Before US sanctions violations arrest, Russian businessman faced charge in Hong Kong

 

When the U.S. Department of Treasury imposed sanctions on three companies belonging to Denis Postovoy on Wednesday, it was yet another move to break up what U.S. authorities say was an international scheme to violate sanctions.

A month earlier, on September 16, law enforcement officials arrested the 44-year-old Russian national in Sarasota, Florida.

He was charged with conspiring to violate sanctions on Russia, commit smuggling, commit money laundering and defraud the United States.

According to the indictment, Postovoy used an international network of companies to export dual-use microelectronic components from the United States to Russia –– potentially spare parts for military drones used in the Kremlin’s war against Ukraine.

 

Denis Postovoy

Postovoy is not the first Russian charged with violating U.S. export controls. But he is one of the few who allegedly did it from inside the United States.

Using court documents and open-source information, VOA pieced together Postovoy’s history, revealing a story involving international trade, criminal charges in two countries, a U.S. startup and Florida real estate.

Postovoy pleaded not guilty to all the charges. If convicted, he could face decades in prison.

Postovoy is in pretrial detention and could not be reached for comment. His lawyer did not respond to a VOA request for comment. When VOA reached Postovoy’s wife by phone, she hung up. She did not respond to questions sent to her on the WhatsApp messenger app.

According to the latest court filings, Postovoy’s case was transferred to the U.S. District Court in Washington.

American charges

After Moscow launched its full-scale invasion of Ukraine on Feb. 24, 2022, the U.S. significantly expanded restrictions on the export of microelectronics to Russia.

 

Denis Postovoy timeline

The Department of Justice has accused Postovoy and several unnamed co-conspirators of using a network of companies under their control in Hong Kong, Switzerland and Russia to violate those sanctions.

It claims Postovoy misrepresented the buyers and destinations of the goods, routing them through Hong Kong, Switzerland, Turkey and Estonia.

“As alleged, he lied about the final destination for the technology he was shipping and used intermediary destinations to mask this illegal activity,” U.S. Attorney Matthew M. Graves stated in a press release. “Fortunately, our skilled law enforcement partners at HSI [Homeland Security Investigations] and our dedicated attorneys unraveled the plot.”

The prosecution states that Postovoy’s clients included the Russian company Streloi Ekommerts and other unnamed firms. According to the indictment, the contract with Streloi was completed before the company was added to the U.S. sanctions list in December 2023.

An investigation by Radio Free Europe/Radio Liberty found that Streloi actively helps Russia circumvent Western export restrictions.

Another recipient of the microelectronics, according to an invoice included in the case materials, was the Russian technology company Radius Avtomatika.

Neither company responded to emailed questions from VOA.

It is unclear whether the microelectronics Postovoy allegedly exported were ultimately used in drones, but one court document states that the people he contacted were members of Russia’s military-industrial complex.

Hong Kong story

Originally from Novosibirsk, Russia, Postovoy had lived in Hong Kong since at least 2010 with his wife — a Ukrainian citizen from Crimea — and their three children.

Shipping records indicate his companies were involved in exporting goods from Hong Kong, a special administrative region of China, to Russia. Prosecutors allege that after the U.S. expanded its sanctions, some of this activity became illegal.

When the DOJ announced Postovoy’s arrest, it also listed the names of his companies that it said were involved in the alleged scheme. Aside from the Russian-registered firm Vektor Group, all the others were in Hong Kong: Jove HK Limited, JST Group Hong Kong and WowCube HK Limited.

All are now under U.S. sanctions, except for WowCube HK Limited.

Its appearance in the indictment provoked a rapid response from Cubios, another company previously associated with Postovoy. It produces the WOWCube gaming console, wich looks like a Rubik’s cube with multiple screens.

• •  

  Just a day after Postovoy\’s arrest was announced, Cubios publicly denied any connection to WowCube HK Limited.

  “Neither Cubios nor any of its officers, directors, managers or employees … have any connection to the HK Entity whatsoever. We do not own, operate or are in any way affiliated with the HK Entity,” the company said in a statement on its website.

  The startup also said that Postovoy “falsely listed himself as a VP of the Company” on LinkedIn.

  In fact, Postovoy was previously Cubios’ vice president for production, according to archived versions of its website.

  

   

  Denis Postovoy is listed as vice president of manufacturing in the archived version of the WowCube gadget website dated Dec. 1, 2022.

  Ilya Osipov, CEO of Cubios, told VOA that a mutual friend introduced him to Postovoy.

  “I was looking for someone who could help with production in China — they gave me Denis,” he wrote in a message to VOA.

  According to Osipov, Postovoy became a business partner and made important contributions to prototypes and test batches of the WOWCube. Later the company decreased cooperation with him.

  Although Postovoy did not have an official position, Cubios allowed him to call himself the vice president of production “for business purposes,” Osipov told VOA.

  He claimed that Postovoy founded the Hong Kong firm without Cubios’ permission. It was planned to become a distributor of the consoles in Asia, but that never happened, Osipov said.

  Coming to America

  In 2022, Postovoy and his family moved to Sarasota, Florida, where Cubios\’ headquarters is.

  According to Osipov, Postovoy said the move was motivated by a desire to raise children in a Western country and concerns about increasingly strict Chinese control of Hong Kong.

  American prosecutors see a different motivation.

  In a response to U.S. federal investigators included in the case materials, Hong Kong police said Postovoy was charged on March 1, 2022, with money laundering — a crime punishable by up to 14 years in prison and a fine of up to $643,000.

  According to the email, Postovoy was scheduled to appear in court on March 4 but left Hong Kong the day before.

  Hong Kong police did not respond to VOA’s request for comment.

  By June 2022, Postovoy\’s wife purchased a house in southeastern Sarasota.

  Sarasota County property records indicate the house was valued at around $980,000. A mortgage covered $680,000 of the cost.

  In August 2023, Postovoy bought another house, in the new Rivo Lakes gated community in Sarasota. According to purchase documents, it cost $1.13 million. In September, he transferred it to a trust controlled by his wife.

  On the same day, his wife transferred the house to another trust and later sold the property.

  According to a U.S. magistrate judge, Postovoy\’s decision to transfer the second house into a trust was likely an attempt to conceal his ownership.

  He “did not list his home — which is valued at nearly a million dollars and held in the name of a trust controlled by his wife — on his financial affidavit submitted to this Court,” the judge wrote in a decision not to grant Postovoy bail.

  This may not be the only attempted cover-up in the case: Russian company records indicate that, in December 2023, a man named Dmitry Smirnov replaced Postovoy as owner of his Vektor Group company.

  VOA’s Cantonese Service contributed research to this story.

   

  By：VOA