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May 21, 2021Denver, CO, United StatesCounter Proliferation Investigation Unit

HSI conducts investigation of Bulgarian national sentenced to federal prison for illegal exports to Russian military and space program

DENVER — A Bulgarian national was sentenced May 21, to 2 years in prison for violating the International Emergency Economic Powers Act by seeking to export controlled electronic equipment from the U.S. to the Russian military and space program under false pretenses.

Homeland Security Investigations (HSI) conducted the investigation. Assistant U.S. Attorneys Julia Martinez, Wayne Paugh and David Tonini handled the prosecution of the case, with valuable assistance from Trial Attorney Matthew McKenzie of the National Security Division’s Counterintelligence and Export Control Section at the U.S. Department of Justice.

Tsvetan Kanev, 49, of Sofia, Bulgaria, pleaded guilty to violating the International Emergency Economic Powers Act in March 2021.

According to court documents, the defendant inquired with a U.S. manufacturer about purchasing radiation hardened integrated circuits that are commonly used in satellites. Because those circuits are controlled American technologies under the Export Administration Regulations, they require a license from the U.S. Department of Commerce to export them to certain countries including Russia. The defendant told the U.S. manufacturer that the circuits were sought by the Bulgarian Academy of Science, but the manufacturer was suspicious of the defendant’s claim and referred the matter to agents from the U.S. Department of Homeland Security, HSI Counter-Proliferation Investigations Center (CPIC) in Colorado Springs.

Acting in an undercover capacity, HSI agents engaged with the defendant and offered to sell the controlled parts that he sought. In extensive communications with the defendant, HSI agents learned that the defendant intended to transship the exports from Bulgaria through Finland to an end user in Russia. Specifically, after shipping the technology to Finland, the defendant planned to reexport them to Russia in a suitcase to avoid documentation of their ultimate destination. The defendant later confirmed that the end users of the controlled American technology were the Russian military and space program.

The defendant engaged the undercover HSI agents in two transactions, and he acknowledged the illegality of each during negotiations. In October 2015, the defendant transferred $234,938.00 to the undercover agent to purchase clock driver and random-access memory programmable multi-chip modules. In December 2015, the defendant transferred $122,323.00 to the undercover agent to purchase a multiple analogue-to-digital converter. The particular technologies he sought are designed for aerospace applications and controlled under U.S. Department of Commerce regulations for national security reasons.

The defendant acknowledged to the HSI agents that exporting these technologies to Russia is illegal under U.S. law. He structured payments to avoid triggering scrutiny from banking authorities. He completed fraudulent end user statements to deceive U.S. Customs authorities and he encouraged the HSI agents to create additional fraudulent paperwork. The defendant paid the undercover HSI agents extra fees of $25,172.00 and $31,550.42 to compensate them for taking risks and violating U.S. laws. All monies transferred from the defendant to the undercover HSI agents were seized and forfeited to the United States.

The defendant was arrested in Germany in January 2020 and then extradited to Colorado.

HSI is a directorate of U.S. Immigration and Customs Enforcement (ICE), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of over 10,400 employees consists of more than 7,100 Special Agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.

To report a crime, call 866-347-2423 (TTY for hearing impaired: 802-872-6196) or visit the ICE Tip Line.

Updated: 06/30/2021