Italian Arms Dealer Pleads Guilty to Illegally Exporting U.S. Ammunition Reaching Russia
Brooklyn, N.Y. — An Italian arms dealer pleaded guilty Monday in federal court in Brooklyn to conspiring to illegally export American-made ammunition that was ultimately sent to Russia and used in its ongoing war against Ukraine, U.S. officials said.
Manfred Gruber, director of sales for an Italian firearms and ammunition distributor, admitted to violating U.S. export control laws by shipping more than $540,000 worth of ammunition from the United States to Kyrgyzstan through shell companies under his control. Prosecutors said much of the ammunition was then reexported to Russia.
The plea, entered before U.S. Magistrate Judge Taryn A. Merkl in the Eastern District of New York, marks the latest development in an international investigation into the illicit flow of U.S.-made military supplies to Russia despite extensive sanctions and export restrictions.
“Gruber’s crimes helped sustain a bloody war that has claimed countless lives,” said John A. Eisenberg, Assistant Attorney General for National Security. “The Department of Justice is committed to holding accountable those illegally funneling weapons and ammunition to Russia’s war machine.”
According to court filings, Gruber and a co-conspirator in Kyrgyzstan, arms dealer Sergei Zharnovnikov, used multiple companies in Italy to conceal their illegal exports. Zharnovnikov was previously sentenced in January to 39 months in prison after pleading guilty to violating the Export Control Reform Act.
Federal investigators said Gruber purchased ammunition from U.S. manufacturers based in Nebraska and Tennessee under valid export licenses issued to his Italian company, which required that the shipments remain in Italy. Instead, the ammunition was routed through intermediary firms to Kyrgyzstan and later to Russia.
Gruber also allegedly used encrypted communications to coordinate shipments and conceal the final destinations. In one exchange cited in court documents, he advised a co-conspirator to split shipments so they would “go unnoticed.”
“The defendant used multiple companies to hide his scheme to send military‑grade ammunition to Kyrgyzstan, before it was reexported to Russia to support its war effort,” said Joseph Nocella, U.S. Attorney for the Eastern District of New York.
“We will continue working with our partners across law enforcement and the private sector to safeguard our national security by keeping American-made military supplies out of the hands of hostile nation-states,” said FBI Assistant Director Roman Rozhavsky.
Gruber faces sentencing at a later date.
Chinese National and Two Americans Charged in Plot to Smuggle AI Technology to China
Atlanta, Ga. — A Chinese national and two U.S. citizens have been charged with conspiring to illegally export millions of dollars’ worth of advanced computer chips used in artificial intelligence systems from the United States to China, federal authorities announced Wednesday.
According to the Justice Department, Stanley Yi Zheng, 56, of Hong Kong, and Americans Matthew Kelly, 49, of Hopewell Junction, New York, and Tommy Shad English, 53, of Atlanta, Georgia, sought to acquire export-controlled computer servers from a California hardware company and funnel them through Thailand for eventual delivery to China — a violation of U.S. export controls.
The men face charges of conspiracy to commit smuggling and export control violations, part of a growing U.S. crackdown on attempts to transfer sensitive technology to rival nations such as China.
“These cutting-edge AI chips represent the best of American innovation and years of strategic investment in maintaining our technological leadership,” said Assistant Attorney General for National Security John A. Eisenberg. “NSD is committed to protecting U.S. innovation and ensuring that those who violate export controls face serious consequences.”
Authorities said the group began the scheme in May 2023, using Thai corporate entities as fronts to conceal the chips’ final destination. In October that year, English, posing as a representative of a Thailand-based company, attempted to purchase 750 servers worth roughly $170 million from a U.S. manufacturer, 600 of which contained controlled AI chips that require a special license for export to China.
English allegedly signed certifications falsely declaring the equipment would not be shipped to China, prosecutors said. A subsequent partial payment of $20 million was made in January 2024, but the deal collapsed when compliance reviews raised questions about the apparent Chinese ties of the buyers.
Investigators obtained encrypted text messages showing the defendants discussing how to falsify business records, conceal links to China, and recruit others to help move the technology. In one exchange, Zheng warned Kelly, “Do not mention anything about China,” after Kelly drafted a message soliciting partners for the project and acknowledging that China was a “banned country for distribution.”
Zheng was arrested in California on March 22 and appeared before U.S. Magistrate Judge Lisa J. Cisneros on March 23. Prosecutors have moved to detain him without bail. Kelly and English surrendered to authorities on March 25 and made initial court appearances in New Jersey and Georgia.
“These defendants allegedly conspired to sell millions of dollars’ worth of American-made AI computer chips to buyers in China, in clear violation of U.S. export controls,” said Roman Rozhavsky, Assistant Director of the FBI’s Counterintelligence and Espionage Division. “As foreign adversaries ramp up their efforts to dominate the field of artificial intelligence, we are seeing increasingly brazen schemes to illegally acquire valuable U.S. technology.”
Prosecutors argue none of the attempted deals were completed, but the conspiracy risked undermining U.S. safeguards designed to prevent advanced AI hardware — including graphics processing units (GPUs) vital for military and defense applications — from reaching foreign adversaries.
The charges remain allegations, and the defendants are presumed innocent unless proven guilty
