An indictment was unsealed this week charging Cheng Bo, also known as Joe Cheng, a 45-year-old national of the People’s Republic of China, with participating in a criminal conspiracy from 2012-2015 to violate U.S. export laws by shipping U.S. power amplifiers to China.
Cheng’s former employer, Avnet Asia Pte. Ltd., a Singapore company and global distributor of electronic components and related software, agreed to pay a financial penalty to the United States of $1,508,000 to settle criminal liability for the conduct of its former employees, including Cheng. As part of a non-prosecution agreement, Avnet Asia admitted responsibility for Cheng’s unlawful conspiracy to ship export-controlled U.S. goods with potential military applications to China, and also for the criminal conduct of another former employee who, from 2007-2009, illegally caused U.S. goods to be shipped to China and Iran without a license. This conduct violated the International Emergency Economic Powers Act.
The U.S. Department of Commerce (DOC) is also announcing today that Avnet Asia has agreed to pay an additional $1,721,000 as part of a $3,229,000 administrative penalty to resolve violations of the Export Administration Regulations.
“Avnet’s employees repeatedly falsified documentation in order to send export-controlled goods with potential military applications to China,” said Assistant Attorney General John C. Demers of the National Security Division. “What China cannot develop itself, it acquires illegally through others. This is yet another example of a proxy acting to further China’s malign interests.” “We will not abide individuals or business organizations that would seek to harm our national security by illegally providing coveted U.S. goods with potential military applications to Iran or China,” said Acting U.S. Attorney Michael R. Sherwin for the District of Columbia. “We will pursue wrongdoers no matter where they are located in the world.” "The People's Republic of China is relentless in its pursuit of U.S. technology, much of which can be used for military purposes,” said Assistant Director Alan E. Kohler Jr. of the FBI's Counterintelligence Division. “The FBI is just as relentless in identifying and stopping those who violate export controls while doing business with China. Let us be clear, this is not business as usual. It is illegal and individuals and companies will pay a price for such violations." “The indictment unsealed today serves as a warning to those who violate export control laws designed to protect our national and economic security,” said Special Agent in Charge Michael F. Paul of the FBI’s Minneapolis Field Office. “The settlement with Avnet Asia announced today represents years of hard work on one of the FBI’s highest priorities – stopping the illegal export of U.S. technology to China. Regardless of their location, global corporations have a responsibility to follow U.S. law when selling American technology. Criminal and civil penalties await companies and individuals who fail to adhere to laws protecting sensitive U.S. technologies.” “The Office of Export Enforcement remains committed to enforcing our nation’s export control laws by investigating domestic and overseas companies who intentionally divert sensitive U.S.-origin dual-use commodities to prohibited end users and nations without the required licenses or license exceptions,” said Acting Special Agent in Charge Aaron Tambrini of DOC Office of Export Enforcement’s (DOC-OEE) Chicago Field Office.
“The export of sensitive technology items to China or anywhere else in the world is tightly regulated for good reason,” said Special Agent in Charge David A. Prince of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Los Angeles. “One of HSI’s top enforcement priorities is preventing U.S. military and dual-use products and sensitive technology from falling into the hands of those who might seek to harm America or its interests. We will continue to work closely with our law enforcement partners to aggressively target and investigate those who jeopardize our nation’s security – or the welfare of those devoted to protecting it.” According to the indictment unsealed today, Cheng was a sales account manager with Avnet Asia, and he operated as a sales representative to a Hong Kong-based customer with whom Cheng had an ownership interest. Cheng submitted paperwork on behalf of the customer to purchase export-controlled U.S. goods, including power amplifiers. Cheng caused false statements to be made 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 illegally shipped from Hong Kong to China.
As part of the non-prosecution agreement, Avnet Asia admitted that from 2012-2015, Cheng caused at least 18 separate shipments of export-controlled goods to be sent from the United States to Hong Kong, knowing that the goods were intended to be subsequently shipped to China, and that the value of these illegal exports was at least $814,000. Avnet Asia also admitted that another sales account manager, this one based in Singapore, conspired to violate U.S. export control laws and economic sanctions from 2007 through 2009. The Singapore-based sales account manager helped two Singapore business organizations in their efforts to ship U.S. goods to Iran and China, including by helping to create documents falsely stating that the goods were destined only for Singapore. The Singapore-based sales account manager caused at least 29 separate Avnet Asia shipments of goods to be exported from the United States, knowing that the goods were intended to be subsequently shipped to Iran or China. The value of these goods was at least $347,000. Neither Avnet Asia nor anyone else applied for an export license from U.S. government authorities.
If convicted, Cheng would face up to 20 years of imprisonment and a fine of up to twice the value of the property involved in the illegal transactions. The facts alleged in the indictment are allegations, and criminal defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The FBI’s Minneapolis Field Office, DOC-OEE’s Chicago Field Office, and HSI Los Angeles investigated the case. Assistant U.S. Attorneys Michael J. Friedman and Thomas A. Gillice, and Justice Department National Security Division Trial Attorney David C. Recker, are representing the United States.
Source: US Department of Justice
