Feds arrest Los Angeles man accused of exporting microelectronics to Russia

A 66-year-old man was arrested in Los Angeles on Wednesday in connection with an alleged years-long scheme to export sensitive technology illegally from the United States to a business tied to the Russian military, according to federal prosecutors.

The man, Ilya Kahn, is a citizen of the United States, Israel and Russia and has residences in Brooklyn, N.Y., and Los Angeles, federal prosecutors said Thursday in charging documents filed in New York.

Kahn is the owner of Senesys Inc., a California-based company, and Sensor Design Assn., a New York-based company. The ventures are involved in developing security software and testing silicon wafers for military aviation electronics and space equipment, court documents say.

Federal prosecutors allege that the two companies are actually the same entity, and that from 2017 through 2023 they shipped more than 290,000 microelectronics and other items out of the U.S.

Kahn worked with a Russian semiconductor company called Joint Stock Company Research and Development Center Elvees, which was sanctioned by the U.S. government in February 2022 after Russia’s invasion of Ukraine. Elvees played a critical role in assisting the Russian military, court documents say.

Between 2012 and 2022, financial records show, Kahn’s business received more than $37 million from Elvees and related entities, including more than $2.1 million in 2021 and 2022, prosecutors allege.

Kahn is charged with conspiracy to violate the Export Control Reform Act, which regulates the export of goods, technology and software that have potential military use.

Prosecutors allege that in 2019, Kahn exported U.S.-made microcontrollers to Elvees in Russia, and in 2022 he exported other equipment through a Hong Kong-based shipping company without the necessary licenses from the U.S. government. According to prosecutors, that equipment included network interface controllers and a radio frequency transmitter, whose exports are limited for national security and anti-terrorism reasons.

Prosecutors accused Kahn in court papers of a number of other acts to support Elvees, including:

• Arranging for Elvees to continue receiving semiconductors manufactured in Taiwan after Russia’s invasion.
• Illegally shipping the items from Taiwan to the U.S. and then to Russian after the Taiwanese company refused to ship the Elvees-designed semiconductors directly to Russia.
• Shipping thousands of microchips based on an Elvees design from a manufacturer in Taiwan through a New York-based shipper to a Hong Kong-based shipping company, and then to mainland China.

“Mr. Kahn stands accused of repeatedly exporting sensitive technology to Russia before, during, and after Russia launched its unprovoked invasion of Ukraine,” Assistant Atty. Gen. Matthew Olsen of the Justice Department’s National Security Division said in a statement. “Violations of U.S. sanctions and export control laws that aid Russia and other hostile powers endanger our nation’s security and will be met with the full force of the Justice Department.”

Kahn could face a maximum of 20 years in prison if found guilty, according to prosecutors. He was scheduled to appear in a downtown Los Angeles courtroom Thursday.

It was not immediately clear if Kahn had any legal representation.