The U.S. Department of Justice announced Friday (Jan. 19) that an indictment was released this week against Cheng Bo, 45, a citizen of the People’s Republic of China, for his alleged participation in a criminal conspiracy to violate U.S. export laws by shipping U.S. power amplifiers to China between 2012 and 2015.
The Justice Department also announced that Cheng’s former employer, Avnet Asia Pte. Ltd, agreed to pay a $1.5 million and $8,000 fine to the U.S. government to hold Cheng and other former employees criminally liable for their actions. The company is a Singaporean company and global distributor of electronic components and related software. As part of the non-prosecution agreement, the company admitted liability for Cheng Bo’s illegal conspiracy to ship products to China that were subject to U.S. export controls and had potential military applications, and for the actions of another former employee who, between 2007 and 2009, caused shipments to China and Iran to be made without a license.
The U.S. Department of Commerce also announced the same day that Avnet Asia agreed to pay an additional $1.721 million as part of a $3.229 million administrative fine to resolve violations of the U.S. Export Administration Regulations.
“Avnet employees repeatedly falsified documents in order to ship goods to China that were subject to export controls and had potential military applications,” said John C. Demers, assistant attorney general for national security affairs. “What China cannot develop on its own, it obtains illegally through others. This is yet another example of agents acting to advance China’s malicious interests.”
“We will not stand idly by individuals or businesses that attempt to harm our national security by illegally supplying Iran or China with coveted U.S. goods that have potential military applications,” said Michael R. Sherwin, acting U.S. attorney for the Capital District of Washington. “We will pursue people who have done bad things, no matter where they are in the world.”
“The People’s Republic of China is persistently seeking U.S. technology, most of which could be used for military purposes,” said FBI Assistant Director for Counterintelligence Alan E. Kohler Jr. “The FBI is also working relentlessly to identify and stop those who violate export controls when doing business with China. Let’s make it clear that this is not business as usual. This is illegal and those individuals and companies will pay the price for these types of violations.”
According to the indictment released Friday, Cheng Bo was a sales account manager for Avnet Asia and served as a sales representative for a Hong Kong-based client with whom he had an ownership interest. The U.S. Justice Department said Cheng Bo filed documents on behalf of the customer to purchase U.S. products subject to export controls, including power amplifiers. He is accused of causing a U.S. power amplifier manufacturer to receive forged documents thinking the products would be used in Hong Kong when, in fact, Cheng Bo knew the products would be shipped illegally from Hong Kong to China.
As part of the non-prosecution agreement, Avnet Asia admitted that between 2012 and 2015, Cheng Bo caused export-controlled goods to be shipped from the United States to Hong Kong on 18 separate occasions when their true purpose was to be subsequently shipped to China, and that these illegal exports were valued at at least $814,000, the DOJ said. Avnet Asia also admitted that a Singapore-based sales account manager for the company conspired to violate U.S. export control laws and economic sanctions by shipping at least $347,000 worth of U.S. products to Iran and China between 2007 and 2009.
If convicted, Cheng Bo faces up to 20 years in prison and a fine of up to twice the value of the illegally traded property. The DOJ statement mentions that the facts alleged in the indictment are all allegations and that the defendants are presumed innocent until found guilty.
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