Manufacturer Ensnared in Jig Grinder Smuggling Scheme

Authorities were able to intercept the machine before it was delivered to Russia.

A high-precision jig grinder is a versatile tool to have around the machine shop but because of its usefulness in defense industries, our country is extra careful about the export destination for U.S.-made machines.

One Connecticut-based manufacturer found out the hard way after getting caught up in an illegal scheme to smuggle a jig grinder into Russia. According to the U.S. Department of Justice, two companies based in Estonia and Latvia conspired to violate U.S. export laws and regulations by illegally shipping the machine. U.S. authorities don’t require a license to ship jig grinders to European Union countries but they require an export license for Russia since the machine can be used in nuclear proliferation programs.

U.S. authorities were able to intercept the jig grinder in Latvia before it was delivered to Russia. And now, several of the individuals and companies involved in the scheme have been charged with conspiracy, violation of the Export Control Reform Act, smuggling goods from the United States and international money laundering conspiracy offenses.

As for the Connecticut manufacturer, which went unnamed in a news release from the Justice Department, it was ordered to forfeit nearly $500,000 received in the attempted purchase of the jig grinder. A U.S. district judge also ordered the forfeiture of another $342,000 seized from By Trade OU, one of the foreign companies involved with the scheme.

The Justice Department originally handed down the indictments in the case late last year, when officials warned of the dangers of putting devices like jig grinders in the hands of countries like Russia, which is actively waging war against Ukraine.

“The power and precision of American technology must not be put to use by the Kremlin’s war machine,” said Andrew Adams, Director of Task Force KleptoCapture. “Enforcement against efforts to illegally export and reexport controlled U.S. technology is critical in ensuring that superior American technology isn’t exploited by Russia in this unjust war. The arrests in Latvia demonstrate that smugglers and fraudsters will be apprehended and prosecuted notwithstanding the sophistication of evasion networks operating far from U.S. shores.”

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