Chinese Duo Violated U.S. Export Laws

(CN) - After a five-week trial, a federal jury in Massachusetts convicted two Chinese nationals and their electronics company of illegally exporting military radar and electronic warfare materials to Chinese military agencies, the Justice Department said.

Zhen Zhou "Alex" Wu and Yufeng "Annie" Wei worked through Wu's Chinese company Chitron Electronics Inc., which is headquartered in Shenzhen, China, and has an office in Waltham, Mass. Prosecutors say the two conspired to skirt U.S. export laws and sold electronic parts to the Chinese military through Hong Kong, including materials used for radar, satellite and military guidance systems.

"Today's convictions demonstrate the importance of safeguarding America's sensitive technology against illicit foreign procurement efforts," said David Kris, assistant attorney general for national security. "They also serve as a warning to those who seek to covertly obtain technological materials from the U.S. in order to advance military systems of their own."

Wu headed Chitron in China and Wei maintained the U.S. office. Between 2004 and 2007, investigators say the two falsified shipping documents, and Wu repeatedly instructed employees to never tell U.S. companies that electronic parts were going to China.

After the products were sent to Chitron's Massachusetts office, employees sent packages to their mainland China office via freight forwarders in Hong Kong.

Wu solicited local businesses in China, most notably China Electronics Technology Group Corporation, which buys, makes and develops electronics for the military. As early as 2002, he referred to Chinese military agencies as Chitron's major customer, and by 2007 a quarter of the company's sales went to the military, prosecutors say.

Since 1990, the U.S. government has kept an arms embargo with China, banning the export, re-export, or re-transfer of any defense-related materials. Items being sent to China require an export license from the U.S. Department of Commerce, a step Chitron specifically avoided.

"The illegal export of U.S. defense technology to foreign countries is harmful to the national security of the United States," said Boston FBI special agent Warren Bamford. "These types of violations will continue to be aggressively investigated because this conduct cannot and will not be tolerated."

Wu and Wei face up to 20 years in prison and a $1 million fine after three years of supervised release. They both face deportation following their sentence.

Chitron-US received a hefty $1 million fine for each count of illegal export. The company's Chinese counterpart did not appear at trial, and the federal court fined Chitron $1.9 million.

The case was investigated by the FBI, ICE, Defense Criminal Investigative Service and Department of Commerce's Office of Export Enforcement. It is being prosecuted by assistant U.S. attorneys B. Stephanie Siegmann and John Capin of Massachusetts' Anti-Terrorism and National Security Unit.

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