Extreme Networks reaches US criminal deal over Russian weapons-maker sales
Extreme Networks has agreed to a US criminal penalty of $975,721.84 over sales to a sanctioned Russian weapons manufacturer. The Justice Department calls it its first near-miss agreement under a corporate disclosure policy. A separate Treasury settlement covers apparent sanctions violations; the criminal resolution credits the company’s cooperation and remedial work despite its late disclosure.
Extreme Networks, a North Carolina-based networking equipment and services company, has entered a non-prosecution agreement with the US Justice Department over sanctions and export control offenses involving a Russian weapons manufacturer. The company agreed to $975,721.84 in criminal penalties. The department described the 27 October resolution as its first near-miss agreement under its corporate enforcement and voluntary self-disclosure policy.[2], [3]
The total consists of $487,860.92 in forfeited proceeds and an equal criminal fine. The department said Extreme’s disclosure came under the imminent threat of a news publication revealing the conduct. It therefore did not qualify as timely self-disclosure, although the company’s subsequent cooperation and remediation qualified it for the near-miss treatment.[2]
Sales passed through the Russian subsidiary
According to the Justice Department, Extreme’s then-Russian subsidiary processed 11 purchase orders for Moscow Machinery Building Plant Avangard between about March 2018 and March 2022 without the required US authorisation. Avangard manufactured weapons and was owned by the sanctioned Almaz-Antey group. The department said Russia-based employees concealed the customer’s identity from Extreme’s global trade compliance team, leading to false electronic export information. It put revenue from the unlawful sales at approximately $487,860.92. Avangard was a primary manufacturer of the S-300 and S-400 anti-aircraft missile systems used by the Russian army. Almaz-Antey had been placed on the US blocked-persons list in July 2014.[2]
Treasury settles a parallel administrative case
Separately, the US Treasury’s Office of Foreign Assets Control, the sanctions authority known as OFAC, announced a $1,529,685 settlement. Its administrative account concerns nine exports of networking equipment and related services to Avangard between September 2018 and March 2022. OFAC said the apparent violations were voluntarily disclosed and egregious. The Justice Department’s criminal account credits Extreme with supplying facts and documents, making employees available for interviews, ending its distributor contract, improving screening and hiring compliance staff.[1], [2]
