Two busted for snow machine laundering scheme, shipping sleds to Russia through Hong Kong

Sergey Nefedov, 40, of Anchorage, and Mark Shumovich, 35, of Bellevue, Wash., were indicted this week for scheming to illegally export nearly $500,000 worth of snow machines and associated parts from the United States to Russia, without required licenses and approvals. The scheme was a violation of U.S. export laws and federally established sanctions on Russia. Nefedov and Shumovich were arrested in Alaska and Washington, respectively.

The two men, both Russia-born but naturalized citizens, are accused of coordinating with individuals doing business in Russia and Hong Kong to evade the U.S. export restrictions that were imposed on certain goods to Russia, in accordance with Executive Order 14068, which followed Russia’s invasion of Ukraine on Feb. 24, 2022.

A Russian national who owned a company selling snow machines in Russia conspired to purchase snowmachines and other motorsport vehicles from Nefedov’s company, Absolut Auto Sales LLC. Nefedov is also the owner of Alaska Sled Tours LLC.

According to the indictment, Nefedov and Shumovich got quotes from U.S.-based snowmachine distributors and freight forwarders to purchase and ship snowmachines to a company in Hong Kong, which wired funds to Nefedov’s company. Nefedov used those funds to purchase snow machines that they knew were destined for a Russian buyer in Vladivostok. The indictment says that Nefedov falsely identified the ultimate buyer as a company in South Korea and the purchaser as a company in Hong Kong, when in truth and fact, he knew the snow machines were destined for Russia and end users in Russia.

The two are said to have set up an email account and cloud-based file sharing to conceal their activities.

Nefedov and Shumovich are charged the following offenses, which carry associated maximum penalties as follows: conspiracy to unlawfully export goods from the United States and defraud the United States (five years in prison); false electronic export information activities (five years in prison); smuggling (10 years in prison); unlawful export without a license in violation of the Export Control Reform Act (20 years in prison); and conspiracy to commit international money laundering (20 years in prison).

Nefedov is also charged with money laundering and making a false statement in violation of the Export Control Reform Act, which both carry maximum penalties of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI, HSI and Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement are still investigating other aspects of this case, which was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sanctions, export controls and economic countermeasures that the United States has imposed in response to Russia’s unprovoked military invasion of Ukraine.