IBM Russian Firm Fined in Illegal Computer Sales

An IBM Corp. subsidiary agreed Friday to pay $8.5 million in federal fines for selling powerful computers ultimately destined for a Russian nuclear weapons laboratory.

IBM East Europe/Asia Ltd., the Russian subsidiary of IBM, pleaded guilty in U.S. District Court in Washington to 17 criminal charges. Judge Norma Holloway Johnson imposed the maximum fine allowed under the law, which is designed to prevent the spread of nuclear weapon technology.

Prosecutors said the IBM subsidiary sold $1.5 million worth of computers in late 1996 and early 1997 to a Russian affiliate of a company that had been acting as an agent for the Russian lab, Arzamas-16.