SAN FRANCISCO - Naum Morgovsky and Irina Morgovsky were charged today for their respective roles in an alleged scheme to export components for the production of night vision rifle scopes in violation of the Arms Export Control Act, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The superseding indictment supplements bank fraud charges that were leveled in September of last year against Naum Morgovsky and Mark Migdal.
According to the superseding indictment, Naum and Irina Morgovsky owned night vision businesses in the United States and purchased numerous scope components including image intensifier tubes and lenses. The superseding indictment alleges the Morgovskys conspired to ship these items to a night vision manufacturing company in Moscow, Russia that was partly owned by Naum Morgovsky. The United States Munitions List prohibits export of the items unless the exporter obtains a license from the Department of State, Directorate of Defense Trade Controls. According to the superseding indictment, the Morgovskys did not have such a license.
In addition, the superseding indictment alleges the Morgovskys took steps to conceal their crimes so that they could continue to run their illegal export business undetected. According to the superseding indictment, Naum Morgovsky laundered the proceeds of the export conspiracy, used a bank account in the name of a deceased person to conceal the ownership and control of the scheme’s proceeds. The superseding indictment further alleges that Irina Morgovsky allegedly used a passport that she fraudulently obtained in the name of another individual to travel to Russia three times in 2007.
The superseding indictment includes the charges against Naum Morgovsky and Mark Migdal in the indictment filed in September of 2016. Specifically, the superseding indictment repeats that between June 2009 and April 2016, Morgovsky and Migdal conspired to defraud two federally-insured banks, now Bank of America and EverBank, by seeking those banks’ approval for a short sale of two condominiums owned by Migdal. The two condominium units were in the same building in Kihei, Maui. The superseding indictment alleges that Morgovsky and Midgal conspired to convince the banks to allow the properties to be sold in a short sale to an individual who was, in reality, deceased. A short sale is a sale in which a lender allows a property to be sold at a price that is less than the amount owed on the loan. According to the superseding indictment, the conspiracy also involved submission of false statements to the bank about Midgal’s employment status and income. After the banks approved the short sales in 2009 and 2010, Migdal continued to treat the property as his own, including collecting rent and paying taxes and homeowners’ association dues. The properties allegedly were transferred to Migdal’s wife in 2016.
In addition, the superseding indictment alleges that, during 2009 and 2010, Migdal submitted false statements to a federally insured bank. According to the superseding indictment, Migdal sought to obtain loan modifications for his residence in Portola Valley and his rental property in Mountain View by falsely stating he had rented part of his residence, by submitting a false employment offer letter, and by falsely stating his rental property in Mountain View was his principal residence.
In sum, the charges and maximum statutory sentences against Naum Morgovsky are as follows:
Count
Charge
Statue
Maximum Sentence
One
Conspiracy to Commit Bank Fraud
18 U.S.C. § 1349
30 years; $1,000,000 fine
Two
Bank Fraud
18 U.S.C. § 1344
30 years; $1,000,000 fine
Three
Bank Fraud
18 U.S.C. § 1344
30 years; $1,000,000 fine
Four
Aggravated Identity Theft
18 U.S.C. § 1028A
2 years consecutive to any other sentence; $250,000 fine
Nine
Armed Export Control Act Conspiracy
22 U.S.C. § 2778
20 years; $1,000,000 fine
Ten
Money Laundering
18 U.S.C. § 1956(a)(1)(B)(i)
20 years; $500,000 fine or twice the value of funds involved
Eleven
International Money Laundering
18 U.S.C. § 1956(a)(2)(A)
20 years; $500,000 fine or twice the value of funds involved
The charges against Irina Morgovsky are as follows:
Count
Charge
Statue
Maximum Sentence
Six
Misuse of Passport
18 U.S.C. § 1544
10 years; $250,000 fine
Nine
Armed Export Control Act Conspiracy
22 U.S.C. § 2778
20 years; $1,000,000 fine
The charges against Mark Migdal are as follows:
Count
Charge
Statue
Maximum Sentence
One
Conspiracy to Commit Bank Fraud
18 U.S.C. § 1349
30 years; $1,000,000 fine
Two
Bank Fraud
18 U.S.C. § 1344
30 years; $1,000,000 fine
Three
Bank Fraud
18 U.S.C. § 1344
30 years; $1,000,000 fine
Five
Aggravated Identity Theft
18 U.S.C. § 1028A
2 years consecutive to any other sentence; $250,000 fine
Seven
False Statement to Federally Insured Financial Institution
18 U.S.C. § 1014
30 years; $1,000,000 fine
Eight
False Statement to Federally Insured Financial Institution
18 U.S.C. § 1014
30 years; $1,000,000 fine
Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. The Superseding Indictment also seeks forfeiture of the false passport, a residence in Portola Valley, a condominium in Mountain View, and the two Hawaii condominiums.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The defendants are scheduled to be arraigned on the superseding indictment on Tuesday, May 2, 2017, at 9:30am, before the Honorable Jacqueline Scott Corley, United States Magistrate Judge.
The case is being prosecuted by the Special Prosecutions and National Security Unit of the United States Attorney’s office in San Francisco and the Counterintelligence and the Export Control Section of the Department of Justice’s National Security Division. The prosecution is the result of an investigation by the Federal Bureau of Investigation, Internal Revenue Service, Criminal Investigation, and the Department of Commerce.
Source: U.S. Department of Justice, Federal Bureau of Investigation (FBI)
