Russian National Pleads Guilty in $2m Aerospace Export Scheme: Why End-User Due Diligence Matters

A Russian national has pleaded guilty in the United States to participating in a scheme that illegally exported nearly $2 million of U.S.-origin aviation and aerospace components to Russia.

According to the U.S. Department of Justice, Andrei Samuilovski conspired with others to supply prohibited Russian end users with export-controlled aerospace products without obtaining the required licenses.

The case highlights an important risk for U.S. companies involved in international trade.

A customer or intermediary may appear legitimate, but the ultimate destination or end user of a product can be very different from the information initially presented.

For businesses operating across multiple jurisdictions, effective due diligence therefore needs to consider not only who is buying a product, but also who ultimately receives, controls or benefits from it.

What Happened?

The Department of Justice says Samuilovski was a co-founder of ITC Middle East FZ-LLC, a company established in March 2022, shortly after Russia’s invasion of Ukraine and the introduction of expanded U.S. and international export restrictions.

According to court documents, between 2022 and September 2024, dozens of shipments from U.S. companies were sent to ITC.

The products consisted primarily of U.S.-origin aerospace-related goods subject to export controls.

Their cumulative value was nearly $2 million.

DOJ says the items were ultimately re-exported to Russia.

Samuilovski pleaded guilty to conspiracy to violate the Export Control Reform Act and is scheduled to be sentenced in January 2027.

Why End-User Due Diligence Matters

In international transactions, the immediate buyer is not always the ultimate end user.

A company may purchase goods on behalf of another business.

A distributor may resell products into another market.

A logistics provider may route goods through several jurisdictions.

An intermediary may also be used to obscure the final destination.

This creates a significant compliance and commercial risk.

A transaction can appear routine at the first stage while the wider supply chain creates exposure to sanctions, export controls or other regulatory restrictions.

Effective due diligence should therefore ask:

• Who is the direct customer?
• Who owns or controls that customer?
• Who is the ultimate end user?
• Where will the goods physically be delivered?
• Is the stated destination consistent with the customer's business?
• Are there unusual intermediaries in the transaction?
• Does the transaction involve a high-risk jurisdiction?
• Is there any reason to suspect onward shipment?

These questions are particularly important where products are sensitive, high value or subject to licensing controls.

Intermediaries Can Increase Risk

Intermediaries are common in international trade and are not inherently suspicious.

They can provide legitimate logistical, commercial and distribution services.

However, they can also make a transaction more difficult to understand.

Where multiple entities are involved, businesses need to determine whether each party has a legitimate role.

Warning signs may include:

• A recently incorporated company with limited operating history.
• A customer whose business activities do not match the goods being purchased.
• Unusual routing through multiple jurisdictions.
• A lack of transparency around ownership.
• Requests to alter shipping documents.
• Payment from unrelated third parties.
• Reluctance to identify the final customer.
• Transactions that do not fit the buyer's normal commercial profile.

No single factor proves wrongdoing.

However, combinations of unusual characteristics should be investigated before a transaction proceeds.

A Company's Age and History Can Be Relevant

The DOJ case is particularly notable because ITC was established in March 2022, shortly after major sanctions and export restrictions relating to Russia were expanded.

A recently formed company is not automatically high risk.

Many legitimate businesses are newly incorporated.

However, where a new entity begins purchasing controlled or sensitive products shortly after restrictions are introduced, it may justify closer scrutiny.

Due diligence can help establish:

• When the company was incorporated.
• Who its directors and owners are.
• Whether those individuals have other business interests.
• Whether the company has a credible trading history.
• Whether its stated activities align with the transaction.
• Whether there are links to higher-risk jurisdictions or restricted entities.

Conflict International USA’s Due Diligence services support organizations with independent research into companies, ownership structures, commercial relationships and other material risks before transactions proceed.

Beneficial Ownership Can Be Critical

Understanding beneficial ownership is another important part of counterparty risk.

A company name alone may reveal very little about who controls it.

Ownership can be structured through:

• Holding companies.
• Nominees.
• Offshore entities.
• Family members.
• Business associates.
• Multiple corporate layers.

These structures can be legitimate.

However, where sanctions or export controls are relevant, understanding who ultimately owns or controls an organization can be essential.

A company may not appear on a restricted-party list while still being connected to individuals or entities that create regulatory risk.

This is why due diligence should look beyond surface-level corporate information.

The Final Destination Should Make Commercial Sense

Another important question is whether the stated destination is consistent with the transaction.

For example, if aerospace components are being purchased by a company in a jurisdiction with limited aviation activity or little obvious commercial need for those products, further verification may be appropriate.

Businesses should consider:

• Why the customer needs the goods.
• Whether the quantity is commercially reasonable.
• Whether the destination matches the customer's operations.
• Whether the buyer has the technical capability to use the products.
• Whether onward resale is expected.

The objective is not to treat unusual transactions as automatically suspicious.

It is to identify situations where the commercial explanation does not align with the available facts.

U.S. Suppliers Can Still Face Indirect Exposure

The DOJ release does not suggest that the U.S. suppliers involved knowingly participated in the scheme.

That distinction is important.

Businesses can become exposed to sanctions or export-control risk even where they are not themselves involved in wrongdoing.

A company may receive misleading information from a customer or intermediary.

That is why strong compliance processes are designed to identify risk before goods leave the supply chain.

The appropriate level of due diligence should reflect:

• The nature of the product.
• The countries involved.
• The value of the transaction.
• The customer profile.
• The presence of intermediaries.
• The regulatory environment.

Higher-risk transactions may justify enhanced verification.

Third-Party Due Diligence Is Not a One-Off Exercise

Risk can also change after a commercial relationship begins.

A customer may change ownership.

A distributor may begin selling into different markets.

A previously low-risk jurisdiction may become subject to new restrictions.

This means due diligence should not always end when a customer is first onboarded.

Organizations may need to reassess counterparties when:

• Ownership changes.
• Trading patterns change.
• New jurisdictions become involved.
• Unusual transactions appear.
• Regulatory restrictions change.
• New adverse information emerges.

The frequency and scope of any review should be proportionate to the risk.

What U.S. Businesses Should Consider

The Samuilovski case provides a useful reminder for companies involved in international supply chains.

Before completing a higher-risk transaction, organizations should consider whether they understand:

• The customer.
• The beneficial owner.
• The final destination.
• The end user.
• The role of any intermediary.
• The commercial purpose of the transaction.
• Relevant sanctions or export-control exposure.

These checks should be supported by independent information wherever possible.

Documents supplied by the customer can be useful, but they should not always be treated as sufficient evidence on their own.

Due Diligence Helps Establish the Wider Picture

The key lesson from the DOJ case is not simply that sanctions can be breached.

It is that complex supply chains can obscure who ultimately receives controlled goods.

A direct customer may only be one part of a wider network.

For U.S. businesses trading internationally, effective due diligence can help identify ownership, understand commercial relationships and establish whether a transaction is consistent with the stated purpose.

That is particularly important where high-risk jurisdictions, controlled products or multiple intermediaries are involved.

If your organization requires independent due diligence on a customer, distributor, intermediary or international counterparty, Conflict International USA can help establish ownership, commercial relationships and potential risk indicators before a transaction proceeds. Contact our team to discuss your requirements confidentially.