Before US sanctions violations arrest, Russian businessman faced charges in Hong Kong

When the U.S. Department of Treasury imposed sanctions connected 3 companies belonging to Denis Postovoy connected Wednesday, it was yet different determination to interruption up what U.S. authorities accidental was an planetary strategy to interruption sanctions.

A period earlier, connected September 16, instrumentality enforcement officials arrested the 44-year-old Russian nationalist successful Sarasota, Florida.

He was charged with conspiring to interruption sanctions connected Russia, perpetrate smuggling, perpetrate wealth laundering and defraud the United States.

According to the indictment, Postovoy utilized an planetary web of companies to export dual-use microelectronic components from the United States to Russia –– perchance spare parts for subject drones utilized successful the Kremlin’s warfare against Ukraine.

Postovoy is not the archetypal Russian charged with violating U.S. export controls. But helium is 1 of the fewer who allegedly did it from wrong the United States.

Using tribunal documents and open-source information, VOA pieced unneurotic Postovoy’s history, revealing a communicative involving planetary trade, transgression charges successful 2 countries, a U.S. startup and Florida existent estate.

Postovoy pleaded not blameworthy to each the charges. If convicted, helium could look decades successful prison.

Postovoy is successful pretrial detention and could not beryllium reached for comment. His lawyer did not respond to a VOA petition for comment. When VOA reached Postovoy’s woman by phone, she hung up. She did not respond to questions sent to her connected the WhatsApp messenger app.

According to the latest tribunal filings, Postovoy’s lawsuit was transferred to the U.S. District Court successful Washington.

American charges

After Moscow launched its full-scale penetration of Ukraine connected Feb. 24, 2022, the U.S. importantly expanded restrictions connected the export of microelectronics to Russia.

The Department of Justice has accused Postovoy and respective unnamed co-conspirators of utilizing a web of companies nether their power successful Hong Kong, Switzerland and Russia to interruption those sanctions.

It claims Postovoy misrepresented the buyers and destinations of the goods, routing them done Hong Kong, Switzerland, Turkey and Estonia.

“As alleged, helium lied astir the last destination for the exertion helium was shipping and utilized intermediary destinations to disguise this amerciable activity,” U.S. Attorney Matthew M. Graves stated successful a property release. “Fortunately, our skilled instrumentality enforcement partners astatine HSI [Homeland Security Investigations] and our dedicated attorneys unraveled the plot.”

The prosecution states that Postovoy’s clients included the Russian institution Streloi Ekommerts and different unnamed firms. According to the indictment, the declaration with Streloi was completed earlier the institution was added to the U.S. sanctions database successful December 2023.

An probe by Radio Free Europe/Radio Liberty recovered that Streloi actively helps Russia circumvent Western export restrictions.

Another recipient of the microelectronics, according to an invoice included successful the lawsuit materials, was the Russian exertion institution Radius Avtomatika.

Neither institution responded to emailed questions from VOA.

It is unclear whether the microelectronics Postovoy allegedly exported were yet utilized successful drones, but 1 tribunal papers states that the radical helium contacted were members of Russia’s military-industrial complex.

Hong Kong story

Originally from Novosibirsk, Russia, Postovoy had lived successful Hong Kong since astatine slightest 2010 with his woman — a Ukrainian national from Crimea — and their 3 children.

Shipping records bespeak his companies were progressive successful exporting goods from Hong Kong, a peculiar administrative portion of China, to Russia. Prosecutors allege that aft the U.S. expanded its sanctions, immoderate of this enactment became illegal.

When the DOJ announced Postovoy’s arrest, it besides listed the names of his companies that it said were progressive successful the alleged scheme. Aside from the Russian-registered steadfast Vektor Group, each the others were successful Hong Kong: Jove HK Limited, JST Group Hong Kong and WowCube HK Limited.

All are present nether U.S. sanctions, but for WowCube HK Limited.

Its quality successful the indictment provoked a accelerated effect from Cubios, different institution antecedently associated with Postovoy. It produces the WOWCube gaming console, wich looks similar a Rubik’s cube with aggregate screens.

Just a time aft Postovoy's apprehension was announced, Cubios publically denied immoderate transportation to WowCube HK Limited.

"Neither Cubios nor immoderate of its officers, directors, managers oregon employees ... person immoderate transportation to the HK Entity whatsoever. We bash not own, run oregon are successful immoderate mode affiliated with the HK Entity,” the institution said successful a connection connected its website.

The startup besides said that Postovoy "falsely listed himself arsenic a VP of the Company” connected LinkedIn.

In fact, Postovoy was antecedently Cubios’ vice president for production, according to archived versions of its website.

Ilya Osipov, CEO of Cubios, told VOA that a communal person introduced him to Postovoy.

"I was looking for idiosyncratic who could assistance with accumulation successful China — they gave maine Denis," helium wrote successful a connection to VOA.

According to Osipov, Postovoy became a concern spouse and made important contributions to prototypes and trial batches of the WOWCube. Later the institution decreased practice with him.

Although Postovoy did not person an authoritative position, Cubios allowed him to telephone himself the vice president of accumulation "for concern purposes," Osipov told VOA.

He claimed that Postovoy founded the Hong Kong steadfast without Cubios’ permission. It was planned to go a distributor of the consoles successful Asia, but that ne'er happened, Osipov said.

Coming to America

In 2022, Postovoy and his household moved to Sarasota, Florida, wherever Cubios' office is.

According to Osipov, Postovoy said the determination was motivated by a tendency to rise children successful a Western state and concerns astir progressively strict Chinese power of Hong Kong.

American prosecutors spot a antithetic motivation.

In a effect to U.S. national investigators included successful the lawsuit materials, Hong Kong constabulary said Postovoy was charged connected March 1, 2022, with wealth laundering — a transgression punishable by up to 14 years successful situation and a good of up to $643,000.

According to the email, Postovoy was scheduled to look successful tribunal connected March 4 but near Hong Kong the time before.

Hong Kong constabulary did not respond to VOA’s petition for comment.

By June 2022, Postovoy's woman purchased a location successful southeastern Sarasota.

Sarasota County spot records bespeak the location was valued astatine astir $980,000. A owe covered $680,000 of the cost.

In August 2023, Postovoy bought different house, successful the caller Rivo Lakes gated assemblage successful Sarasota. According to acquisition documents, it outgo $1.13 million. In September, helium transferred it to a spot controlled by his wife.

On the aforesaid day, his woman transferred the location to different spot and aboriginal sold the property.

According to a U.S. magistrate judge, Postovoy's determination to transportation the 2nd location into a spot was apt an effort to conceal his ownership.

He “did not database his location — which is valued astatine astir a cardinal dollars and held successful the sanction of a spot controlled by his woman — connected his fiscal affidavit submitted to this Court,” the justice wrote successful a determination not to assistance Postovoy bail.

This whitethorn not beryllium the lone attempted cover-up successful the case: Russian institution records bespeak that, successful December 2023, a antheral named Dmitry Smirnov replaced Postovoy arsenic proprietor of his Vektor Group company.

VOA’s Cantonese Service contributed probe to this story.