Toronto address listed shipping $80M of electronics for ‘Russian war machine’

A Caribbean shell company has smuggled at least $80 million worth of electronics into Russia under the disguise of a Canadian address, according to leaked Russian trade filings obtained by CBC News.

The scheme appears to be part of a Kremlin initiative involving a covert web of multinational buyers and producers that source sanctioned technologies from Western countries, the majority of which come from Chinese stockpiles and manufacturers, to help produce weapons for Russia’s war with Ukraine.

“My initial reaction was that this looked like a really egregious breach of [Canada’s sanction regime],” said Jessica Davis, an Ottawa-based financial crimes expert who viewed the data and previously worked with the Canadian Security Intelligence Service.

“It seemed really surprising that somebody would be so blatant about facilitating these kinds of goods to Russia, particularly in the context of the Russia-Ukraine war.”

Two separate sources, one from a government agency and the other an academic watchdog, provided the 2023 import data, which was then cross-referenced for its authenticity by two experts. CBC News has agreed to keep the sources confidential to protect against retribution from the Russian government.

Alburton Enterprises Inc. is one of the top Canadian entries in the trade filings and uses a suburban Toronto residence as the “supplier address” for more than 1,400 deals involving microelectronics and other computer components.

The imports show a common theme: Russian front companies shielding direct business with Chinese manufacturers to protect the flow of precious microelectronics from seizure and keep Chinese companies out of a risky venture upsetting Western business partners.

The Biden administration has repeatedly warned Beijing against supplying the Kremlin with weapons, a charge China has denied. But in recent months, China has come under fire after some of its microelectronics slipped into Russia.

Davis said using a Canadian entity like Alburton could be a way to obfuscate “scrutiny from U.S. law enforcement,” because having a “Canadian address and a Canadian company can sometimes lend a veneer of legitimacy to companies doing this kind of business.”

In a statement to CBC News, the RCMP, which investigates Canadian sanctions violations, said it has not laid charges relating to the export of microelectronics into Russia.

Agent for service

While Alburton has no website or extensive online presence indicating its business or origins, Ontario government records show it was first incorporated in the British Virgin Islands in 2012 and then obtained an extra-provincial licence in 2015 to operate as a foreign business in the province.

Alburton appears to use its status as a quasi-Canadian company to buy components made by tech industry giants like Samsung, Huawei, Intel and H3C from China, Taiwan (the global leader in microchips) and Malaysia, among others.

It appears to transport them, under the Alburton banner, to one of two Moscow-based computer companies: Rubion, which says it is accredited by the Russian government, and Obltransterminal LLC, a company under U.S. sanctions for providing equipment to the Russian military.

The Ontario records named Edward Poberezkin as Alburton’s agent for service, meaning an appointee responsible for receiving notarized mail on behalf of a company in Ontario. His residence is the same address on the Russian customs data.

Poberezkin helmed at least three other companies in Ontario, which also don’t have websites and list his home as their address. Property records show an individual with the last name Poberezkina as the homeowner since 1998.

Poberezkin confirmed to CBC News that he was Alburton’s agent for service, but said he hadn’t been in contact with the company in nine years.

“My address is part of the public record, and unfortunately, I cannot control if anyone decides to use it,” said Poberezkin via email, adding that he had no knowledge of the “financial or business activities” of the company. He declined multiple interview requests.

The same Ontario records detail the murky origins of Alburton in the British Virgin Islands, which has become synonymous with international money laundering, and contains incorporation documents naming Australian national Christalla Kirkillari as its first director. She is connected online with more than 360 companies worldwide and operated in Cyprus, another global hotbed for financial crimes and tax evasion, where one of her official business addresses was located.

Kirkillari, who is publicly linked with Russian business people and has at least one Moscow business address, is mentioned in more than 700 confidential documents in the Offshore Leaks, a database of secret financial and legal files shared with CBC News. The Offshore Leaks, which has a publicly facing website where Kirkillari is searchable, has linked a trail of billions in dark money to Russian President Vladimir Putin and the Kremlin.

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Kirkillari is a business associate of two men implicated in another recent scheme to smuggle technologies into Russia. In May, Slovak newspaper Pravda connected London businessmen Vladimir Pristoupa with Olech Tkacz and his Slovakian front company in selling software and computer components to Russian clients who subsequently supplied them to their military, which the U.S. Department of Treasury then sanctioned.

While open source records show Pristoupa and Kirkillari both worked in at least three of the same companies, all three of them are named as current or former officers at London-based Backriver Limited, which specializes in “scientific and technical activities.” Backriver does not have a website.

Emails to the Russian Ministry of Foreign Affairs about Alburton, Kirkillari and the smuggling of microelectronics into the country went unanswered.

Russia uses front companies to procure parts

Since the dawn of Russia’s full-scale invasion of Ukraine in February 2022, continuous sanctions from Canada and its allies have challenged Russia’s military-industrial complex. In defiance, the Kremlin has constructed shadowy global networks of middlemen buying predominantly Chinese technologies or Western technologies made in China.

In much the same way drug traffickers wash illicitly obtained currencies in a complex series of transactions to hide their movements, Russia has sourced items as simple as a semiconductor from China, unconnected to the business of war, that ends up in a glide bomb.

“We’ve been putting parties in third countries on our entity list who are sort of complicit in participating in the transshipment of items, and of the chips to Russia. And that includes companies in China,” said Matt Axelrod, assistant secretary for export enforcement at the U.S. Department of Commerce.

Axelrod leads the Disruptive Technology Strike Force, a unit assembled one year into Russia’s total invasion of Ukraine and designed to prevent in-demand electronics from ending up in enemy hands. His team has laid charges in at least 16 cases involving the illegal export of parts to Russia.

“We’ve also made very clear in conversations with the Chinese that this is a problem and that we need their help in making sure that we make progress on it,” he said.

The Russian import data reflects the same: Alburton appears to never have purchased or sent Canadian-made technologies to Russia from Canada, but purchased components from China and other countries in the South Pacific, then shipped them to Russia using their status as a Canadian supplier.

Other open source evidence shows questionable transactions logging Alburton importing microprocessors and other electronics to Rubion in 2017 and 2023.

Other open source links point to it exporting materials with Hong Kong tech company Brukida Limited.

In an email, a director at Brukida categorically denied any involvement with Alburton and was adamant the company “has never worked with” or even “heard of Alburton” before.

“I am led to believe somebody must have deceptively used our company name in correspondence or some kind of trade documents.”

Axelrod believes Russia’s clandestine pursuit of microelectronics is a Kremlin directive.

“I don’t think this is just individual entrepreneurs in Russia that are obtaining these parts,” he said. “This is a government-sponsored … effort to procure items for the Russian war machine.”

In one recent U.S court filing, the Department of Justice said the FBI was investigating the “illegal procurement of sensitive technology for the benefit of the Russian government, including its military and intelligence services.”

Alburton’s unknown ownership

So who actually owns and operates Alburton?

The British Virgin Islands government requires the collection of ownership records on incorporated entities operating under its jurisdiction, but that information is publicly inaccessible.

As of March 2024, Kirkillari was still named as the director of Alburton. But after multiple CBC requests for comment that went unanswered, the directorship changed to Elmarie Ibanez, a South African national who is also mentioned in more than 700 documents in the Offshore Leaks. She and Kirkillari are listed together as former directors of the now-defunct London company Production Investment Management Ltd.

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Ibanez did not return requests for comment. Email tracking software showed Kirkillari viewing the emails from CBC News at least 14 times, twice showing them being opened in an unknown location in Moscow.

CBC News asked Poberezkin multiple times to provide contacts for the owners of Alburton, as he would be required as agent for service to have that information. He never responded.

The BVI government said it complies with the U.K.’s sanctions protocols and suspected breaches are investigated by its Financial Investigation Agency, but it does “not comment on individual breach reports received.”