UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA v. Criminal Action No. 24-401 (JDB) BENCE HORVATH, Defendant.

MEMORANDUM OPINION

On September 4, 2024, a grand jury returned a four-count indictment charging Bence

Horvath with conspiracy to violate U.S. export control laws and related offenses stemming from

his attempt to export radios from the United States to Russia without a license. Before the Court

is Horvath’s motion to dismiss the indictment in its entirety for failure to state an offense. For the

reasons explained below, the Court will deny Horvath’s motion to dismiss.

BACKGROUND

The Bureau of Industry and Security (“BIS”), an agency within the Department of

Commerce, oversees the nation’s export control system. As is relevant here, the Export Control

Reform Act of 2018 (“ECRA”), 50 U.S.C. §§ 4801–4852 (2018), delegates to the BIS the authority

to regulate exports of certain categories of items and information. See generally 50 U.S.C.

§§ 4814–15;

et seq. (2025) (the Export Administration Regulations (“EARs”)).

ECRA also makes it a crime to willfully “violate, attempt to violate, conspire to violate, or cause

a violation of” ECRA or “any regulation, order, license, or other authorization issued” pursuant to

ECRA, including the EARs.

(a)(1), (b); see Indictment [ECF No. 7] ¶ 17.

Although ECRA only permits regulation “to the extent necessary” to protect U.S. national

security or to “further significantly” U.S. foreign policy goals or international obligations,

1 § 4811(1), the EARs have a wide ambit, generally regulating “any item warranting control that is

not exclusively controlled for export, reexport, or transfer (in-country) by another [federal]

agency,”

. The EARs provide that the export, reexport, and in-country transfer

of certain items is prohibited without a BIS license or exemption. See

§ 736.2(b). As part of

its regulatory efforts, BIS assigns each export an Export Control Classification Number (“ECCN”);

using the ECCNs, BIS places certain categories of items on the Commerce Control List (“CCL”),

which is a list of items subject to the EARs. See Indictment ¶¶ 15–16;

(Apr.

14, 2022).

During the relevant period of September 2022 to May 2023, the EARs contained “a series

of stringent export controls that restrict[ed] Russia’s access to the technologies and other items

that it need[ed] to sustain its attack on Ukraine,” including the requirement to secure a BIS license

prior to exporting goods on the CCL from the United States to Russia. See Indictment ¶ 16;

(“Sanctions against Russia and Belarus”). The parties agree that during the relevant

period, the exports at issue—three types of two-way, portable radios—had ECCNs of 5A992.c and

were on the CCL. See Indictment ¶¶ 9, 18–19; Mem. L. Supp. Mot. Dismiss Indictment [ECF No.

20-1] (“Mot.”) at 5–6.

Bence Horvath is a non-U.S. citizen believed to reside in Spain. Indictment ¶ 1. 1 During

the relevant period, Horvath operated the Spanish global trading and supply chain management

company Blacksaphir Capital SL; assisted with the day-to-day procurement activities of

Budaphone, a Moscow-based Russian company that procures mobile radio communications; and

served as the director of “Russian Company 1,” a Moscow-based telecommunications company

1 “When considering a motion to dismiss an indictment, a court assumes the truth of th[e indictment’s] factual allegations.” United States v. Ballestas,

(D.C. Cir. 2015) (citing Boyce Motor Lines v. United States,

, 343 n.16 (1952)).

2 that has contracted directly with several Russian government entities. Id. ¶¶ 3, 6, 8, 21, 26. 2

Horvath’s relative, Co-conspirator 1, also “operated, controlled, and directed Budaphone, Russian

Company 1, and Blacksaphir.” Id. ¶¶ 2, 26. Budaphone and Russian Company 1 have the same

phone number and physical address. Id. ¶ 8.

During this period, Horvath, Co-conspirator 1, and Co-conspirator 2—a Latvian citizen

who had “provided freight handling and logistics services for Budaphone”—allegedly “purchased

goods from” U.S. Company 1, “provid[ed] false and misleading information” to “intentionally

conceal[] from the United States Government” and U.S. companies “the true nature of the ultimate

end use and the true identities of the ultimate end users of the goods,” and “attempted to cause the

goods to be exported from the United States to individuals and entities located in Russia” without

a license. See id. ¶¶ 4, 21, 23–24, 26–27.

The indictment alleges that the parties committed several overt acts in furtherance of the

conspiracy. In some instances, Horvath planned multi-step shipping routes between the United

States and Russia to obfuscate the radios’ ultimate destination. See generally id. ¶¶ 28–32. In

January 2023, for example, Horvath emailed Co-conspirator 2 that his “goods [we]re in Dubai

inside [the] Free Trade Zone,” he sought to buy the goods for Serbian Company 1, and “[a]fter

that, [h]e would like to sell [the goods] to [Russian Company 1] and ship to Moscow.” Id. ¶ 32.

Another time, Horvath emailed Co-conspirator 1 to propose “accelerat[ing] [the procurement]

process” by selling U.S. Company 1 radios to “a Spanish company,” which the government

contends was Blacksaphir. Id. ¶ 28. The Spanish company, Horvath explained in his e-mail,

would subsequently sell the radios to Hungarian Company 1, which would sell them to Serbian

Company 1, which would sell them to Russian Company 1 in Moscow. See id. ¶¶ 28–29.

2 Where relevant, the Court uses the same pseudonyms as the indictment.

3 In other transactions, Horvath was straightforward in his desire to ship the radios to Russia.

In March 2023, Horvath attempted to purchase radios and accessories from U.S. Person 1, who

worked for U.S. Company 1. See id. ¶¶ 33–34. U.S. Person 1 asked for the end user information

and stressed that Horvath must “comply” with United States export laws “or there [would be] no

radios.” Id. ¶ 36. Horvath admitted that the radios would “go[] to Moscow for public safety use”

and that “[t]he end user is the Moscow Police.” Id. ¶ 37. When Horvath asked, “[d]o you think

we can still buy this stuff, or we give up?” U.S. Person 1 responded, “No Chance.” Id. ¶¶ 37–38.

Not too long after, Horvath again tried to purchase radios from U.S. Person 1. This time,

Horvath told U.S. Person 1 that the radios would be shipped to Spain. Id. ¶ 41. But when U.S.

Person 1 mentioned that the radios would be shipped from South Africa, Horvath asked whether

the parties could “try to ship that radios strait [sic] to Moscow” since South Africa “does not follow

sanctions.” Id. ¶¶ 46–47. Horvath agreed to purchase the radios, and on March 31 he gave

Blacksaphir’s Spanish address for billing and Co-conspirator 2’s Latvian freight forwarder as the

address for shipping. Id. ¶ 45. On April 2, U.S. Person 1 sent Horvath a confirmation for three

sales orders (one for each type of radio) that totaled $84,530. Id. ¶ 48. On April 3, Horvath

requested U.S. Person 1’s bank account information for payment, and around April 24, Blacksaphir

transferred $97,664 to U.S. Person 1’s business bank account. Id. ¶¶ 49–51.

In May 2023, U.S. Customs and Border Protection detained a shipment of U.S. Company

1’s radios from the United States to the Latvian freight forwarder. Id. ¶ 52. The shipment

contained an invoice from a business owned by U.S. Person 1 with the billing address as

Blacksaphir and the shipping address as the freight forwarder. Id. Although the shipment’s sales

order provided for 200 radios rather than the 170 included in the April 2 sales order, the total price

of the shipment was $97,664—the same amount as Blacksaphir’s April 24 payment. Id.

4 Authorities arrested Horvath in August 2024. See Arrest Warrant [ECF No. 5] at 1. The

grand jury returned a four-count indictment in September, charging Horvath with conspiracy to

unlawfully export goods to Russia and to defraud the United States, attempted smuggling of goods

to Russia via Latvia, attempted unlawful export of goods to Russia via Latvia, and international

money laundering. See Indictment ¶¶ 21–59. Horvath has filed a motion to dismiss, which the

parties have fully briefed. See Mot.; Gov’t Resp. Def.’s Mot. Dismiss Indictment [ECF No. 21]

(“Opp’n”); Def. Bence Horvath’s Reply [ECF No. 22] (“Reply”). 3 The motion is now ripe for

decision.

LEGAL STANDARDS

“An indictment need only contain a ‘plain, concise and definite statement of the essential

facts constituting the offense charged.’” United States v. Safavian,

(D.D.C. 2006) (quoting Fed. R. Crim. P. 7(c)). An indictment is “sufficiently specific where it (1)

contains the elements of the offense charged and fairly informs the defendant of those charges so

that he may defend against them, and (2) enables him ‘to plead acquittal or conviction in bar of

future prosecutions for the same offense.’”

(quoting Hamling v. United States,

,

117–18 (1974)).

A criminal defendant may move to dismiss an indictment in its entirety or as to certain

charges prior to trial if there is a “defect in the indictment,” such as the “failure to state an offense.”

Fed. R. Crim. P. 12(b)(3)(B)(v); see United States v. Cotton,

(2002). But this

is a limited ground for seeking relief. “An indictment returned by a legally constituted and

unbiased grand jury . . . if valid on its face, is enough to call for trial of the charge on the merits.”

3 Horvath requested oral argument pursuant to Local Rule 47(f). See Mot. Dismiss Indictment [ECF No. 20] at 1. Because the Court concludes that the parties’ briefings are sufficient to resolve the motion on the papers, the Court will deny the request. See LCrR 47(f) (granting a request for an oral hearing “shall be within the discretion of the Court”).

5 Safavian,

(quoting Costello v. United States,

(1956)).

Thus, only in “‘unusual circumstances’ is pretrial dismissal of the indictment possible on

sufficiency-of-the-evidence grounds, and that is ‘where there are material facts that are undisputed

and only an issue of law is presented.’”

(quoting United States v. Yakou,

(D.C. Cir. 2005)); see also United States v. Ballestas,

(D.C. Cir. 2015)

(dismissing an indictment is disfavored because it “directly encroaches upon the fundamental role

of the grand jury” (quoting Whitehouse v. U.S. Dist. Ct.,

, 1360 (1st Cir. 1995))).

Finally, because the Fifth Amendment makes “[a]dherence to the language of the

indictment [] essential,” United States v. Akinyoyenu,

(D.D.C. 2016)

(quoting United States v. Hitt,

(D.C. Cir. 2001)), a court considers only “the

face of the indictment and, more specifically, the language used to charge the crimes,”

(quoting

United States v. Sunia,

(D.D.C. 2009) (emphases omitted)).

ANALYSIS

The grand jury charged Horvath with violations of four federal laws: conspiracy to

unlawfully export goods to Russia and to defraud the United States (

), attempted

smuggling of goods to Russia via Latvia (

); attempted unlawful export of goods to

Russia via Latvia (

(a)), and international money laundering (

(a)(2)(A)). To determine whether the indictment states an offense as to each charge, the

Court must determine whether the indictment contains “allegations [that], if proven, would be

sufficient to permit a jury to find that the crimes charged were committed.” United States v.

Bowdoin,

(D.D.C. 2011) (citing United States v. Sampson,

(1962)). In other words, the indictment must allege each element of each charged offense.

Here, Horvath challenges one element that each offense shares: that Horvath acted contrary

to U.S. law by intentionally seeking to export controlled items without a required BIS license, in 6 violation of

(a). See Indictment ¶¶ 21, 54, 56, 59. 4 That regulation provides:

“[f]or the purposes of paragraphs (a)(1) and (2) of this section, commodities . . . classified

under ECCN[] 5A992 . . . do not require a license to or within Russia or Belarus for the following

civil end-users,” with a list including “joint ventures” between companies headquartered in country

groups that include Spain and Latvia.

(a). 5 Subsection (a)(1) then provides that

“[a] license is required . . . to export, reexport, or transfer (in-country) to or within Russia or

Belarus any item subject to the EAR and specified in any [ECCN] . . . on the CCL.”

§ 746.8(a)(1).

The indictment adequately alleges Horvath violated § 746.8(a). The indictment alleges

that each type of radio at issue had an ECCN on the CCL, Indictment ¶¶ 9, 18–19; Horvath sought

to export the radios to Russia, id. ¶ 21; and the exemptions in paragraph § 746.8(a) were “not

applicable,” id. ¶ 18. These allegations include “the elements of the offense[s] charged and fairly

inform[] the defendant of those charges so that he may defend against them.” Safavian,

. Indeed, Horvath has already identified possible defenses.

Horvath contends that the indictment’s statement that the exceptions are “not applicable”

is “legally incorrect.” Mot. at 6. But the government is allowed to make some legal conclusions

in an indictment, and “it is not necessary for the indictment to state exactly how [a defendant’s]

4 See

(“two or more persons conspire . . . to commit any offense against the United States”);

§ 554 (“Whoever fraudulently or knowingly exports or sends from the United States, or attempts to export or send from the United States, any [good] . . . contrary to any law or regulation of the United States . . .”); id. § 1956(a)(2)(A) (“Whoever . . . transfers . . . or attempts to . . .transfer . . . a monetary instrument or funds . . . from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States. . . with the intent to promote the carrying on of specified unlawful activity . . .”);

(a)(1) (“It shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of this subchapter or of any regulation” issued under ECRA.). 5 Although the relevant substance of

has remained the same since the period of Horvath’s charged conduct, the section’s structure has changed. Compare

(a), with

(Jan. 1, 2023), https://perma.cc/Y866-QH6X, and

(May 23, 2023), https://perma.cc/L8SZ-4JCT. The Court quotes from and cites to the sections of the C.F.R. as they existed during the period of Horvath’s charged conduct.

7 conduct satisfies each element of the offense.” United States v. Kelley, Crim. A. No. 22-408

(CKK),

, at *4 (D.D.C. Oct. 17, 2024); see, e.g., United States v. Resendiz-

Ponce,

(2007) (“[A]n indictment parroting the language of a federal criminal

statute is often sufficient.”); Hamling, 418 U.S. at 117–18 (collecting cases). Indeed, the inquiry

is “not whether [the indictment] could have been made more definite and certain, but whether it

contains the elements of the offense intended to be charged, ‘and sufficiently apprises the

defendant of what he must be prepared to meet.’” Hagner v. United States,

(1932) (quoting Cochran v. United States,

(1895)). And here, it does.

Horvath also briefly claims (1) the indictment must (and failed to) allege the “five types of

facts” that

(a) states “determine [one’s] obligations,” including license

requirements, under various EARs; and (2) U.S. Person 1, not Horvath, had the obligation to secure

the license under § 758.3(a). See Mot. at 9. Both arguments fail.

To start, the paragraph of § 736.2 to which Horvath points—§ 736.2(a)—does not state an

offense. It merely lists and briefly explains the types of general facts that pertain to a license

determination, such as the item’s ECCN and end user and destination. Section 746.8 then applies

these facts to explain when a license is required in the context of that section, with some of those

facts relevant to the underlying license requirement and others applicable to various exemptions.

See § 746.8. Indeed, § 736.2(a) itself directs readers to “see other parts of the EAR where the

license requirements and other restrictions are specified in greater detail.” And, as previously

explained, the indictment pleads the facts necessary to establish a violation of the license

requirement in § 746.8(a).

Looking further down in § 736.2, the indictment sufficiently alleges a violation of

§ 736.2(b)(6). See Indictment ¶ 21 (alleging Horvath acted “without having first obtained the

8 required licenses from BIS . . . in violation of . . . Sections 736.2 and 746.8”); id. ¶ 56 (similar).

Subsection 736.2(b) provides the EAR’s “ten general prohibitions.”

(b). Section

746.8 falls within “General Prohibition Six,” which states that a party “may not, without a license

or license exception . . . export, reexport, or transfer (in-country) any item subject to the EAR to a

country or region . . . that is embargoed by the United States or otherwise made subject to

controls”).

§ 736.2(b)(6)(i); see also id. (referencing § 746.8). For the reasons that the

indictment alleges a violation of the narrower § 746.8(a), it thus also alleges a violation of

§ 736.2(b).

Turning to Horvath’s second brief argument, assuming arguendo that U.S. Person 1 had

the obligation to secure the license does not change the adequacy of the indictment as to the

charged conduct. Horvath had an independent obligation to comply with the EAR. See id. § 758.3

(“[a]ll parties that participate in transactions subject to the EAR must comply with the EAR”).

Horvath is charged with acting contrary to law by violating federal regulations that require an

export license. See Indictment ¶¶ 21, 54, 56, 59; see also

, 746.8. The

indictment avers that Horvath “intentionally concealed . . . the true nature of the ultimate end use

and the true identities of the ultimate end users of the goods by providing false and misleading

information” to U.S. Person 1, which impeded U.S. Person 1’s ability to adequately assess whether

the exports required a license. See, e.g., Indictment at ¶¶ 22, 23(D). Then, Horvath attempted to

export those goods without a license.

. In other words, the indictment alleges that Horvath

knowingly concealed details relevant to the license analysis; based on that misrepresentation, the

parties to the transaction did not secure a license for the radios; and Horvath then knowingly

attempted to export the radios absent a license. That is sufficient to allege that Horvath acted

contrary to federal regulations requiring a license, which is all that the charged conduct requires.

9 Horvath’s final argument is that the indictment still fails to state an offense because its

factual allegations, accepted as true, demonstrate that Horvath met two exemptions to the license

requirement. In his view, the indictment thus fails to allege the element that he sought to export

controlled items contrary to law. See generally Mot. at 2–4; Reply at 1–2. 6 But see Indictment

¶ 18 (the license exemptions are “not applicable” to Horvath’s conduct). Horvath’s argument

again fails. The indictment does not plead facts demonstrating that Horvath met either exemption.

Both exemptions apply only to exports that are destined for certain end users. See

(a); (permitting certain exports to Russia for enumerated “civil end-users”);

§ 740.19(a),

(b)(9), (c)(1)(i), (c)(i)(ii), (c)(2)(iii) (in a cross-reference from § 746.8(c)(7), permitting certain

exports “to and for the use of independent non-governmental organizations in . . . Russia” or to

eligible “individuals,” which exclude Russian government entities and officials). But Horvath

himself argues that the indictment does not identify the end users for the radios. See Mot. at 8

(“[T]he Indictment does not identify any end-user or end-use for the charged conduct, instead

vaguely alluding to unspecified ‘Russian end users.’”); see also Indictment ¶ 23(E) (exports “to

individuals and entities located in Russia”). The indictment cannot both fail to identify end users

and identify eligible end users for the purposes of meeting an exemption.

Furthermore, even considering the end users that the government and Horvath have

inferred from the indictment, the indictment does not plead facts that they are civil end users, non-

governmental organizations, or eligible individuals. Compare Indictment ¶ 37 (Horvath stating

for a contemporaneous transaction that “[t]he end user is the Moscow Police”), and Opp’n at 9

6 At times, Horvath also seems to frame his motion as arguing that the government has the burden to plead facts disproving the applicability of statutory and regulatory exemptions. See Mot. at 8; Reply at 11–12. This is a tenuous argument. See, e.g., United States v. Durrani,

, 420–22 (2d Cir. 1987) (explaining framework for analyzing license exemptions). The Court will analyze the argument as Horvath most often and clearly frames it, which is “whether a license was required by law to export the two-way radios at issue in this case, based solely on the allegations within the four corners of the Indictment.” Reply at 2.

10 (“[I]f the Defendant’s words to his co-conspirator can be trusted, they were bound for the ‘Moscow

Police.’”), with

(c)(1)(ii) (“the Russian Government” and “organizations

administered or controlled by the . . . Russian Government . . . are not eligible end users”), and

§ 740.19(c)(2)(iii) (defining “[i]neligible Russian Government officials” to include “employees of

the Ministry of Interior” and “offices, services, agencies and other entities organized under or

reporting to the federal government”); compare Mot. at 10 (assuming the “ultimate purchaser[s]”

were Budaphone and Russian Company 1), with Indictment ¶ 8 (alleging Russian Company 1,

which has the same phone number and address as Budaphone, has as its chief executive officer

“an employee of [Russia’s] Ministry of Internal Affairs” and “directly contracts with various

Russian government entities”), and § 740.19(c)(1)(ii), (c)(2)(iii). The indictment therefore does

not plead facts that Horvath met either exemption, and once again, the indictment adequately states

an offense as to each charge.

CONCLUSION

The indictment “contains the elements of the offense charged,” “fairly informs the

defendant of those charges so that he may defend against them,” and “enables him to plead

acquittal or conviction in bar of future prosecutions for the same offense.” Safavian,

(internal quotation marks omitted). Additionally, the indictment makes “allegations

[that], if proven, would be sufficient to permit a jury to find that the crimes charged were

committed.” Bowdoin,

. This case is thus not one of the limited and

“unusual circumstances” in which the Court may “directly encroach[] upon the fundamental role

of the grand jury” and dismiss the indictment. Ballestas,

.

For these reasons, the Court will deny the defendant’s motion to dismiss. A separate Order

will issue on this date.

11 /s/

JOHN D. BATES United States District Judge

Dated: February 11, 2025

12