US authorities have resolved a sanctions and export-control case involving Extreme Networks and sales linked to a Russian defence manufacturer. In parallel actions, the Justice Department entered into a non-prosecution agreement with the North Carolina-based networking company, while the Treasury Department’s Office of Foreign Assets Control reached a separate administrative settlement.
The Justice Department agreement sets a criminal penalty of $975,721.84. The Treasury settlement is $1,529,685. Together, the two resolutions set out financial payments of just over $2.5 million. They concern closely related activity but are separate actions with different legal roles and scopes.
Sales linked to a Russian weapons maker
The case concerns networking equipment and related services supplied to Moscow Machinery Building Plant Avangard, also known as MMZA. The manufacturer was majority-owned by JSC Concern Almaz-Antey, a Russian defence group that had been subject to US blocking sanctions since 2014. MMZA is associated with production of S-300 and S-400 anti-aircraft missile systems.
The Justice Department resolution covers 11 purchase orders processed between about March 2018 and March 2022 through Extreme Networks Rus LLC, the company’s then Russia-based subsidiary. The Treasury settlement describes nine exports of equipment and related services between September 2018 and March 2022. The different dates and counts reflect the separate agencies’ descriptions of the conduct addressed in their respective actions.
The non-prosecution agreement addresses allegations that certain Russia-based employees concealed MMZA’s identity from the company’s global trade-compliance group. It also addresses alleged false electronic export information and the unauthorised movement of goods from the United States. These are the allegations resolved by the agreement, not findings after a criminal trial.
A first use of the ‘near-miss’ route
The Justice Department has described the agreement as its first non-prosecution agreement in a ‘near-miss’ case under its 2026 corporate enforcement and voluntary self-disclosure policy. The policy is intended to encourage companies to identify misconduct, report it, cooperate with investigators and remedy the underlying failures.
Extreme Networks’ disclosure was not treated as timely because it came when public disclosure was imminent. The company nevertheless received the near-miss treatment after cooperating with the investigation and taking remedial steps. Those steps included ending a contract with the third-party distributor involved in the sales, improving screening procedures, increasing compliance staffing and adding due-diligence processes for mergers and acquisitions.
Under the agreement, the Justice Department amount is split equally between a forfeiture of $487,860.92 and a criminal fine of the same value. A non-prosecution agreement resolves an investigation on agreed terms without a prosecution proceeding. It is not a criminal conviction or a court judgment of guilt.
A separate Treasury settlement
The Treasury settlement concerns apparent sanctions violations and describes them as voluntarily self-disclosed and egregious. It is an administrative settlement that runs alongside the Justice Department case, rather than an additional criminal prosecution. The two agencies’ actions show how one set of transactions can give rise to both criminal and civil or administrative consequences under US sanctions and export-control rules.
The resolutions also underline the importance of identifying the end user of goods and services, not only the immediate customer or distributor. In this case, the alleged concealment of the intended recipient was central to the compliance failure described in the non-prosecution agreement. Screening, escalation routes and reliable records matter particularly where sales involve controlled technology, sanctioned ownership structures or intermediaries operating across borders.
Why the case matters
The near-miss designation gives the outcome a significance beyond the financial totals. It shows that a disclosure can fall short of the policy’s standard for a full declination yet still receive credit where a company provides extensive cooperation and appropriate remediation. At the same time, the case demonstrates that delayed disclosure can materially affect the form of a resolution.
For Extreme Networks, the federal actions bring the identified investigation and the parallel sanctions matter to a formal resolution. The underlying allegations remain serious: the case concerns equipment and services linked to a Russian weapons manufacturer during a period when the relevant ownership chain was subject to US sanctions. The agreements set the legal terms of the resolution, while avoiding a criminal prosecution or trial verdict.
