Wednesday, December 19, 2012

Two Chinese Individuals Charged In Scheme To Obtain Controlled Dual-Use American Technology

The U.S. Justice Department released the below yesterday:

PORTLAND, OR—U.S. Attorney S. Amanda Marshall, FBI Special Agent in Charge Greg Fowler, and Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement Special Agent in Charge Julie L. Salcido announced today the unsealing of a 12-count indictment charging Wan Li Yuan and another unknown Chinese resident with conspiracy to violate the Export Administration Regulations and smuggle goods, conspiracy to commit money laundering, and 10 counts of money laundering in connection with an attempt to obtain dual-use programmable logic devices (PLDs), which are manufactured by Lattice Semiconductor Corporation of Hillsboro, Oregon, to perform at extended temperature ranges and tested to military specifications.

According to the indictment, while operating from the People’s Republic of China, Yuan used the alias “Nicholas Bush,” and a second Chinese resident used the alias “Jason Jiang” as they created a sophisticated scheme to conceal their true identity and location in order to mislead U.S. companies into believing they were dealing with American customers so that the defendants could procure and send sensitive technologies to China without the required export licenses.

Specifically, Yuan and Jiang sought to procure Lattice Semiconductor PLDs designed to operate at extreme temperature ranges and which can have military applications such as in missiles and radar systems. To further his efforts, the indictment alleges that Yuan created a fake website and e-mail addresses using the name of a legitimate New York-based company. Yuan requested U.S. companies to ship the desired parts to the address of a freight forwarder in New York, which he also falsely represented as being associated with the New York company whose business name Yuan had stolen.

Through the investigation and use of an undercover operation, the FBI and Department of Commerce were able to seize approximately $414,000 in funds sent by Yuan as down payments for the Lattice PLDs.

“The Department of Justice is committed to finding, charging, and prosecuting anyone who attempts to illegally procure American technology,” said Amanda Marshall, U.S. Attorney for the District of Oregon. “Even if we cannot arrest them overseas, we will seek to forfeit any assets we find in the United States.”

“Oregon is rich with high-tech innovators and companies that power the U.S. economy,” said Greg Fowler, Special Agent in Charge of the FBI in Oregon. “These companies can become targets for foreign nationals and governments who want to take advantage of American research and production while taking aim at American national security interests. The FBI works closely with our industry partners to prevent the illegal acquisition of export-controlled sensitive U.S. technologies.”

“This indictment tells illicit traders that violating the U.S. export regulations threatens our national security and will be dealt with accordingly,” said Julie Salcido, the Special Agent in Charge of the Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement.

Lattice Semiconductor cooperated with the government in this investigation. “As a global technology company, Lattice is committed to strict compliance with United States and other applicable export controls,” stated Byron Milstead, Lattice’s General Counsel. “We appreciate the support provided by U.S. enforcement authorities in assisting us in our compliance efforts.”

A criminal indictment is only an allegation and not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty.

The investigation was conducted jointly by the Portland Office of the Federal Bureau of Investigation and the U.S. Commerce Department’s Bureau of Industry and Security’s Office of Export Enforcement, San Jose Field Office, and is being prosecuted by Assistant U.S. Attorney Charles F. Gorder, Jr.

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