Russian businessman’s Kremlin ties could prove intelligence ‘gold mine’ for US, former official says

By Sean Lyngaas, CNN

A Russian businessman who appeared in US court Monday on securities fraud charges could be a valuable asset in US efforts to gather more information on Russian interference in the 2016 election as well as other intelligence operations, former US officials tell CNN.

Former Justice Department and Homeland Security officials say that Vladislav Klyushin‘s Moscow-based cybersecurity firm’s work with the Russian government and Klyushin’s alleged relationship with an ex-Russian GRU military intelligence officer will likely be of keen interest to US law enforcement and intelligence officials.

The Russian businessman, who is in his early 40s, made an appearance in federal court in Massachusetts via videoconference on Monday in what was supposed to be an arraignment hearing. But Klyushin’s US-based lawyer, Maksim Nemtsev, did not file the requisite paperwork for the hearing to proceed, according to Magistrate Judge Marianne Bowler. The arraignment hearing is now slated for Wednesday.

US prosecutors have accused Klyushin and four other Russian men of an elaborate insider trading scheme that involved hacking into companies that Tesla and other firms used to file Securities and Exchange Commission reports.

The US government has not publicly connected Klyushin to Russian interference in the 2016 election. But one of Klyushin’s co-defendants in the securities fraud case is Ivan Ermakov, who was one of a dozen GRU officers whom a federal grand jury indicted in 2018 for interfering in the 2016 election by hacking and leaking documents from the Democratic National Committee.

Klyushin’s case is just the latest high-stakes US pursuit of a Russian national with potentially illuminating connections to Russian hacking activity targeting US interests.

Christopher Krebs, former head of the US Cybersecurity and Infrastructure Security Agency, called Klyushin’s arrest and prosecution a potential “gold mine” for US intelligence because it could shed additional light on GRU operations against the US and its allies. “This is a big get for a few reasons: If he flips, he may be able to confirm the intelligence community’s findings about Russian efforts to interfere in the 2016 election,” Krebs told CNN.

Even if Klyushin doesn’t cooperate, Krebs said, a conviction on the charges of securities fraud could send “a strong signal to others like him that they don’t have a whole lot of freedom of movement outside Russia.”

Oliver Ciric, a Switzerland-based lawyer for Klyushin, told CNN in an email that his client denies the US securities fraud allegations and other US charges and “intends to use all available legal remedies in order to ensure his defense.”

Ciric said that US intelligence officials had tried to recruit Klyushin in the south of France in 2019 and that British intelligence did the same in Edinburgh, Scotland, in 2020. Ciric declined to elaborate on the incidents, which Bloomberg News first reported.

The US Office of the Director of National Intelligence did not immediately respond to Ciric’s statement. The UK Foreign Office declined to comment to CNN.

From the Alps to a Massachusetts jail

Klyushin was arrested in Switzerland in March 2021 while on a ski vacation with this family, according to Ciric. Klyushin was extradited to the US last month, where he now faces hacking and securities fraud charges for his alleged role in the multimillion-dollar scheme between 2018 and 2020.

US prosecutors accuse Klyushin, Ermakov and their co-conspirators of using access to the non-public financial records to make tens of millions of dollars on stock trades.

Ermakov worked at Klyushin’s firm, M-13, which claims to offer “IT solutions to the Presidential Administration of the Russian Federation,” among other government agencies, according to its website.

Klyushin wrote to Ermakov, whom the Justice Department describes as a now-former GRU officer, in May 2019 describing the nearly $1 million in profits the scheme had netted for one account over the previous seven months, according to the US indictment.

Ermakov could not be reached for comment. M-13 did not respond to CNN’s request for comment.

Ciric previously told CNN that the US indictment and extradition were “disingenuous” and alleged that “the real reason” for Klyushin’s arrest and extradition “is in connection with the nature of his work for and contacts within the Russian government.”

Kellen Dwyer, a former US deputy assistant attorney general, said Klyushin looked like a natural target for US investigators.

“Russia fights extradition of high-level cybercriminals for a number of reasons, including the fact that they don’t want the US to have access to people who can help them better understand the relationship between Russian intelligence and cybercriminals,” Dwyer, now a partner focusing on cybersecurity at Alston & Bird law firm, told CNN. He said he had no knowledge of any non-public information on Klyushin’s case.

Holden Triplett, a former senior FBI official based in Russia, said that the US arrest of Klyushin could compromise any Russian intelligence activity of which Klyushin or his firm had knowledge.

“When someone like this has been arrested, any operation that they would have knowledge of immediately becomes suspect from a counterintelligence perspective,” Triplett told CNN. “Anything that they’ve touched is now under the microscope.”

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