A criminal investigation has been opened in the U.S. into a Florida factory that makes rifles modeled after the iconic Soviet AK-47 assault rifle and is run by executives with ties to top allies of Russian President Vladimir Putin, Bloomberg reports.
Kalashnikov USA’s 2015 request for state and local tax breaks is being investigated by the U.S. Attorney’s office in Miami, a grand jury subpoena sent to the city of Pompano Beach this week reveals. Federal prosecutors are investigating the business practices of RWC Group LLC, which owns Kalashnikov USA’s plant in Pompano Beach, a person familiar with the investigation said.
The U.S. Attorney’s office in Miami declined to confirm or deny any probe, while representatives for the company didn’t respond to repeated requests for comment. However, a top executive for RWC Group and Kalashnikov USA has said the manufacturer is doing nothing wrong.
The company’s past links to Russia — and its famed state arms maker Kalashnikov Concern JSC — have drawn increasing scrutiny in the weeks since the February 14 mass shooting at a high school in nearby Parkland, Florida. RWC Group became Kalashnikov’s sole U.S. distributor in 2012, and the Russian company planned to sell 200,000 guns a year in America through that arrangement.
But in 2014, the U.S. Treasury imposed economic sanctions on Kalashnikov Concern and other Russian arms makers to punish Putin for supporting separatists in Ukraine.
The sanctions ban any U.S. person or company from doing business with Kalashnikov Concern, so any ties between the Florida factory and the Russian arms maker could raise red flags with the U.S. Treasury, said Daniel Fried, a former U.S. Department of State diplomat who crafted Russia sanctions during the Obama administration.
Executives for Kalashnikov USA have said generally in interviews and statements that their company isn’t violating sanctions because it makes guns of its own design and doesn’t source any parts from Russia.