3 Chinese Nationals and Two Corps. Charged with Illegally Exporting Defense Articles

[Ryan Ruck]

Three Chinese Nationals and Two Corporations Charged with Illegally Exporting Defense Articles

Three Chinese Nationals and Two Corporations Charged with Illegally Exporting Defense Articles and Commerce Controlled Electronics Components to China and Conspiring to Violate U.S. Export Laws

October 5, 2009

BOSTON, MA—Three nationals of the People's Republic of China and two corporations were charged on October 1, 2009 in federal court with conspiring over a period of 10 years to illegally export defense articles, designated on the United States Munitions List, and Commerce controlled electronics components to end-users in China, including several Chinese military entities.

Acting United States Attorney Michael K. Loucks; John J. McKenna, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office; Bruce M. Foucart, Special Agent in Charge of Immigration and Customs Enforcement - Boston Field Division; Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division; and Edward Bradley, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office announced that ZHEN ZHOU WU a/k/a ALEX WU, YUFENG WEI a/k/a ANNIE WEI, BO LI a/k/a ERIC LEE, CHITRON ELECTRONICS, INC. ("CHITRON-US"), and SHENZHEN CHITRON ELECTRONICS COMPANY LIMITED ("CHITRON-SHENZHEN") were charged in a thirty-eight count indictment with conspiring to violate U.S. export laws (including the Arms Export Control Act and Export Administration Regulations), illegally exporting defense articles and Commerce controlled electronics to China, money laundering, and causing false Shipper's Export Declarations to be filed with the U.S. Department of Commerce.

ZHEN ZHOU WU a/k/a ALEX WU, YUFENG WEI a/k/a ANNIE WEI, CHITRON-US and CHITRON-SHENZHEN are also charged with illegally exporting electronics components to the Shanghai Academy of Spaceflight Technology, an organization which is designated on the U.S. Department of Commerce's Entity List (according to the Indictment, organizations listed on the Entity List are subject to specific license requirements due to U.S. national security interests). According to the Indictment, Shanghai Academy of Spaceflight Technology "conducts research for the development of, and manufactures, tactical missiles, carrier rockets, space launch vehicles, and satellites." Lastly, the Indictment charges YUFENG WEI a/k/a ANNIE WEI with immigration fraud.

The Second Superseding Indictment alleges that ZHEN ZHOU WU a/k/a ALEX WU founded CHITRON-SHENZHEN in or about April 1996. In March 1998, ZHEN ZHOU WU a/k/a ALEX WU incorporated CHITRON-US, which served as CHITRON-SHENZHEN's purchasing office in the United States. The Indictment further alleges that using CHITRON-US, ZHEN ZHOU WU a/k/a ALEX WU, YUFENG WEI a/k/a ANNIE WEI, and CHITRONSHENZHEN ordered U.S. military products and Commerce controlled electronic components from U.S. companies for end-users in mainland China. Allegedly, at the instruction of ZHEN ZHOU WU a/k/a ALEX WU and YUFENG WEI a/k/a ANNIE WEI, the U.S. companies were instructed to ship all ordered products to the CHITRON-US office located in Waltham, Massachusetts. According to the Indictment, upon receipt by CHITRON-US of the ordered products, the U.S. commodities were inspected by CHITRON-US employees and consolidated into packages, which were exported on a weekly basis to mainland China using freight forwarders in Hong Kong without obtaining the required export licenses from the Department of State and Department of Commerce. According to the Indictment, ZHEN ZHOU WU a/k/a ALEX WU promoted CHITRON on its website (shared by both CHITRON-US and CHITRONSHENZHEN) as a company that could procure military products. Thus, by "2007, according to WU, Chinese military-related institutions (including research institutes) in electronics and aerospace comprised 25% of CHITRON-SHENZHEN's customers."

If ZHEN ZHOU WU a/k/a ALEX WU is convicted of the charges he faces in the Indictment, he faces up to 20 years' imprisonment, to be followed by three years' supervised release, and a $1,000,000 fine. If YUFENG WEI a/k/a ANNIE WEI is convicted of the charges she faces in the Indictment, she faces up to 20 years' imprisonment, to be followed by three years' supervised release, and a $1,000,000 fine. If BO LI a/k/a ERIC LEE is convicted of the charges he faces in the Indictment, he faces up to 20 years' imprisonment, to be followed by three years' supervised release, and a $1,000,000 fine. Both CHITRON-SHENZHEN and CHITRON-US face up to a $1,000,000 fine for each count in the Indictment charging them with illegal export of defense articles. They each also face up to a $500,000 fine for the remaining counts in the Indictment.

The case is being investigated agents of the Department of Commerce, Office of Export Enforcement, U.S. Department of Homeland Security, Immigration and Customs Enforcement, Federal Bureau of Investigation, and Defense Criminal Investigative Service. It is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John Capin of Loucks' Anti- Terrorism and National Security Unit.

The details contained in the Indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.