2 Men Charged With Conspiring to Illegally Obtain Technology and Computer Chips- Sent to China

[nitpicker]

https://www.justice.gov/opa/pr/2-men-charged-conspiring-illegally-obtain-technology-and-computer-chips-were-sent-china-0

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, January 23, 2018

2 Men Charged With Conspiring to Illegally Obtain Technology and Computer Chips That Were Sent to China

Federal authorities arrested Yi-Chi Shih, 62, and Kiet Ahn Mai, 63, on Jan. 19, on federal charges that allege a scheme to illegally obtain technology and integrated circuits with military applications that were exported to a Chinese company without the required export license.
(snip)

Shih, an electrical engineer who is a part-time Los Angeles resident and a naturalized U.S. citizen originally from Taiwan, and Mai who resides in Pasadena, California and is a naturalized U.S. citizen originally from Vietnam, were arrested on Jan. 19, without incident by federal agents.

Shih and Mai, who previously worked together at two different companies, are named in a criminal complaint unsealed on Jan. 19, that charges them with conspiracy. Shih is also charged with violating the International Emergency Economic Powers Act (IEEPA), a federal law that makes illegal, among other things, certain unauthorized exports.

The complaint alleges that Shih and Mai conspired to illegally provide Shih with unauthorized access to a protected computer of a U.S. company that manufactured specialized, high-speed computer chips known as monolithic microwave integrated circuits (MMICs). The conspiracy count also alleges that the two men engaged in mail fraud, wire fraud and international money laundering to further the scheme.

According to the affidavit in support of the criminal complaint, Shih and Mai executed a scheme to defraud the U.S. company out of its proprietary, export-controlled items, including technology associated with its design services for MMICs. As part of the scheme, Shih and Mai accessed the victim company’s computer systems via its web portal after Mai obtained that access by posing as a domestic customer seeking to obtain custom-designed MMICs that would be used solely in the United States. Shih and Mail allegedly concealed Shih’s true intent to transfer the U.S. company’s technology and products to the People’s Republic of China.

The victim company’s proprietary semiconductor technology has a number of commercial and military applications, and its customers include the Air Force, Navy and the Defense Advanced Research Projects Agency. MMICs are used in electronic warfare, electronic warfare countermeasures and radar applications.

The computer chips at the heart of this case allegedly were shipped to Chengdu GaStone Technology Company (CGTC), a Chinese company that established a MMIC manufacturing facility in Chengdu. Shih was the president of CGTC, which in 2014 was placed on the Commerce Department’s Entity List, according to the affidavit, “due to its involvement in activities contrary to the national security and foreign policy interest of the United States – specifically, that it had been involved in the illicit procurement of commodities and technologies for unauthorized military end use in China.” Because it was on the Entity List, a license from the Commerce Department was required to export U.S.-origin MMICs to CGTC, and there was a “presumption of denial” of a license.

The complaint outlines a scheme in which Shih used a Los Angeles-based company he controlled – Pullman Lane Productions, LLC – to funnel funds provided by Chinese entities to finance the manufacturing of MMICs by the victim company. The complaint affidavit alleges that Pullman Lane received financing from a Beijing-based company that was placed on the Entity List the same day as CGTC “on the basis of its involvement in activities contrary to the national security and foreign policy interests of the United States.”

Mai acted as the middleman by using his Los Angeles company – MicroEx Engineering – to pose as a legitimate domestic customer that ordered and paid for the manufacturing of MMICs that Shih illegally exported to CGTC in China, according to the complaint. It is the export of the MMICs that forms the basis of the IEEPA violation alleged against Shih. The specific exported MMICs also required a license from the Commerce Department before being exported to China, and a license was never sought or obtained for this export.
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[DonCoquixote]

1. qs much as the Chinese have done miracles

The fact is they will have a hard time being to able to encourage invention, not that they donot have the talent, but that said talent knows that are always one capricious whim away from being punished. The world loved the "birds nest" arena done by ai weiwei

https://en.wikipedia.org/wiki/Beijing_National_Stadium

nit lo and behold, ai weiwei wound up gettign arrested, despite his work being one of the few things about the Olympics NOT considered a disaster.