In a story seemingly fit for a Hollywood spy thriller, the U.S. Attorney for the Eastern District of New York unsealed indictments in a Disruptive Technology Strike Force case. The charges against Dr. Nikolaos "Nikos" Bogonikolos included smuggling, wire fraud, and conspiracy and were announced after his arrest in Paris by French authorities. The government alleges a conspiracy dating back to 2017 to provide U.S. goods and technology to military and intelligence end-users in Russia in violation of U.S. export control laws. The charges are allegations, and Bogonikolos is presumed innocent until proven guilty.
Bogonikolos, a Greek national, is the President of the Aratos Group, which the Justice Department described in a press release as a defense trade conglomerate with operations in Greece and the Netherlands. In his LinkedIn profile, Bogonikolos identifies himself as a "serial entrepreneur" and an officer in several other companies, including CEO of ForceApp BV and Director of Blockchain2050, both in the Netherlands and CEO of Sociopolis.io as well as Zeus Consulting in Greece. He had an active social media presence, where he discussed topics and promoted events related to defense technology, space, homeland security, blockchain, and cryptocurrency topics.
As alleged by the government, Bogonikolos used his corporate ties as fronts "to fraudulently acquire and then smuggle U.S.-origin military and dual-use technologies to aid the Russian defense and security sectors." The Russian end users included "Military Unit 33949," a part of the Russian Foreign Intelligence Service, known by its transliterated Russian abbreviation "SVR," and organizations involved in quantum computing, cryptography, nuclear weapons testing, and conventional weapons production. Bogonikolos "procured sensitive equipment meeting NATO specifications designed for tactical battlefield conditions and components with applications in space-based and cryptographic communications on behalf of his Russian intelligence handlers seeking to improve their country's warfighting capabilities."
The indictment alleges that in December 2017, Bogonikolos was invited by an affiliate of Serniya Engineering, a Specially Designated National (SDN) organization known for illicit procurement, "to come to Moscow alone, 'since the agenda will be a very sensitive one.'" In a subsequent order, Bogonikolos told his Russian affiliates that "he would falsify an export license, saying 'I sign that the items are only for Netherlands; . . . Sensitive case . . . For the same reason I cannot press the [U.S.] supplier.'" Bogonikolos allegedly signed false end-use statements and provided them to U.S. companies, certifying that Aratos was the ultimate end user of the requested items, would not reexport the goods, and would not be used for weapons development.
Bogonikolos remains in custody in France, pending the resolution of the Justice Department's extradition request.
Companies should review and verify information provided in end-use/user statements before engaging in transactions to reduce the risk of exposure in similar cases. Knowing your customer has additional benefits as well; whether it is a new client or an old connection, being able to identify customers' needs proactively will also give you a signal when transactions don't match known capabilities.
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