A UCLA professor faces 219 years in prison for smuggling chips with military applications to China

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A UCLA professor and electrical engineer was found guilty of conspiracy to violate the International Emergency Economic Powers Act

A UCLA professor and electrical engineer has been found guilty of 18 federal crimes, including participating in a scheme to illegally obtain integrated circuits with military applications and then exporting them to China without the required export license, the U.S. Department of Justice reported.

Leer en español: Un profesor enfrenta 219 años de prisión por contrabando de chips con aplicaciones militares

United States District Judge John A. Kronstadt will now schedule a sentencing hearing, where Shih faces a statutory maximum sentence of 219 years in federal prison. After a six-week trial, Yi-Chi Shih, 64, was found guilty of conspiracy to violate the International Emergency Economic Powers Act (IEEPA), a federal law that makes certain exports illegal. The jury also found Shih guilty of mail fraud, wire fraud, subscribing to a false tax return, and making false statements to a government among other crimes.

Assistant Attorney General for National Security John C. Demers said that “the [Justice] Department’s China Initiative is focused on preventing and prosecuting thefts of American technology and intellectual property for the benefit of China. This defendant schemed to export to China semiconductors with military and civilian uses, then he lied about it to federal authorities and failed to report income generated by the scheme on his tax returns,”  United States Attorney Nick Hanna added.

Shih and co-defendant, Kiet Ahn Mai, 65, of Pasadena, California, conspired to illegally provide Shih with unauthorized access to a protected computer of a United States company that manufactured wide-band, high-power semiconductor chips known as monolithic microwave integrated circuits (MMICs). According to the Justice Department, Shih defrauded the U.S. company out of its proprietary, export-controlled items, including its design services for MMICs, according to trial evidence. 

As part of the scheme, Shih 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 Mai concealed Shih’s actual intent to transfer the U.S. company’s products to the People’s Republic of China.  The MMICs that Shih sent to China required a license from the Commerce Department before being exported to China, and a permit was never sought or obtained for this export.

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“The victim company’s semiconductor chips have several commercial and military applications, and its customers include the Air Force, Navy and the Defense Advanced Research Projects Agency.  MMICs are used in missiles, missile guidance systems, fighter jets, electronic warfare, electronic warfare countermeasures, and radar applications” the Justice Department added.

The semiconductor chips were shipped to Chengdu GaStone Technology Company (CGTC), a Chinese company that was building an MMIC manufacturing facility in Chengdu. Shih was the president of CGTC, a company that was placed on the Commerce Department’s Entity List in 2014 due to its involvement in activities affecting the national security and foreign policy interest of the United States. In particular, the company had been involved in the illicit procurement of commodities and items for unauthorized military end use in China.”

Court documents showed that Shih used a Hollywood Hills-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. Pullman Lane received financing from a Beijing-based company that was placed on the Entity List the same day as CGTC again due to its involvement in activities affecting the national security and foreign policy interest of the United States, the documents stated.

“Shih and Mai were indicted in this case in January 2018. Mai pleaded guilty in December 2018 to one felony count of smuggling and is scheduled to be sentenced on September 19, at which time he will face a statutory maximum sentence of 10 years in federal prison”, the Justice Department concluded.

The Federal Bureau of Investigation investigated this case together with the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, and IRS Criminal Investigation, with assistance from the Royal  Canadian Mounted Police.

LatinAmerican Post Staff