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Houston business raided, accused of selling military hardware to Russia

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HOUSTON (KHOU) – The Federal Bureau of Investigation on Wednesday raided a southwest Houston company accused of illegally exporting high-tech equipment to Russian military and intelligence officials.

A total of eight people were taken into custody at Arc Electronics, Inc. in the 9500-block of Townpark Drive. Officers with the Houston Police Department assisted FBI agents at the scene.

The U.S. Department of Justice unsealed an indictment charging 11 members of a "Russian military procurement network." The group operated in both the U.S. and Russia, according to the DOJ.

Alexander Fishenko, the owner of Arc Electronics, was charged with operating as an unregistered agent of the Russian government. Officials said Fishenko obtained microelectronics on behalf of the Russians and allegedly exported the technology despite strict government controls.

The DOJ said the equipment has potential use in a "wide range of military systems, including radar and surveillance systems, weapons guidance systems, and detonation triggers."

Wednesday's raid was part of a search warrant issued for a total of seven residences and business locations associated with the suspects. The DOJ also issued seizure warrants on five bank accounts held by Fishenko and his company.

Officials at the Department of Commerce alleged 165 foreigners received, transshipped or helped with the export of the electronics.

In a press release, federal officials said Fishenko and the other defendants were involved in a conspiracy since October 2008, "carefully evading the government licensing system set up to control such exports."

The equipment shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers, and microprocessors, according to DOJ officials. The DOJ noted that Russia does not produce many of these sophisticated goods domestically.

According to the indictment, Fishenko was born in the Soviet Republic of Kazakhstan and graduated from the Leningrad Electro-Technical Institute in St. Petersburg, Russia. He immigrated to the United States in 1994 and became a citizen in 2003.

Arc Electronics has been in business since 1998, according to the DOJ.

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