First 'Near Miss' Non-Prosecution Agreement for DOJ National Security Division: Extreme Networks to Pay $975,721.84 Over Sales to Russian Weapons Maker
The U.S. Department of Justice announced on Oct. 27 that its National Security Division has entered into a non-prosecution agreement with networking equipment maker Extreme Networks, Inc., which agreed to pay criminal penalties totaling $975,721.84 to resolve an investigation into sanctions and export control offenses involving sales of networking equipment and services to a Russian weapons manufacturer. It is the first "near miss" non-prosecution agreement under the Department-wide Corporate Enforcement Policy.
The agreement was reached under the Department's 2026 Corporate Enforcement and Voluntary Self-Disclosure Policy, which incentivizes companies to voluntarily disclose discovered misconduct, cooperate with Department investigations, and timely and appropriately remediate the wrongdoing. A "near miss" case is one that involved full cooperation and appropriate remediation but did not qualify for a declination of prosecution. The Department said Extreme Networks' disclosure to the National Security Division was not timely, because it occurred under imminent threat of disclosure by a news publication, but the company nonetheless fully cooperated with the investigation and timely and appropriately remediated the misconduct, so its disclosure qualified as a "Near Miss" voluntary self-disclosure.
Under the agreement, Extreme Networks will forfeit $487,860.92 in proceeds from the sanctions and export control offenses and pay a criminal fine of $487,860.92, for a total criminal penalty of $975,721.84. The company will also resolve a parallel administrative action by the Treasury Department's Office of Foreign Assets Control (OFAC).
The case arose out of the company's sales to the Moscow Machinery Building Plant Avangard (MMZA), a Russian weapons manufacturer owned by JSC Concern Almaz-Antey, which OFAC added to the Specially Designated Nationals and Blocked Persons List in July 2014. MMZA was a primary producer of the S-300 and S-400 anti-aircraft missile systems used by the Russian army. Between around March 2018 and March 2022, Extreme Networks, through its then Russia-based subsidiary Extreme Networks Rus LLC, processed and fulfilled 11 purchase orders for networking equipment and services to MMZA without the required license or authorization from OFAC. Certain Russia-based employees concealed MMZA's identity from the company's global trade compliance group, causing the company to file false electronic export information through the Automated Export System and to smuggle goods from the United States. The Department said the company earned approximately $487,860.92 in revenue from the sales.
The Department said the company cooperated with the investigation by timely providing relevant facts and documents and making employees available for interviews, and appropriately remediated the misconduct by terminating its contract with the third-party distributor it used to facilitate the sales, improving its screening procedures, hiring additional compliance personnel, and implementing diligence procedures in connection with mergers and acquisitions. Given those steps and the lack of aggravating circumstances, the Department agreed to enter into the non-prosecution agreement.
Roman Rozhavsky, Assistant Director of the FBI's Counterintelligence and Espionage Division, said the non-prosecution agreement and near-million-dollar criminal penalty mark the successful resolution of the investigation into the illegal sale of advanced networking equipment and services to a Russian weapons manufacturer, and warned that those who attempt to arm U.S. adversaries by violating U.S. law will be brought to justice. Jeremy Pierczynski, Acting Special Agent in Charge of Homeland Security Investigations (HSI) Detroit, said HSI will continue working with law enforcement and regulatory partners to identify and hold accountable those who evade U.S. export controls and sanctions to provide goods or services to foreign weapons manufacturers. The case was investigated by the FBI's Charlotte Field Office, the Commerce Department's Bureau of Industry and Security, and HSI, and was prosecuted by former Trial Attorney Maria Fedor of the National Security Division's Counterintelligence and Export Control Section and Assistant U.S. Attorney Adam Hulbig for the Eastern District of North Carolina.
Extreme Networks is headquartered in Morrisville, North Carolina, designs, develops and manufactures wired and wireless network infrastructure equipment and related software, and trades on the Nasdaq Stock Market under the ticker EXTR.
Source: GSM · USA (original Chinese edition)
Photo: 图：Extreme Networks 公司标志。公共领域（PD），来源：Wikimedia Commons / Photo: Extreme Networks logo. Public domain (PD), via Wikimedia Commons
