From venture investment to strategic missile transport: Boston FBI warns US tech community of possible scams by “malicious Russian investors”
In a bid to “educate the private sector and raise awareness about economic espionage and cyber counterintelligence,” FBI special agents Lucia M. Ziobro and Vincent B. Lisi warned Boston-area businesses and academic institutions earlier this month of “scams involving malicious [Russian] venture capitalists.”
The warning took the form of a notification to local players and an op-ed published in the Boston Business Journal. The text urged those contacted by Russian venture capitalists “to remain vigilant and cognizant of the potential losses and compromises of company assets.”
The matter is especially sensitive in the Boston area, which has one of the nation’s highest concentrations of technology companies – many of which support the defense industry, noted Ziobro.
The Boston FBI believes that “the purported reasons offered by the Russian partners mask their true intention, [which] is to gain access to classified, sensitive and emerging technology from the companies.”
These Russian partners, whose offers “may seem lucrative at first,” are “often funded by their government,” Ziobro claimed.
Boston FBI agents Lucia M. Ziobro and Vincent B. Lisi (Photo credit: Boston Business Journal)
Other parts of the warning seem less assertive, with the FBI defining its action as “new intelligence-led policing.” Since 9/11, the FBI says it has aimed to “detect and deter crimes before they are committed by anticipating crime trends through sound analysis.”
FBI analysts and agents have thus “reviewed the pattern to discern the factors and motivations behind the sudden emergence of Russian government-funded businesses increasing their footprint in Boston and Silicon Valley.”
One of these businesses is the Skolkovo Foundation, which was created in 2010 by then-president Dmitry Medvedev to develop a major tech hub on the outskirts of Moscow. The Boston FBI openly suspects this organization of serving as “a means for the Russian government to access our nation’s sensitive or classified research, development facilities and dual-use technologies with military and commercial applications” – a conclusion that is “supported by reports coming out of Russia itself,” Ziobro asserted.
“According to news reports, in the fall of 2013 the Foundation signed an agreement with the Russian vehicle manufacturer Kamaz,” Ziobro noted. “Kamaz is also a Russian defense contractor who supplies the Russian military with armed and armored vehicles and was scheduled to deliver more than 100 all-terrain transports to the Russian strategic missile troops last year. The agreement enabled Kamaz to establish a research and development facility in the Skolkovo ‘innovation city’ located near Moscow. The FBI is concerned that Kamaz will provide Russia’s military with innovative research obtained from the Foundation’s U.S. partners.”
No other specific cause for suspicion was mentioned in the op-ed.
Ziobro also touched on the Foundation’s “history of corruption” in a reference to the recent scandals that have tarnished Skolkovo’s reputation: “The Foreign Corrupt Practices Act prohibits U.S. firms from engaging in corrupt activities overseas,” the FBI agent observed.
The RVC fund of funds and nanotech giant Rusnano – two other Russian state-owned tech-oriented organizations active in the Boston area and Silicon Valley – were not targeted explicitly. Neither did Ziobro mention the private Russian funds that have been investing in U.S. startups on a large scale over the past few years.
Helping entrepreneurs is not spying
The institutions in question did not endorse the FBI’s suspicions.
In an exchange with East-West Digital News, the Skolkovo press service quoted MIT professor Bruce Tidor as saying: “MIT’s collaboration with Skoltech and the Skolkovo Foundation is intended to help create a new institutional paradigm, bringing together education, research and innovation. Programs such as Skoltech are intended to build intellectual relationships in a transparent environment, centering on open, fundamental, publishable research. In this, as in all our international collaborations, MIT is very careful to comply with all U.S. export-control regulations.”
Dmitry Akhanov, CEO of the USA branch of Russian state tech corporation Rusnano (which has invested $1.2 billion in American companies in the past four years), was shocked by the FBI’s statement: “I actually thought it was an April Fool’s joke. I had to check the date. No one has ever suspected us of any wrongdoing, and no, I’m not a spy,” Rusbase quoted him as saying.
As for RVC’s U.S. branch, it is “engaged in helping young Russian entrepreneurs understand the requirements for commercialization of their technologies in the U.S. market, and finding potential business partners for them in the U.S.,” CEO Axel Tillman stated.
An RVC Moscow executive displayed a note of hope in an exchange with East-West Digital News. “We are confident that Russian VCs and U.S. companies will remain good business partners, and hope that the surprising Boston article will not receive official confirmation,” he said.