Kushnarev was found guilty of stealing funds allocated to the Crocus project, which was intended to establish production of magnetoresistive random-access memory (MRAM) in Russia. Nearly 12 billion rubles was invested in the project in total, but production was never launched.
From April 2019 to July 2022, Kushnarev headed Crocus Nanoelectronics LLC, the company created to carry out the project. At the same time, he held the post of managing director for investment activity at Rosnano. According to the investigation, the embezzlement took place between April 2013 and March 2021.
The second defendant in the case is Yuri Udaltsov, a former deputy chairman of the Rosnano management board, who has been placed on the international wanted list. According to Kommersant, he left Russia for Germany in July 2015. His case is to be heard in absentia.
The investigation alleged that the project participants did not intend to develop production and knew that the company headed by Kushnarev would be unable to carry out the project. The Interior Ministry opened a criminal case in September 2024, after which Kushnarev was detained and sent to a pretrial detention center. The state prosecution asked for a sentence of nine years and ten months.
The Crocus project was launched in 2011 together with France's Crocus Technology. Total investment exceeded €200 million, including €100 million in co-financing from Rosnano. In 2016, the state corporation bought out the French partner's stake, and in 2022 it transferred its stake to the company KNE-IS, which later fell under European Union sanctions.
In 2024, Crocus Nanoelectronics announced its intention to declare itself bankrupt. The plant could produce goods using a 65-nanometer process, but performed only half of the production cycle and remained dependent on foreign markets. After sanctions were imposed, the enterprise effectively ceased operations.
In parallel with the criminal case, Rosnano sought to recover damages over the Crocus project from a broader group of former executives, including Anatoly Chubais, Kushnarev and Udaltsov. In July 2026, the Moscow Arbitration Court ordered nine former top managers to pay nearly 11.9 billion rubles. The state corporation claimed that the money was directed to financing project companies on unfavorable terms, and that the former executives continued to increase investments even after the technology's lack of industrial application had become obvious.
Chubais himself does not figure in the criminal case against Kushnarev and Udaltsov. He has called the prosecution of former Rosnano employees "repressions" and "mockery of the law," and the company's current management a "raider outfit." Chubais headed Rosnano from 2008 to 2020. After the start of Russia's full-scale invasion of Ukraine, he left the country.
Kushnarev became the second former head of the state corporation from Chubais's team to receive a real prison term in a case involving multibillion-ruble embezzlement, The Moscow Times writes. In April, Boris Galkin, former general director of Plastik Logic (part of Rosnano), received nine years in a penal colony for embezzling 6.7 billion rubles during the creation of flexible tablets. The court found that Udaltsov, Galkin and Rosnano investment director Nikolai Tychinin embezzled more than 6.67 billion rubles under the guise of carrying out a project for "next-generation plastic electronics." In June 2025, Udaltsov and Tychinin were arrested in absentia. Former Rosnano top managers Irina Rapoport and Oleg Kiselev, accused of especially large-scale fraud, were also placed on the wanted list.