20 – The Kanaev Affair

Tsvetan Kanev was less successful than Brazhnikov and his son, as detailed in Case Study 19. Tsvetan Kanev was indicted for violation of the International emergency Economic Powers Act and unlawful smuggling after he attempted to buy clock drivers and other controlled items and send them to Russia without a license. Mr. Kanev’s scheme fell apart when an attempt by Mr. Kanev to buy radiation hardened circuits from a U.S. supplier failed. Mr. Kanev claimed the circuits were for the Bulgarian Academy of Sciences. However, the American supplier of radiation hardened chips tipped off the U.S. government to the attempt. Mr. Kanev ultimately explained his failed scheme to government informants.[1]

In the scheme, Mr. Kanev was to transship the components to Bulgaria first, and then transship them to Russia via Finland. Finland has historically been a transshipment point of interest given its friendly relations with the West with easy access via land and water to Russia’s second city, Saint Petersburg. Mr. Kanev was to use falsified end user agreements in combination with multiple transshipment points.[2]