The US Attorney’s Office of the Eastern District of New York has filed charges in what it calls a “$50 million Russian smuggling scheme.”
An indictment and complaint were unsealed on Monday in federal court after an extensive investigation by the Federal Bureau of Investigation (FBI), Customs and Border Protection (CBP), and the New York City Police Department (NYPD).
10 individuals have been charged with transporting $50 million in electronics from the US to Russia. The electronics were mostly Apple products, and many were even stolen.
All of the electronics were transported on Aeroflot flights, and most of the smugglers were Aeroflot employees. As a result, the Department of State has revoked visas for 113 Aeroflot employees, for their participation in the scheme.
The smugglers generally fit into one of two categories:
- Aeroflot employees who were traveling as passengers, presumably using their travel privileges
- Aeroflot employees who worked New York flights (perhaps specifically bidding for them), and would then transport electronics back to Russia
In all cases, smugglers received instructions from the person at the center of this operation, who would coordinate handoffs in New York.
Searches of luggage of Aeroflot crew members and employees revealed millions of dollars worth of electronic devices. For example:
- Between August and December of 2019, one man took four trips from the United States to Russia, transporting over 1,000 Apple products valued at over $1 million
- On October 9, 2019, he carried nine suitcases containing 235 Apple products, with an estimated value of $250,000; one has to wonder if customs staff in Russia were in on this, because I feel like typically traveling with nine suitcases would be a guaranteed way to get pulled over when going through customs
When a search warrant was executed on the residence of the guy in the center of all this, over $600,000 in cash plus a large number of Apple products were discovered.
Of course no announcement of a bust like this is complete without some bad attempt at humor. As the FBI Assistant Director-in-Charge said:
“If you believe it is acceptable to exploit positions with a foreign airline to smuggle millions of dollars in illegal goods back to Russia as we allege, the answer is Nyet.”
Aeroflot’s 777 business class
Bottom line
10 people have been charged in a scheme that involved smuggling tens of millions of dollars worth of electronics on Aeroflot flights from the US to Russia. These were mostly Aeroflot employees, with many working trips to New York, and presumably just making some extra money along the way.
This is far from the first time that we’ve seen a story of airline employees involved in some sort of a smuggling scheme, though this certainly seems like one of the larger scale and more coordinated efforts that has been uncovered.
In the US we’ve sometimes seen flight attendants act as drug smugglers, which is easy enough for them to do when they can bypass security thanks to their “Known Crewmember” status.
This Aeroflot scheme seems gutsy, especially when you have one person traveling with nine suitcases that have 235 Apple products…
The first thing the Department of Justice's press release talks about is transporting stolen property:
"An indictment and a complaint were unsealed today in federal court in Brooklyn variously charging 10 defendants with transportation of stolen property, failure to file export information, illegal exportation of electronic devices and conspiracy to commit these offenses."
Not really people buying stuff at the Apple store and trying to sneak it into Russia without paying the customs charges.
The first thing the Department of Justice's press release talks about is transporting stolen property:
"An indictment and a complaint were unsealed today in federal court in Brooklyn variously charging 10 defendants with transportation of stolen property, failure to file export information, illegal exportation of electronic devices and conspiracy to commit these offenses."
Not really people buying stuff at the Apple store and trying to sneak it into Russia without paying the customs charges.
Knowing how russian customs work, I can 100% guarantee that Sheremetyevo customs officers (I could probably even show you which ones) are in on this and receiving a big cut of the profits.
On the other hand, I can also 100% guarantee that the airline itself is NOT in on this. It won’t happen officially, but you can be reasonably certain that unofficially everyone involved will be dealt with very severely. And, by the...
Knowing how russian customs work, I can 100% guarantee that Sheremetyevo customs officers (I could probably even show you which ones) are in on this and receiving a big cut of the profits.
On the other hand, I can also 100% guarantee that the airline itself is NOT in on this. It won’t happen officially, but you can be reasonably certain that unofficially everyone involved will be dealt with very severely. And, by the way, any suggestion of revoking their license to fly to the US is ridiculous.
I hope this doesn't lead to Aeroflot being banned from flying to the US, or them just pulling out, as they are my only direct air link from Russia to the US. Plus, they are much cheaper than using a European airline and connecting in Europe.
Nine suite cases? Is my wife going abroad to visit her Family? also that is "Light Travel" for Filipinos, Balik Bayan Boxes are the only way to go for them.
@Wayne Duignan
No, I did not miss the "stolen" part. However, the way the article's written made it sounds like US authorities are objecting to the act of exporting those Apple products to Russia more so than busting a massive domestic theft ring.
@yyc
Yes, I understand that the perpetrators weren't exporting stuff "by the book" but it still didn't explain why the FBI took on this case as this seems to help...
@Wayne Duignan
No, I did not miss the "stolen" part. However, the way the article's written made it sounds like US authorities are objecting to the act of exporting those Apple products to Russia more so than busting a massive domestic theft ring.
@yyc
Yes, I understand that the perpetrators weren't exporting stuff "by the book" but it still didn't explain why the FBI took on this case as this seems to help the Russians more than any US citizen/entity as highlighted by commenter EL above.
@david 1991called. Says it misses you. Maybe you can go meet Yeltsin for some drinks.
@Ron, there are proper channels to export goods for commercial purposes, packing them in nine suitcases is not one of them.
@ Ron @Fonzi
Did you miss the part about "and many were even stolen" That's suggests trafficking in stolen property, something the FBI would look into.
Also, most US companies have strict rules about the distribution, sales, marketing and pricing for specific countries. Skirting those protocols can inflict actual financial harm onto the US company, i.e. loss of sales, warranty issues, non-compliance of local regulations.
Apple does not have a "bricks & mortar" retail...
@ Ron @Fonzi
Did you miss the part about "and many were even stolen" That's suggests trafficking in stolen property, something the FBI would look into.
Also, most US companies have strict rules about the distribution, sales, marketing and pricing for specific countries. Skirting those protocols can inflict actual financial harm onto the US company, i.e. loss of sales, warranty issues, non-compliance of local regulations.
Apple does not have a "bricks & mortar" retail outlet in Russia, but rather an on-line portal to purchase "Russia-compliant" products. So it's financially attractive to have in-country smuggled inventory of Apple products that bypass the on-line source.
Further, the Russian government requires that Apple maintain and submit to the authorities all data related to the ownership and use of Apple products. Failure to comply can get you in trouble.
@Endre
And shouldn't every Endre post end with "paid first class"?
Actually this prosecution is exactly helping the Russian Government, now they could collect more import taxes that could otherwise be avoided
@Ron
exactly what was i thinking.
Maybe it was also some money laundering scheme. on the other side foeg of you leave the country with more then 10k$ you have to declare it. Maybe something similar applies here.
Flight attendants from American Airlines, those based in Buenos Aires, do this as a common practice.
They travel to the US, their companion for trqvel benefits do the same, they buy tons of electronics that are hardnto find in Argentina and they sell them for a 50 to 100% premium.
They of course are connected to customs agents in Argentina, to be able to enter the contraband without issues.
Surprisingly, AA knows about this and they do nothing.
Is it illegal to transport Apple products out of the country? Why was the FBI so concerned with individuals exporting large number of Apple products? Is there any specific export restrictions to Russia relating to electronic devices? On the surface, I think it should be the Russians who find this scheme objectionable (as they're the ones losing out on import duties) rather than the FBI, no? Please enlighten me.
I felt nervous doing a Grabr run to Buenos Aires with a couple thousand of merchandise. I didn't overdo it (one phone, one tablet, etc.) These guys were definitely gutsy...
Commies will always be liars and cheats and thieves
I´ve moved to three different countries and always take 12-13 suitcases to the airport when moving. I´ve never been stopped by customs. This is as a family with kids so I don´t know if that makes a difference?
I think Tom is worried about how Vlad will react to this story...
Wow! I'd think Russian customs may be in on it moreso than Russian immigration. I wouldn't be surprised if the smuggler just paid them a bribe to let it slip under the radar.
I think your article might have been more balanced and fair if you would have sought a quote/reaction from Aeroflot.
Revoke their license to fly in the US for a while. That will hurt the airline more.
We all know that every Russian recipe begins with "Stole four eggs"