The Department of Justice reports that an electrical engineer who schemed to illegally obtain integrated circuits with military applications that were exported to China without the required filing of electronic export information has been sentenced to 63 months in federal prison. He was also fined $300,000 and ordered to pay $362,698 in restitution.
According to a DOJ press release, the man was the president of a Chinese company that was placed on the Commerce Department’s Entity List in 2014 due to its involvement in the illicit procurement of commodities and items for unauthorized military end-use in China. This company was building a monolithic microwave integrated circuit manufacturing facility in China and toward that end the man defrauded a U.S. MMIC company out of its confidential and proprietary business information. As part of this scheme he accessed the U.S. company’s web portal after obtaining that access through an associate who posed as a domestic customer seeking to obtain custom-designed MMICs that would be used solely in the U.S.
The man then used a U.S.-based company he controlled to funnel funds to finance the manufacturing of the MMICs by the victim company. This financing was received from a Beijing-based company that had also been placed on the Entity List in 2014.
This case highlights the importance of strong export compliance procedures. For more information on developing and implementing such procedures, please contact attorney Kristine Pirnia via email.
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