Two Extradited From Singapore in Connection With Plot To Illegally Export Military Antennas

Details
U.S. Department of Justice For Immediate Release: December 21, 2012
United States Attorney's Office Contact -- BIS Public Affairs: 202-482-2721

TWO EXTRADITED FROM SINGAPORE IN CONNECTION WITH PLOT

TO ILLEGALLY EXPORT MILITARY ANTENNAS

WASHINGTON – Hia Soo Gan Benson, aka “Benson Hia,” and Lim Kow Seng, aka “Eric Lim,” have been extradited from Singapore to stand trial in the District of Columbia in connection with an alleged fraud conspiracy involving the unlawful export of 55 military antennas from the United States to Singapore and Hong Kong. 

The extradition was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Lisa Monaco, Assistant Attorney General for National Security; John Morton, Director of the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE); Stephanie Douglas, Executive Assistant Director of the FBI’s National Security Branch; and Eric L. Hirschhorn, Under Secretary for Industry and Security at the Commerce Department.

Hia and Seng, both citizens of Singapore, were arrested by Singaporean authorities on Oct. 24, 2011, in connection with a U.S. request for extradition.  They are to make their initial appearance this afternoon in federal court in the District of Columbia after their extradition from Singapore.  Each defendant faces one charge of conspiracy to defraud the United States by violating the Arms Export Control Act.  If convicted, each defendant faces a potential sentence of five years in prison.

An indictment returned in the District of Columbia on Sept. 15, 2010 alleges that Hia and Seng conspired to defraud the United States by causing a total of 55 cavity-backed spiral antennas and biconical antennas to be illegally exported from a Massachusetts company to Singapore and Hong Kong without the required State Department license.  These military antennas are controlled for export as U.S. munitions and are used in airborne and shipboard environments.  

Hia and Seng are alleged to have, among other things, conspired to undervalue the antennas to circumvent U.S. regulations on the filing of shipper’s export declarations to the U.S. government.  They also allegedly used false names and front companies to obtain the antennas illegally from the United States.

The prosecution is being handled by Assistant U.S. Attorney Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division.  The assistance of the Office of International Affairs of the Criminal Division, Donald D. Ashley, the Department of Justice Attaché with responsibility for Singapore, and his predecessor, Robert E. Courtney III, was instrumental to securing extradition of the defendants from Singapore.  

The U.S. Attorney’s Office for the District of Columbia and the National Security Division expressed  appreciation for the work and assistance in this matter provided by the staff of the Directorate of Defense Trade Controls within the Department of State, which licenses and regulates the export and international sales of United States Munitions List items.

An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt.  Every defendant is presumed innocent until, and unless, proven guilty.

 

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Former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., Sentenced to a Year in Prison for Conspiring to Illegally Export High-Performance Coatings to Nuclear Reactor in Pakistan

Details
U.S. Department of Justice For Immediate Release: December 20, 2012
United States Attorney's Office Contact -- BIS Public Affairs: 202-482-2721

FORMER MANAGING DIRECTOR OF PPG PAINTS TRADING

(SHANGHAI) CO., LTD., SENTENCED TO A YEAR IN PRISON FOR

CONSPIRING TO ILLEGALLY EXPORT HIGH-PERFORMANCE

COATINGS TO NUCLEAR REACTOR IN PAKISTAN

-Defendant Also Ordered to Pay a $100,000 Fine, Perform Community Service-

WASHINGTON - Xun Wang, a former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese subsidiary of United States-based PPG Industries, Inc., was sentenced today to a year in prison for conspiring to violate the International Emergency Economic Powers Act. 

The sentence was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, and Eric L. Hirschhorn, U.S. Department of Commerce Under Secretary for Industry and Security.

Wang, 52, was sentenced by the Honorable Emmet G. Sullivan of the U.S. District Court for the District of Columbia. In addition to the prison time, Judge Sullivan ordered Wang to pay a $100,000 fine and to perform 500 hours of community service.

Wang pled guilty to the conspiracy in November 2011, and agreed, as part of her plea, to cooperate with the government’s investigation.  Her cooperation led to the Dec. 3, 2012, guilty plea by the China Nuclear Industry Huaxing Construction Co., Ltd. That plea is believed to have marked the first time that a People’s Republic of China corporate entity has entered a plea of guilty in a U.S. criminal export matter. As part of its plea agreement, Huaxing agreed to the maximum criminal fine of $2 million, $1 million of which will be stayed pending its successful completion of five years of corporate probation. 

“Xun Wang was the most senior PPG Paints Trading corporate executive involved in this unlawful export scheme,” said U.S. Attorney Machen. “This prosecution has already held corporations accountable for their violations of U.S. export laws, but today's prison sentence shows our determination to hold corporate executives personally responsible when they compromise our nation's security in the pursuit of corporate profits.”

The investigation was led by the Department of Commerce’s Bureau of Industry and Security (BIS). In November 2011, Wang also settled an administrative proceeding brought by the Department of Commerce regarding the same subject matter as her criminal case.  As part of her settlement agreement, Wang has agreed to pay a civil penalty of $200,000 with another $50,000 payment suspended, and to be placed on the Department of Commerce’s Denied Persons’ list for a period of five years with an additional five years suspended.  As a Denied Person, Wang will be prohibited from directly or indirectly participating in any transaction involving a commodity, software or technology exported, or to be exported, from the United States that is subject to Department of Commerce regulations. 

“This case clearly demonstrates our resolve to hold individuals responsible for violations of our export control laws,” said Under Secretary Hirschhorn. “Individuals can no longer hide behind a corporate veil.  BIS Special Agents will continue to leverage our unique authorities to pursue violators anywhere in the world.”

In both the criminal and administrative cases, Wang is accused of conspiring to export. reexport, and transship high-performance epoxy coatings to the Chashma II Nuclear Power Plant (Chashma II) in Pakistan, a nuclear reactor owned and/or operated by the Pakistan Atomic Energy Commission, an entity on the Department of Commerce’s Entity List.

The Pakistan Atomic Energy Commission is the science and technology organization in Pakistan responsible for Pakistan’s nuclear program, including the development and operation of nuclear power plants in Pakistan. In November 1998, following Pakistan’s first successful detonation of a nuclear device, the Commerce Department’s Bureau of Industry and Security added the Pakistan Atomic Energy Commission, as well as its subordinate nuclear reactors and power plants, to the list of prohibited end users under the Export Administration Regulations.

As a restricted end-user, a United States manufacturer seeking to export, reexport or transship any items subject to the Export Administration Regulations to the Pakistan Atomic Energy Commission, or its nuclear power plants or reactors, would first need to obtain a license from the Department of Commerce in the District of Columbia.  

Wang’s conviction is related to the Dec. 21, 2010, guilty plea of PPG Paints Trading to a four-count information in the U.S. District Court for the District of Columbia.  Together, PPG Paints Trading and its parent company, PPG Industries, paid $3.75 million in criminal and administrative fines and more than $32,000 in restitution. The combined amount of criminal and civil fines represented one of the largest monetary penalties for export violations in the history of the Bureau of Industry and Security.

According to Wang’s plea documents, in January 2006, PPG Industries sought an export license for the shipments of coatings to Chashma II.  In June 2006, the Department of Commerce denied that license application.  Following that denial, Wang and her co-conspirators agreed upon a scheme to export, reexport and transship PPG Industries’ high-performance epoxy coatings from the United States to Chashma II, via a third-party distributor in People’s Republic of China, without first having obtained the required export license from the Department of Commerce.

The plea documents further allege that from around June 2006 through around March 2007, Wang and her co-conspirators intentionally concealed from PPG Industries that the coatings would continue to be delivered to Chashma II.  Further, members of the conspiracy stated, or caused to be stated, that the coatings were to be used at a nuclear power plant in China, the export of goods to which did not require a license from the Department of Commerce. Through these means, Wang and her co-conspirators allegedly exported three shipments of coatings from the United States to Chashma II without the required Commerce Department license.

In announcing the sentence, U.S. Attorney Machen and Under Secretary Hirschhorn commended Special Agents James Fuller and Donald Pearce, who worked under the direction of Special Agent in Charge Sidney M. Simon and Assistant Special Agent in Charge Jonathan Carson, as well as Attorney Advisor R. Elizabeth Abraham, all of the Department of Commerce’s Bureau of Industry and Security.  They also thanked Assistant U.S. Attorney G. Michael Harvey of the U.S. Attorney’s Office for the District of Columbia, who prosecuted this matter.

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Taiwanese National Pleads Guilty to Attempting to Illegally Export Aerospace-Grade Carbon Fiber

Details
U.S. Department of Justice For Immediate Release: December 11, 2012
United States Attorney's Office Contact -- BIS Public Affairs: 202-482-2721

TAIWANESE NATIONAL PLEADS GUILTY TO ATTEMPTING TO ILLEGALLY EXPORT

AEROSPACE-GRADE CARBON FIBER

Defendant Sought Thousands Of Pounds Of High-Tech Material

Yen Ling Chen, a citizen of Taiwan, pled guilty today at the federal courthouse in Brooklyn, New York, before the Honorable Nicholas G. Garaufis to violating the International Emergency Economic Powers Act by attempting to export weapons-grade carbon fiber from the United States to Taiwan. According to the indictment and facts presented today in court, Chen was arrested in the United States after attempting to negotiate a deal to acquire tons of the specialized fiber, which has applications in the defense and aerospace industries and is therefore closely regulated by the United States Department of Commerce.

The plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Sidney Simon, Special Agent-in-Charge, U.S. Department of Commerce (DOC), Office of Export Enforcement, New York Field Office.

On April 25, 2012, the defendant contacted an undercover agent in Brooklyn via the Internet and indicated that she and others were interested in purchasing several tons of carbon fiber. Shortly thereafter, the defendant and an accomplice wired $1,000 to a United States bank account, as a deposit on a sample. In furtherance of the export scheme, and in an effort to secure a source of the controlled commodity, the defendant traveled from Taiwan to the United States on July 5, 2012, for the purpose of obtaining the sample. During a meeting with an undercover agent the following day, the defendant assisted in negotiating the deal and making arrangements for the delivery of the sample to Taiwan for further analysis.

Certain types of carbon fiber, such as the type defendant Chen sought to acquire in this case, are closely controlled for nuclear non-proliferation and anti-terrorism reasons. The regulation of carbon fiber falls under the jurisdiction of the Department of Commerce, which reviews and controls the export of certain goods and technology from the United States to foreign countries. In particular, the Commerce Department has placed restrictions on the export of goods and technology that it has determined could make a significant contribution to the military potential or nuclear proliferation of other nations, or that could be detrimental to the foreign policy or national security of the United States.

Carbon fiber composites are ideally suited to applications where strength, stiffness, lower weight, and outstanding fatigue characteristics are critical requirements. These composites also can be used in applications where high temperature, chemical inertness, and high damping are important. The two main applications of carbon fiber are in specialized technology, which includes aerospace and nuclear engineering, and in general engineering and transportation. In addition, certain carbon fiber-based composites, such as the material sought by the defendant, are used in military aircraft.

When sentenced, Chen faces up to 20 years in prison.

“The defendant tried to circumvent laws that are intended to protect our national security by preventing specialized technologies from falling into the wrong hands,” stated United States Attorney Lynch. “Today’s conviction should leave no doubt that the United States will vigorously prosecute violations of our laws that help maintain the superiority of our armed forces on land, at sea, and in the air.” Ms. Lynch added that the government’s investigation is ongoing.

“In the wrong hands, this sensitive commodity could be used to produce materials that threaten the national security of the United States,” said HSI Special Agent-in-Charge Hayes. “Homeland Security Investigations will continue to remain vigilant in its mission to protect our citizens and residents.”

“Today’s plea demonstrates our resolve to prevent potentially dangerous technologies with both nuclear and missile applications from falling into the wrong hands. We will continue to work hand in hand with our law enforcement partners in the worldwide pursuit of those who flout our export control laws,” stated DOC Special Agent-in-Charge Simon.

The government’s case is being prosecuted by Assistant United States Attorneys Seth DuCharme and David Sarratt, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section. Assistance was also provided by Trial Attorney Dan E. Stigall of the Department of Justice Office of International Affairs.

The Defendant:
YEN LING CHEN
Age: 53

 

Iranian Corporation, Officers Accused of Illegally Exporting More Than $30 Million in Goods from U.S. to Iran

Details
U.S. Department of Justice For Immediate Release: December 19, 2012
United States Attorney's Office Contact -- BIS Public Affairs: 202-482-2721

IRANIAN CORPORATION, OFFICERS ACCUSED OF ILLEGALLY EXPORTING

MORE THAN $30 MILLION IN GOODS FROM U.S. TO IRAN

Hundreds of Digital Media Equipment Purchased from Company in Burke, Va.

ALEXANDRIA, Va. – An Iranian corporation, its subsidiaries and several of its officers and business partners have been charged in Alexandria, Va., accused of allegedly exporting more than $30 million in computer goods from U.S. companies to Iran, in violation of trade sanctions imposed on Iran, which a state sponsor of terrorism.

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Washington, D.C.; and Rick Shimon, Special Agent in Charge of the Department of Commerce’s Office of Export Enforcement’s Washington Field Office, made the announcement.

“The United States has an export embargo against Iran – and it’s part of our job to enforce it,” said U.S. Attorney MacBride. “BMWW is accused of taking meticulous steps to get around the embargo – and allegedly made profits hand over fist doing so.  It is vital that we continue to uphold and enforce export embargoes to isolate countries that put the United States at risk.”

“Export enforcement is a core mission of Homeland Security Investigations,” said Special Agent in Charge Torres. “This investigation is an example of HSI working with our law enforcement partners to prevent countries from obtaining and using U.S.-origin goods to the detriment of the U.S. and to enhance our national security globally.”

“The Office of Export Enforcement is committed to working with our law enforcement partners to stem the flow of high technology computer components that are illegally smuggled out of the country,” said Special Agent in Charge Shimon. “We will continue to pursue arrests and convictions that ultimately shut-down these illicit schemes.”

Charged through an indictment and criminal complaint include Business Machinery World Wide, an Iranian corporation based in Tehran, Iran; three of its subsidiary companies located in Dubai, United Arab Emirates; and nine officers and individuals. They are accused of conspiring to defraud the United States and conspiring to violate the International Emergency Economic Powers Act. If convicted, those charged face a maximum penalty of 25 years in prison.

The indictment and criminal complaint were made public after two alleged conspirators – Alireza Beshcari and Mikaeil Ghahramani – were arrested in Los Angeles, Calif.

According to the indictment, beginning in 2008, BMWW began soliciting and receiving computer goods from the United States knowing that this conduct was prohibited under United State law.  To avoid detection and to facilitate the shipment of goods from the United States to Iran, BMWW directed the U.S. goods to be shipped to its subsidiary companies in the United Arab Emirates where similar trade restrictions are not imposed. These subsidiaries were created solely to illicitly transship the U.S. goods to Iran and evade the export embargo.

The indictment alleges that BMWW and its subsidiaries and officers committed these acts willfully, communicating with each other that because a company is “based in USA and has representatives globally…if they understand that the customer is an Iranian they will stop selling due to embargo on Iranian companies. Make sure that they will never find out that the manager of [a subsidiary] is an Iranian.”

From May 2010 through April 2011, the indictment alleges that officers at BMWW, while in Iran, ordered nearly $320,000 in digital media equipment from a company based in Burke, Va. The equipment was shipped to a BMWW subsidiary in Dubai and then forwarded on to Iran.

Those charged include the following:
 

  • BMWW, aka Jahan Gostar Co., the parent company operating in Iran
  • BMWW DWC LLC, which later changed its name to Servex DWC, LLC, a subsidiary of BMWW based in Dubai that allegedly received $2.8 million in U.S.-origin goods for transshipment to Iran.
  • Ariana General Trading, a subsidiary of BMWW based in Dubai that allegedly received more than $28 million in U.S.-origin goods for transshipment to Iran.
  • Alireza Faraj Tabrizy, aka Ali Faraji, a citizen of Iran and the managing director of BMWW, Ariana and Servex.
  • Siyavash Aliakbar Yazdanfar, a citizen of Iran and the international affairs manager for BMWW.
  • Ayoub Ali Ahmadi, the former lead manager at Ariana and current lead manager for Servex allegedly responsible for coordinating transshipment of U.S.-origin goods from Dubia to Iran.
  • Michelle Liboon Diaz, the former front-line manager at Ariana and current front-line manager at Servex allegedly responsible for coordinating transshipment of U.S.-origin goods from Dubia to Iran.
  • Esmaeil Ghahremani, an Iranian citizen with ties to the United States who allegedly relies on BMWW to unlawfully export U.S.-origin goods to Iran through Dubai.
  • Ehsan Mahmoud Ghorbanali Barati, an Iranian citizen who allegedly relies on BMWW to unlawfully export U.S.-origin goods to Iran through Dubai.
  • Amir Mazlomian, a naturalized U.S. citizen of Iranian descent living in Newport Coast, Calif., and an officer with D&A Trading Corp., which has allegedly shipped nearly $300,000 in computer-related goods to Iran through BMWW and Ariana.
  • Alirez Beshcari, a citizen of the Netherlands and a legal permanent resident in the U.S. living in Laguna Niguel, Calif., who owns ATA Trade Co., which has allegedly shipped nearly $800,000 in electronic goods to Iran through BMWW and Ariana.
  • Mikaeil Ghahramani, of Santa Ana, Calif., who owns Notebook Spectrum, which has allegedly shipped nearly $2 million in electronic equipment to Iran through BMWW and Ariana.

This investigation is being conducted by HSI’s Washington Field Office and the Department of Commerce’s Office of Export Enforcement.  Assistant United States Attorney Dennis Fitzpatrick is prosecuting the case on behalf of the United States, with assistance from the Counterespionage Section of the National Security Division at the Department of Justice.

Criminal indictments and complaints are only charges and not evidence of guilt.  A defendant is presumed to be innocent until and unless proven guilty.

Manhattan U.S. Attorney Announces Arrest of Queens Resident for the Export of Military-Use Items to Taiwan And Attempting to Export Them to China

Details
U.S. Department of Justice For Immediate Release: December 6, 2012
United States Attorney's Office Contact -- BIS Public Affairs: 202-482-2721

MANHATTAN U.S. ATTORNEY ANNOUNCES ARREST OF QUEENS RESIDENT FOR

THE EXPORT OF MILITARY-USE ITEMS TO TAIWAN AND ATTEMPTING TO EXPORT

THEM TO CHINA

Preet Bharara, the United States Attorney for the Southern District of New York, Sidney Simon, the Special Agent-in-Charge of the U.S. Commerce Department’s Bureau of Industry and Security’s Office of Export Enforcement New York Field Office (“DOC”), and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), today announced the arrest of MARK HENRY, a United States citizen and a resident of Queens, New York, in connection with a scheme to illegally export defense articles and goods with military applications from the U.S. to Taiwan and China. HENRY, 49, was arrested earlier today at his home in Queens, and was presented in Manhattan federal court before U.S. Magistrate Judge Gabriel Gorenstein this afternoon.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, Mark Henry shipped sensitive military and dual-use materials in violation of federal laws that seek to prevent such materials from ending up in the wrong hands. His arrest today demonstrates, yet again, the seriousness with which law enforcement takes its responsibility to catch and prosecute those who attempt to export prohibited items and materials and to violate trade embargos.”

DOC Special Agent-in-Charge Sidney Simon: “Preventing the illegal export of sensitive U.S origin commodities that enhance the military capabilities of foreign nations is our top priority. We are constantly striving to maintain the technological advantage of U.S fighting forces. I applaud the cooperative efforts of the Justice and Commerce Departments and the FBI which led to today’s arrest.”

FBI Assistant Director-in-Charge George Venizelos: “The illegal export of our intellectual property and restricted military material may not grab headlines, but it presents serious implications for our nation’s security. Shipping restricted products might line your pockets, but it could also land you in prison.”

According to the allegations in the Indictment unsealed today in Manhattan federal court:

From April 2009 through September 2012, HENRY operated an export company based in New York City that shipped goods from suppliers located in the U.S. to customers in Asia –

specifically China and Taiwan. HENRY shipped military-grade materials that can be used as a protective coating for rocket nozzles, and which are designated as defense articles on the U.S. Munitions List, to customers in Taiwan. He also attempted to ship microwave amplifiers, which have both commercial and military uses and are listed on the Commerce Control List, to China. HENRY did not apply for or receive the requisite licenses for these shipments.

* * *

The Indictment charges HENRY in three counts: Count One – conspiracy to violate the Arms Export Control Act; Count Two – a substantive violation of the Arms Export Control Act and the International Traffic in Arms Regulations; and Count Three – an attempt to violate the International Emergency Economic Powers Act. Count One carries a maximum sentence of five years in prison. Counts Two and Three each carry a maximum sentence of 20 years in prison. HENRY’s case is assigned to U.S. District Judge Jesse M. Furman, and the defendant will be arraigned before Judge Furman tomorrow at 9:30 a.m.

Mr. Bharara praised the extraordinary investigative work of the New York Field Office of the DOC’s Bureau of Industry and Security’s Office of Export Enforcement and the New York Field Office of the FBI’s Counterintelligence Division. Mr. Bharara also thanked the U.S. Department of Justice’s National Security Division.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Aimee Hector and Michael Lockard are in charge of the prosecution.

The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.

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