes," said Michael J. Krol, special agent in charge of Homeland Security Investigations in New England.

What's next? The smuggling charge carries a sentence of up to 10 years in prison, and the conspiracy charge carries a sentence of up to five years in prison. Each charge carries with it fines of up to $250,000.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.