US Company Discloses Potential Illegal Exports to Russia
A U.S. network equipment company may have illegally supplied products to a sanctioned Russian firm, the company said in a recent SEC filing. Extreme Networks said a former employee who now works for a Russian distributor sought to sell its products to MMZ Avangard, a state-owned military firm. Extreme Networks said it’s conducting an internal investigation and has “notified” U.S. regulators.
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The California networking equipment and software company said it discovered the sales after Reuters contacted it for a news story, which helped it “uncover actions taken by a former employee.” The company found that between 2018 and 2021 it sold products to a Russian distributor that was ordering on behalf of DEMZ, a front company for MMZ Avangard. After buying Extreme’s products, DEMZ transferred them to MMZ Avangard with the help of Extreme’s former employee, the company said, who “continued to perpetuate this scheme upon going to work for the distributor after being terminated by Extreme for performance issues.”
Extreme said the sales over five years totaled about $645,000, including legacy networking hardware used to “enable network connectivity.” The company said the sales figure was less than 0.01% of its global revenue during that time period. Extreme is using outside counsel to help with its investigation and “continues to review these matters including whether current and former employees may have been involved.”
A Commerce Department spokesperson said the agency doesn't comment on potential investigations.