Extreme Networks Faces $975,721.84 Criminal Penalty in Russia Export Case

Key Facts

The U.S. Department of Justice entered into a non-prosecution agreement with Extreme Networks and imposed a total criminal penalty of $975,721.84 over exports to Russia’s MMZA without the required license. The department said the amount is split equally between a $487,860.92 fine and forfeiture of proceeds in the same amount. The case puts under scrutiny the export controls and sanctions that apply to sales of networking equipment and services to restricted Russian entities.

The Justice Department said Extreme processed and fulfilled 11 orders for networking equipment and services for MMZA without a license or authorization from OFAC. The purchase orders cover roughly March 2018 to March 2022, while OFAC says exports from the United States occurred on 9 occasions between September 2018 and March 2022. The two counts differ because one tallies purchase orders processed by the company, while the other counts export occasions cited by OFAC. The sales generated about $487,860.92 in revenue for the company, according to the Justice Department, an amount equal to the forfeiture set out in the criminal agreement. These transactions date to years before MMZA was added to the U.S. sanctions list.

MMZA was a Russian company that manufactured air defense systems, missiles and other military materiel, and was majority-owned by Russia’s Almaz Antey defense company, which is designated by the United States, according to OFAC. U.S. authorities separately designated MMZA on June 28, 2022, citing its production of missiles for Russia’s S-300 and S-400 systems. OFAC said 7 of the 9 purchase orders included MMZA email addresses or its Moscow office address as the ultimate destination. DEMZ, however, was named as the end user in the transactions, according to settlement documents. These details show how the case was tied to end-user data and the scrutiny of sales routed through intermediaries.

The Justice Department described failures in the company’s internal procedures, saying some Extreme employees in Russia concealed MMZA’s identity from the global trade compliance team. This led, according to the department, to the submission of inaccurate electronic export information and the smuggling of goods from the United States. The department said the company’s disclosure of the conduct was not made “before an imminent threat of discovery of the misconduct by the Department of Justice,” and therefore was not timely under its corporate enforcement policy. It nevertheless gave the company full credit for its cooperation. These facts combine the issue of identifying the ultimate beneficiary with the accuracy of regulatory disclosures and the timing of the company’s information to authorities.

The Justice Department said Extreme terminated the third-party distributor contract used to facilitate the sales, improved screening procedures, increased its compliance staff and introduced due diligence measures related to mergers and acquisitions. The company also wound down its Russian subsidiary and increased the frequency of trade compliance training from once every two years to once a year. The OFAC settlement requires the company to maintain a sanctions compliance program for at least 5 years from the agreement’s effective date. These steps put compliance obligations and the monitoring of parties and end users within the scope of the company’s coming oversight, alongside changes the Justice Department said it had already made.

On the company’s business, Extreme announced in August 2026 that revenue for its fiscal year ended June 30 was $1,283.6 million, up 12.6% year over year. The company targeted revenue of between $1,380.0 and $1,400.0 million for fiscal 2027. In the market, EXTR closed at $21.97 on October 23 and then at $22.70 on October 26, 2026. The available data here do not include the session high or low. These figures accompany the settlement concerning past export practices, while the compliance program obligations remain in force for the period specified in the agreement.