Landing in prison: US arrests Russian aircraft parts smugglers for bypassing sanctions

RU

Voluntary appearance for arrest

In Phoenix, USA, on the morning of May 11, 2023, Justin Kent, a special agent with the Bureau of Industry and Security's Export Control Service, convened a meeting with Miami-based Russian businessmen Oleg Patsulya and Vasily Besedin. The encounter occurred at the Border and Customs Service office, where Patsulya and Besedin voluntarily attended, anticipating that Kent would resolve the issue of a halted shipment of brakes intended for Boeing planes from the United States.

Special Agent Kent requested Patsulya and Besedin to complete a declaration with “utmost honesty”, affirming their compliance with the export bans imposed on Russia and Belarus. He clarified that the “end consignee” referred to the actual buyer who wished to use the goods as intended. Patsulya and Besedin assured the agent that the brakes would not be sent to Belarus or Russia.

After that, the businessmen were promptly apprehended, and a criminal complaint was submitted to the court. On May 16, a grand jury officially indicted Patsulya and Besedin. U.S. authorities assert that the individuals had intentions to evade sanctions targeting Russia and were further involved in money laundering activities associated with smuggling.

A preliminary hearing has been slated for May 22 at the U.S. District Court in Arizona. Patsulya and Besedin, if found guilty, could potentially face a maximum prison sentence of up to 20 years on each of the charges brought against them.

Bypassing sanctions: from the U.S. through Turkey and the Maldives

Following Russia's invasion of Ukraine in February 2022, the United States imposed a ban on the export of aircraft parts to Russia. However, starting from May, Patsulya engaged in a series of correspondence, sending letters to Russian airlines offering to purchase aircraft parts. In one such letter addressed to the Rossiya airline, he asserted that his “group of companies” already had clients in Russia, including Smartavia and the Ministry of Defense. Patsulya's message, access to which was obtained by U.S. authorities through a court order, stated, “In light of the sanctions imposed on Russia, we are successfully dealing with new challenges.”

Patsulya justified the elevated prices of spare parts by attributing them to the sanctions. Special Agent Kent referred to Patsulya's letter to the Pobeda airline, in which he stated, “The prices we offer include direct delivery to your Moscow warehouses. Due to the sanctions imposed on Russia, the expenses related to parts, logistics, transportation, and delivery time have escalated. In numerous instances, a certificate from the end consignee is required, and we can take care of all these matters.”

Patsulya engaged in correspondence with Russian airlines on behalf of a Turkish company. Concurrently, Besedin, acting on behalf of Florida-based MIC P&I, sought to procure spare parts from American companies, including airplane brakes that fell under the sanctions. The significant markup for evading sanctions and managing the shipping arrangements amounted to over $30,000, which was nearly half the price charged by the U.S. supplier.

In August 2022, Besedin identified an Arizona-based supplier offering seven sets of brakes at a price of $70,000 apiece. Patsulya engaged in negotiations with Smartavia, proposing to provide the assemblies at a higher price of $103,000 per unit. The Russian company transferred the funds to Patsulya's Turkish company, which subsequently transferred the money to the bank account of the US-based company MIC P&I, whose office was situated within Patsulya's residence. The businessmen assured the supplier that the goods would not be destined for Russia or Belarus and guaranteed their delivery to the Turkish airline. However, despite their persistent inquiries, the Arizona supplier remained unresponsive for over a month. Ultimately, the company failed to deliver the brakes, resulting in Smartavia Airlines being left empty-handed.

In their efforts to acquire and deliver the already paid-for brakes to Russia, Besedin and Patsulya discovered a company located outside the United States that managed to order multiple sets of brakes. The price at which these brakes were obtained was significantly higher than what Smartavia had initially paid. In the documentation pertaining to the transaction, Besedin and Patsulya specified that the assemblies would be dispatched to the Maldives and assured that there would be no resale to other companies. However, the shipment drew the attention of U.S. export control authorities, and as a result, the brakes never reached their intended destination in the Maldives.

Simultaneously, the Pobeda airline urgently requested a shipment of brakes from the businessmen. Pobeda was willing to pay $165,000 per assembly. Pobeda transferred an amount close to $750,000 to Patsulya's Turkish accounts in anticipation of receiving the brakes. However, the businessmen encountered significant challenges in securing a supplier in the United States who agreed to sell them the required assemblies. Subsequently, the delivery of the brakes was further delayed due to intervention from the Bureau of Industry and Security.

All cash, no brakes

Patsulya and Besedin are facing accusations not only of evading sanctions but also of engaging in money laundering as a consequence of their actions. Despite their failure to deliver spare parts worth several hundred thousand dollars to Russian carriers, between May 31, 2022, and January 31, 2023, they received a total of $2.75 million from Turkey for the “brakes.” These funds were subsequently transferred to the personal accounts of Patsulya and Besedin, who withdrew substantial amounts in cash. It has been reported that Patsulya utilized a portion of this money to acquire a BMW 740i and a Sea Ray Sundancer yacht.

According to U.S. prosecutors, the overall proceeds obtained by Patsulya through the sanctioned trade are estimated to be around $4.5 million. If Patsulya is found guilty, this entire sum of money will be subject to confiscation. Additionally, as part of the legal process, his yacht and BMW will also be seized from him.

In Russia, Oleg Patsulya has been declared bankrupt since 2018, with outstanding debts amounting to 568 million rubles ($7,048,880). It turned out he did not possess any significant assets, and his only possession, a share in Formulastroiagro LLC, was sold at an auction but fetched little value. Patsulya was also general director and co-owner of Glavspetsstroy LLC. This company has also declared bankrupt as well, and Patsulya had to pay 240 million rubles ($2,978,400) in bankruptcy proceedings.

Patsulya is known to own two condominiums in Florida. He is also listed as the founder of a number of firms that have been used for the smuggling of aircraft parts or the ownership of real estate.