An indictment unsealed this week charges Cheng Bo (also known as Joe Cheng), a 45-year-old Chinese national, with participating in a criminal conspiracy to ship U.S. power amplifiers to China in violation of U.S. export laws from 2012-2015, the U.S. Department of Justice said in a press release Friday (Jan. 29). The products were alleged to have been used for possible Communist Party military use.
The Justice Department also said Avnet Asia admitted criminal liability for the former employee’s actions and agreed to pay restitution totaling more than $3.2 million.
Cheng Bo is a former employee of Avnet Asia Ltd. “Avnet Asia is a Singaporean company and a global distributor of electronic components and related software. The company agreed to pay a financial penalty of $1,508,000 to the United States to resolve criminal liability arising from the actions of former employees such as Bo Cheng.
As part of the non-prosecution agreement, Avnet admitted to illegally conspiring with Cheng Bo to ship U.S. goods subject to export controls to China and to be responsible for possible military use. The company also admitted responsibility for the criminal conduct of another former employee who, between 2007 and 2009, illegally shipped U.S. commodities to China and Iran without a license. This conduct violated the U.S. International Emergency Economic Powers Act.
The U.S. Department of Commerce also announced Friday that Avnet has agreed to pay an additional $1.721 million as part of a $3.229 million administrative penalty to resolve violations of the U.S. Export Administration Regulations.
According to the indictment, Bo Cheng was a sales account manager at Avnet who submitted documents on behalf of a Hong Kong-based customer for the purchase of U.S. goods subject to export controls, including power amplifiers. Cheng provided false statements to the U.S. manufacturer of the power amplifiers that his customer would use the power amplifiers in Hong Kong, when in fact Cheng knew that the goods would be shipped illegally from Hong Kong to China.
The indictment noted that Cheng Bo had an ownership interest in the Hong Kong company.
As part of the non-prosecution agreement, Avnet admitted that from 2012 to 2015, Cheng facilitated at least 18 shipments of export-controlled goods from the United States to Hong Kong, knowing that the goods would subsequently be shipped to China, and that the value of the illegally exported goods was at least $814,000.
“Avnet also admitted that from 2007 to 2009, another sales account manager, who was based in Singapore, conspired to violate U.S. export control laws and economic sanctions. The Singapore-based sales account manager helped two Singaporean business organizations ship U.S. goods to Iran and China, including helping to create documents falsely stating that the goods would be used only in Singapore. The sales account manager facilitated the export of 29 shipments of “Amphuria Pacific” from the United States, knowing that the goods would subsequently be shipped to Iran or China. The value of these shipments was at least $347,000. “Neither Avnet nor anyone else applied for an export license from U.S. government authorities.
If convicted, Cheng Bo faces up to 20 years in prison and a fine of up to twice the value of the property involved in the illegal transactions.
“Avnet employees repeatedly falsified documents in order to send export-controlled goods with potential military applications to China.” John C. Demers, assistant secretary for national security at the Department of Justice, said, “What China [the Communist Party of China] cannot develop on its own, it obtains illegally through others. This is another example of proxy behavior promoting the pernicious interests of the PRC (Chinese Communist Party).”
“The People’s Republic of China (CCP) is relentless in its quest to obtain U.S. technology, much of which could be used for military purposes,” said FBI Assistant Director for Counterintelligence Alan E. Kohler Jr. will work equally tirelessly to identify and deter those who violate export controls when doing business with China. Let’s be clear, this is not normal business, this is illegal, and individuals and companies will pay the price for this violation.”
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