Sergey Nefedov, 40, of Anchorage, Alaska, and Mark Shumovich, 35, of Bellevue, Washington, have been indicted for their alleged involvement in a scheme to illegally export nearly half a million dollars’ worth of snowmachines and parts from the United States to Russia. The indictment, returned by a federal grand jury in the District of Alaska, charges the men with multiple violations of U.S. export laws. Nefedov and Shumovich were arrested yesterday, with Nefedov being apprehended in Alaska and Shumovich in Washington.
Officials Speak on the Charges
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division stated, “As alleged in the indictment, the defendants engaged in a scheme to evade export restrictions by smuggling hundreds of thousands snowmachines and related parts valued in $ were shipped to Russia. This case underscores our commitment to hold accountable those who violate sanctions laws and impose costs on the Russian government for its unjustified invasion of Ukraine.”
U.S. Attorney S. Lane Tucker for the District of Alaska emphasized the gravity of the situation: “Violations of export laws carry significant consequences. Our office will work diligently with the FBI, Homeland Security Investigations, and the Department of Commerce to prosecute this case to the fullest extent of the law and ensure U.S. export restrictions are enforced.”
The Alleged Snowmachine Export Scheme
The charges stem from actions taken between March 2022 and May 2023, during which Nefedov and Shumovich allegedly conspired with individuals in Russia and Hong Kong to circumvent U.S. export restrictions. These restrictions, imposed under Executive Order 14068 following Russia’s invasion of Ukraine, prohibit the export of luxury goods, including snowmachines, to Russia. The defendants are accused of routing the shipments of snowmachines through an intermediary company in Hong Kong to conceal the final destination.
Enforcement and Investigation
The Department of Commerce’s Assistant Secretary for Export Enforcement, Matthew S. Axelrod, stated: “Whether the sales are made directly to Russia or through Hong Kong as a means of money laundering, it is illegal to sell snowmobiles there. Today’s arrests reflect our aggressive efforts to enforce these restrictions.”
According to Larissa L. Knapp, executive assistant director of the FBI, “These arrests highlight the FBI’s commitment to preventing the illegal export of U.S. goods to foreign adversaries.” Attempts to circumvent US laws, penalties, or regulations will not be tolerated.”
Special Agent in Charge Rebecca Day of the FBI Anchorage Field Office emphasized the gravity of the charges: “The FBI will persist in collaborating with our law enforcement partners to investigate those who undermine export laws to smuggle goods out of the United States.”
Special Agent in Charge Robert Hammer of Homeland Security Investigations (HSI) for the Pacific Northwest highlighted the broader implications of the investigation: “This seizure of snowmachines disrupted a transnational criminal network attempting to circumvent Russian sanctions. HSI, along with U.S. Customs and Border Protection, will continue to identify, search, and seize illegally exported merchandise and prosecute those responsible.”
Details from the Indictment
According to the indictment, a Russian national who owned a company selling snowmachines in Russia (referred to as Co-Conspirator 1, or CC-1) collaborated with another Russian national operating in Hong Kong (Co-Conspirator 2, or CC-2) to ship nearly $1 million worth of goods from Hong Kong to Russia. CC-1 allegedly instructed Nefedov to obtain quotes from U.S. snowmachine distributors and forwarders, then routed funds through CC-2’s company to Nefedov’s company, Absolut Auto Sales LLC. Nefedov and Shumovich then allegedly purchased the snowmachines and misrepresented their final destination to evade U.S. export laws.
Legal Consequences
Nefedov and Shumovich face several charges, each carrying significant maximum penalties. These include conspiracy to unlawfully export goods (five years in prison), false electronic export information activities (five years in prison), smuggling (10 years in prison), unlawful export without a license (20 years in prison), and conspiracy to commit international money laundering (20 years in prison). Nefedov is also charged with additional counts of money laundering and making false statements, each carrying maximum penalties of 20 years in prison. Sentencing will be determined by a federal district court judge based on U.S. Sentencing Guidelines and other statutory factors.
Ongoing Investigation into Snowmachine Export
The investigation into the illegal export of snowmachines is being led by the FBI, HSI, and the Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement. Trial Attorney Leslie Esbrook of the Counterintelligence and Export Control Section of the National Security Division is leading the prosecution in this case, assisted by Assistant U.S. Attorney Adam Alexander for the District of Alaska.
Task Force KleptoCapture
This case is part of the Justice Department’s Task Force KleptoCapture, an interagency task force dedicated to enforcing sanctions, export controls, and economic measures against Russia in response to its invasion of Ukraine. The task group, which was announced by the Attorney General on March 2, 2022, uses every departmental resource to thwart attempts to circumvent US sanctions.
Presumption of Innocence
All defendants are deemed innocent unless proven guilty beyond a reasonable doubt in a court of law, and the indictment is only an allegation.
