SAN FRANCISCO (CN) —Two Chinese nationals face charges of being part of a scheme to illegally export semiconductor-related machinery to a Chinese company, an unsealed indictment in San Francisco federal court revealed Thursday afternoon.
Federal prosecutors charged Han Li, 44, and Lin Chen, 64, with violating the International Emergency Economic Powers Act and Export Administration Regulations by attempting to export a machine manufactured by a California-based company used to process silicon wafer microchips. Li was arrested yesterday in Chicago. Chen is believed to be in China.
"Stopping the illegal export of U.S. technology to China is one of the FBI’s highest priorities. We will aggressively pursue anyone who violates export control laws designed to protect our national and economic security. I am proud of the tenacious work that resulted in today’s announcement,” said FBI Special Agent in Charge Robert Tripp. “U.S. business leaders should be encouraged to establish a relationship with their local FBI field office to help protect against the pervasive threat of criminals looking to steal American technology.”
Federal regulations restrict the export of certain items to companies, research institutions, and other entities identified on the Department of Commerce’s Entity List.
Li and Chen are accused of seeking to illegally obtain a DTX-150 Automatic Diamond Scriber Breaker Machine for China-based Changdu GaStone Technology Company. The company is on the entity list, making it ineligible to receive certain U.S. tech and services.
The machine is used to cut thin semiconductors used in electronics, also known as silicon wafers, and under Department of Commerce regulations, requires a license and authorization to export to the Chinese company.
Federal prosecutors say between May 2015 and August 2018, Chen and Li attempted to use an intermediary company, which they represented as the purchaser and end user of the machine, to try to obtain the machine from Santa Rosa, California-based Dynatex International.
Li and Chen instructed Dynatex to ensure that the export information associated with the sale did not list Changdu GaStone as the ultimate consignee of the shipment so that they could evade detection.
“The export restrictions at issue in this case were put in place to prevent the illicit procurement of commodities and technologies for unauthorized military end use in the People’s Republic of China,” said U.S. Attorney for the Northern District of California Ismail Ramsey. “This office will continue to vigorously enforce the nation’s export laws, including those pertaining to advanced technologies, to protect our national security.”
Conspiracy to violate International Emergency Economic Powers Act carries a maximum penalty of 20 years in prison and a $1 million fine, while Export Administration Regulations violations carry a maximum penalty of five years in prison and a $250,000 fine. The pair also faces charges illegal smuggling.
“As alleged, the defendants sought to evade export controls to obtain U.S. semiconductor manufacturing technology for a prohibited Chinese company,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department is committed to enforcing export controls and holding accountable those who seek to illicitly procure U.S.-developed technologies that puts our national security at risk.”
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