US charges Italian dealer over $540,000 illegal arms exports to Russia

An Italian arms dealer is being held in jail after pleading guilty to illegally exporting more than $540,000 (€461,000) worth of US ammunition to Russia via Kyrgyzstan, using Italian companies to circumvent export controls, the US Department of Justice revealed.

Manfred Gruber, a sales manager at a large Italian firearms distributor, appeared before US Magistrate Judge Taryn A Merkl for the Eastern District of New York on 30 March and admitted to conspiracy to commit export control violations.

Prosecutors said Gruber purchased ammunition from US suppliers and re-exported it from Italy to Kyrgyzstan in violation of Department of Commerce licences that required the ammunition to remain in Italy. Most of the ammunition was then sent onward to Russia.

Gruber’s co-conspirator, Sergei Zharnovnikov, a Kyrgyzstan-based arms dealer, was sentenced to 39 months in prison in January after pleading guilty to violating the Export Control Reform Act by sending US-made firearms and ammunition to Russia. 

"Gruber’s crimes helped sustain a bloody war that has claimed countless lives," said Assistant Attorney General for National Security John A Eisenberg. "The National Security Division is committed to holding accountable those who illegally channel weapons and ammunition to the Russian war machine."

Roman Rozhavsky, assistant director of the FBI’s Counterintelligence and Espionage Division, said Gruber "put many lives at risk by illegally supplying Russia with American-made military-grade munitions worth hundreds of thousands of dollars to advance its war in Ukraine".

"Today’s guilty plea demonstrates the grave consequences of violating US export controls and the FBI’s commitment to prosecuting those who illegally fuel the war efforts of our foreign adversaries," Rozhavsky said. 

How the scheme worked

US Attorney Joseph Nocella for the Eastern District of New York said Gruber used multiple companies to conceal his plan to send military-grade munitions to Kyrgyzstan before they were re-exported to Russia.

Court documents show Gruber did not apply for, obtain or hold any licence to export or re-export ammunition to Kyrgyzstan.

A Nebraska-based US company held a licence to export ammunition to Gruber’s Italian employer, but the licence required that the ammunition remain in Italy. Gruber used a front company to re-export the ammunition to Zharnovnikov in Kyrgyzstan.

A contract found on Zharnovnikov’s phone showed he had entered into an agreement with a Russian company for ammunition manufactured by the Nebraska supplier.

A second US company based in Tennessee also had a licence to export ammunition to Gruber’s employer in Italy with the same restriction. Gruber also re-exported this ammunition from Italy to Kyrgyzstan.

Encrypted messages

Prosecutors presented encrypted chat messages from 23 September 2023 between Gruber and an unidentified co-conspirator who has not been charged.

When the co-conspirator asked about delivering 100,000 bullets from the Nebraska supplier, Gruber wrote that he needed a few days to respond and asked whether the entire shipment had to be delivered at once.

"I’m asking because of the possible destination," Gruber wrote. "They caught the Slovenian distributor who had triangulated with Russia... FBI International."

The co-conspirator said the request came from an Armenian customer and the shipment could be split.

"I would say it would be better, so it goes unnoticed," Gruber replied, followed by a winking emoji.

David Peters, assistant secretary for export enforcement at the Commerce Department, said the guilty plea demonstrates the government’s commitment to "vigorously enforcing US export control laws".

Gruber faces sentencing at a later date. The maximum penalty for conspiracy to violate export controls is five years in prison.