Forgot your password?
typodupeerror
Crime The Military Your Rights Online Technology

Russian High-Tech Export Scandal Produces 8 Arrests in Houston 83

Posted by timothy
from the it-isn't-the-bars-it's-the-humidity dept.
Penurious Penguin writes "Millionaire Alexander Fishenko, owner of US-based Arc Electronics Inc, and seven others have been arrested in Houston Texas, with a total of 11 indicted in a conspiracy to smuggle advanced microelectronics from the U.S. to Russia. The technology allegedly involves components of radar, weapons guidance, and detonators. Amongst the evidence are accounting records indicating notable similarity between the revenue of Arc Electronics and the Russian Federation's defense spending; intercepted phone calls and emails; and a letter to Arc Electronics from a Russian domestic intelligence lab complaining of defective microchips . A Russian foreign ministry spokesman has denied there were any intelligence connections in the affair."
This discussion has been archived. No new comments can be posted.

Russian High-Tech Export Scandal Produces 8 Arrests in Houston

Comments Filter:
  • by GeneralTurgidson (2464452) on Thursday October 04, 2012 @09:02AM (#41547931)
    and allow Communist infiltration, Communist indoctrination, Communist subversion and the international Communist conspiracy to sap and impurify all of our precious microchips.
    • by Shavano (2541114)
      The US government paid to develop advanced weapons systems that give them a tactical advantage over everybody else -- at least that was their intent. So why shouldn't they get to keep that advantage as long ad they can?
      • by aaaaaaargh! (1150173) on Thursday October 04, 2012 @11:19AM (#41549443)

        But the US can still nuke anyone from the orbit, so the money was not well-spent in the first place.

        We should rather care about the quality of our drinking water. With current safety standards, any Russian spy could put chemicals in it that cause homsexuality, and I guess we all know what consequences that would have.

        • But the US can still nuke anyone from the orbit, so the money was not well-spent in the first place.

          People keep saying this, but it never happens; the US keep sending conventional troops places to get shot up instead.

          I say put up or shut up.

    • and allow Communist infiltration, Communist indoctrination, Communist subversion and the international Communist conspiracy to sap and impurify all of our precious microchips.

      Somebody makes microchips out of our precious body fluids? Yuk!

      • Somebody makes microchips out of our precious body fluids?

        Yep, kinda [scripps.edu]

      • by Noughmad (1044096)

        and allow Communist infiltration, Communist indoctrination, Communist subversion and the international Communist conspiracy to sap and impurify all of our precious microchips.

        Somebody makes microchips out of our precious body fluids? Yuk!

        The silicon mines are dying. Pentiums are people!

      • by sumdumass (711423)

        You've heard of organic quantum computing haven't you?

        I'm sure you have.. now I'm betting you are wondering if I'm serious. Well, just keep eating plenty of carrots so you will have good eyesight.

    • Col. Ripper was the one who was upset about the Commies impurifying our manly juices microchips with fluoride.

      (Side note: HF is actually used in some chip manufacturing.)

    • by Hillgiant (916436)

      Strictly speaking, the perpetrators in this case were motivated by capitalism, not communism.

      (yes you were making a joke. but really, its been 21 years since the USSR went kaputnik)

  • Microelectronics? (Score:4, Interesting)

    by hjf (703092) on Thursday October 04, 2012 @09:04AM (#41547953) Homepage

    Microelectronics that are "components of radar, weapons guidance, and detonators". So, a DSP? A microcontroller? FPGAs?

    As if none of that shit is manufactured in asia anyway. Conspirancy to smuggle? More like tax fraud under an heroic excuse.

    • Re: (Score:3, Funny)

      His web site says that he specializes in procurement of hard to find and obsolete components. Intel 4004 perhaps?

    • by poity (465672)

      Texas Instruments has fabrication facilities in the US (in Texas, no less). They're a major provider of military computer hardware. Their calculators might be made in Asia, but you can bet the chips that the military gets aren't made in Asia.

    • by Anonymous Coward

      A/D converters, processors, SRAM, Microcontrollers. Basic chinese mass market kit.

      The faulty chips seems to be these ones (from the part number):
      http://www.alldatasheet.com/datasheet-pdf/pdf/81901/AD/ADG819BRT.html

      It's a CMOS single pole, double throw switch. Yes, seriously, takes me back to my childhood! 74LS00's an all.

      Read the indictment:
      http://federalcrimesblog.files.wordpress.com/2012/10/letter-to-the-court-moving-for-a-permanent-order-of-detention.pdf

      Better still read the ACTUAL quotes from the people

  • by crazyjj (2598719) * on Thursday October 04, 2012 @09:10AM (#41548013)

    Next time take a page from the Chinese and just convince the target country to manufacture the components in your country in the first place.

    • Next time take a page from the Chinese and just convince the target country to manufacture the components in your country in the first place.

      Hmmm, sounds like you should brush up on your export control laws [doc.gov]. From the most basic concepts:

      WHAT IS AN EXPORT?

      Any item that is sent from the United States to a foreign destination is an export. “Items” include commodities, software or technology, such as clothing, building materials, circuit boards, automotive parts, blue prints, design plans, retail software packages and technical information.

      How an item is transported outside of the United States does not matter in determining export license requirements. For example, an item can be sent by regular mail or hand-carried on an airplane. A set of schematics can be sent via facsimile to a foreign destination, software can be uploaded to or downloaded from an Internet site, or technology can be transmitted via e-mail or during a telephone conversation. Regardless of the method used for the transfer, the transaction is considered an export. An item is also considered an export even if it is leaving the United States temporarily, if it is leaving the United States but is not for sale (e.g., a gift), or if it is going to a wholly-owned U.S. subsidiary in a foreign country. Even a foreign-origin item exported from the United States, transmitted or transshipped through the United States, or being returned from the United States to its foreign country of origin is considered an export. Finally, release of technology or source code subject to the EAR to a foreign national in the United States is “deemed” to be an export to the home country of the foreign national under the EAR.

      Emphasis mine. So how are you telling the Chinese what to make if you're not shipping them the schematics? If you know a company that is manufacturing such sensitive controlled electronics overseas I believe you are legally obligated to report it to your local Office of Export Enforcement branch [doc.gov].

      • by crazyjj (2598719) *

        Duh, you don't need to ship them the schematics. Their hackers have already stolen them. Problem solved!

    • The problem is that you need to have sufficient manufacturing capability in your country to pull that off first...

  • Disbelief (Score:1, Flamebait)

    by ka9dgx (72702)

    I for one, refuse to believe that we actually have any technology left which is advanced beyond that available in countries where they actually make things.

    We let the republicrats job-jack all of our manufacturing overseas, and now we no longer have a manufacturing base left, which means nobody getting annoyed at problems in production, which means no innovation.

    This story is pure propaganda as far as I can tell. We don't even make the best culture any more, as Gangnam style has proven. We just do knockoff

    • by poity (465672)

      It doesn't necessarily have to be about obtaining technology for the purpose of "catching up". Even if the US doesn't have technology that is beyond what Russia or China has, it's still useful to those countries to obtain that technology. By studying it, they can find strengths and weaknesses, alter their doctrine to take into account its capabilities, and more intelligently develop countermeasure hardware. It's in the interest of every country to keep these things secret, and it's in the interest of every

    • by tibman (623933)

      Civilian manufacturing maybe. But that's up to business owners to make those decisions, not politicians. Blame business owners. They could build it locally for more (or the same cost with less profit) and support local economies. I'm not trying to offend anyone and of course i'm simplifying it.. but that is how it looks to me.

  • by dgharmon (2564621) on Thursday October 04, 2012 @09:13AM (#41548043) Homepage
    Is it any news that the Russians 'borrow` a lot of their tech from the west. I understand you could get such 'advanced microelectronics` in a games console. Wasn't it the case, some time ago, that a middle-eastern country was going round buying up games consoles for the chips?
    • by Cid Highwind (9258) on Thursday October 04, 2012 @09:27AM (#41548193) Homepage

      Yes, Iraq supposedly bought 4000+ Playstation 2s to model nuclear detonations, there was at least one slashdot story [slashdot.org] about it.

      Of course, if you believe what the western press reported about Iraqi weapons programs in that era, I have a very nice bridge and 400 kilos of yellowcake Uranium to sell you...

      • 1988 Iraq, Project Babylon. Objective: to build a supergun and eventually shoot stuff into orbit starting with 'Big Babylon'.

        Basically, it was a wacky idea. So the idea of using 4k PS2s (another wacky idea) shouldn't be scoffed at too. We are talking about Saddam Hussein. He wasn't a level headed kind of guy. He was a dangerous guy with delusions of grandeur. Good riddance.

    • by CdBee (742846)
      I think that story (using Nintendo chips as missile guidance?) was totally debunked in the end and it was suggested it may have been dreamed up along with the majority of the illegal weapons, to justify a war that was already desired
      • How hard can missile guidance be? The software is tricky, but it doesn't demand a great deal of computing power. You could probably run it on a few PICs, with a skilled coder.
      • I think that story (using Nintendo chips as missile guidance?) was totally debunked in the end and it was suggested it may have been dreamed up along with the majority of the illegal weapons, to justify a war that was already desired

        Particularly when it is well known that you can defeat missiles using that kind of control system with something as simples as a track ball and three buttons. Here's a picture of the operator console for such a system: http://cdn.chud.com/a/a2/a23bbcb6_11011101.jpeg [chud.com]

  • Silly Russians (Score:5, Insightful)

    by Required Snark (1702878) on Thursday October 04, 2012 @09:23AM (#41548139)
    Don't they realize that all "US" electronics are made in China? Why are the going through all the trouble to illegally export gear from the US when they can get it directly from the manufacturers in Asia? They are still stuck in a Cold War mind set, where the US is the enemy and Asia is not the major source for technology. They need to stop living in the past.

    Nothing is actually made in the US any more. The big bucks here are in intellectual property and patent litigation: Samsung vs Apple.

    The Chinese are ahead of the curve on this. They know the best way to gain advantage is to use cyber-theft to steal IP. It is very cost effective and produces quick results.

    Unlike export controls, there is no national policy on protecting IP online. Every time someone in the government (Democrats mostly) brings it up business interests scream about government interference, needless regulations and creeping bureaucracy.

    If something is stolen via cyber-theft, their is no legal consequence. Even in the military sector, none of the big defense contractors ever are fined or loose contracts because they leak classified information like a sieve.

    Heck, now with the complete lack of controls on campaign contributions it would be cheap to insure that the current online vulnerabilities remain the norm. All you have to do is give some money to the right elected officials in Congress, and stealing US technology will remain as easy as taking candy from a baby.

    The Russians need to get with the program and copy what the Chinese are already doing. They should be spending more money on PACs, and stop wasting effort on smuggling.

    • by PPH (736903)

      Don't they realize that all "US" electronics are made in China? Why are the going through all the trouble to illegally export gear from the US when they can get it directly from the manufacturers in Asia?

      Better prices.

    • Re:Silly Russians (Score:4, Informative)

      by mcgrew (92797) * on Thursday October 04, 2012 @12:18PM (#41550157) Homepage Journal

      Nothing is actually made in the US any more.

      Except Construction equipment [caterpillar.com], tractors [casece.com], cars, trains, roads, houses, commercial buildings, food, copper piping and tubing [cerroflow.com], drugs and other chemicals (ever hear of Monsanto?), concrete... No, we make nothing here.

      Gees, guys, wtf?

      • Nuclear weapons, nuclear powered submarines, nuclear powered aircraft carriers, nuclear powered spacecraft, F16's, F18's, F22's, C17's, B2's, B52s, B1B's, A10's, Tanks, EWACS, Up Armored trucks, Air to ground missiles, Ground to Air missiles. Missile to Missile missiles.

        Do you all get the drift here?

        • Actually the Russians have more advanced nuclear powered spacecraft than the US. B1B? Sucks compared to a Tu-160 which has twice the speed and twice the payload. C17? Sucks compared with an An-225 Mriya and their Il-76 do the job just fine. B-52s? They are okay but the Russians also have the Tu-95 Bear. I doubt there is anything in the F-16 or F-18 that they don't have already done better. B-2s are good to bankrupt yourself.

          F-22s and F-18 Super Hornet have some interesting technology which they are attemp

      • Gees, guys, wtf?

        You must be new here - this is Slashdot, we don't deal in facts.

        That the US manufacturing segment is something like the 11th or 12th largest economy in the world all by itself is utterly irrelevant.

      • US cars suck. Why would I want to copy those? Construction equipment? The Japanese have better.
      • by Mr 44 (180750)

        Spend some time on:

        http://fuckyeahmadeinusa.tumblr.com/ [tumblr.com]

      • When I talk critically about the Russians smuggling and not stealing IP on line I am being sarcastic, that is conveying contempt for both Russia and the USA.

        When i praise the Chinese for their efficient on line spying I am being ironic, saying the opposite of what I really feel.

        When I talk about a lack of Federal policy on protecting US assets from cyber attacks, I am being accurate. There is no enforceable federal policy about protecting infrastructure or intellectual property on line. There are a lot of

    • by k6mfw (1182893)

      Don't they realize that all "US" electronics are made in China?

      [snip]

      The Russians need to get with the program and copy what the Chinese are already doing. They should be spending more money on PACs, and stop wasting effort on smuggling.

      Yes, that is what I'm thinking whenever there is "high tech export" which is becoming a bankrupt statement. What the Russians and Americans should learn from Chinese is how to build things. OK so I'm getting factious.

      Anyway, Happy Sputnik Day everyone.

  • ... Russia, that is, has gone rogue. The whole state is corrupt. This however looks like perfectly normal spying and the sort of thing they have always done, and vice-versa.

    Don't start complaining until they use radiological weapons on your streets, like they did to us...
  • by concealment (2447304) on Thursday October 04, 2012 @09:41AM (#41548353) Homepage Journal

    Starting in the 1970s, Russian immigrants came to this area in great numbers. They are bordered on the South by a large Hispanic population, on the East by a large East Asian and Indian population, and on the West by rural communities and exburbs.

  • It's interesting that this article didn't make the front page of latimes.com, washingtonpost.com, or nytimes.com. In 1987, when Toshiba sold milling machines to Russia for submarine propeller manufacture, it was a huge controversy. I believe we are living in a safer world.
  • by shutdown -p now (807394) on Thursday October 04, 2012 @12:59PM (#41550693) Journal

    ... I would like to know if what they stole is actually of use? Or is it some kind of commercial grade stuff that you can buy in Radio Shack anyway, and they just pretended to run some super secret covert ops to ship it over to get funding? (given the level of corruption, this wouldn't be unusual or unprecedented)

    I mean, c'mon, I pay taxes which are used to fund this stuff, and then they squander them on the likes of Anna Chapman.

    • by Anonymous Coward

      The real waste here is in Russian procurement bureaucracy, which has in this case also revealed US export violations. What, 15 units of MAX1480EAEPI at $25 apiece? You need to publish a government tender openly online for that shit [sozvezdie.su] and hold a competition, for every foreign intelligence service to peruse at their leisure? I can order this qty myself online in 5 min from stock at Digi-Key [digikey.ca] (or a number of other suppliers worldwide) and ask my university for reimbursement, no questions asked.

  • "... A Russian foreign ministry spokesman has denied there were any intelligence connections in the affair." To be busted obviously no inteligence was involved.
  • by Anonymous Coward

    Russia has the capability to make its own microprocessors. I very much doubt that any of this gear was intended for official military uses, and it seems very unlikely that the Russian military would ever allow it.
    I understand that the components of recent Russian radar systems like the NIIP Tikhomorov EASA system (including GaAs Tx/Rx modules), are all domestically manufactured, as is the multi-core VLIW CPU at the heart of its computer system.
    There are a few instances of usage of commercial grade FPGAs in

1 1 was a race-horse, 2 2 was 1 2. When 1 1 1 1 race, 2 2 1 1 2.

Working...