A four-count indictment has been unsealed, charging Hang Sun, also known as Cody Sun, with conspiracy, wire fraud, smuggling, and a violation of the Arms Export Control Act. The charges stem from an alleged scheme to export defense-related technical data to China and supply the Department of Defense (DOD) with Chinese-origin rare earth magnets for military items.

According to the indictment, between January 2012 and December 2018, Sun conspired to send around 70 drawings containing export-controlled technical data to a Chinese company without a U.S. government license. These drawings belonged to two U.S. companies and were related to various defense systems including aviation and missile targeting systems.

The indictment further claims that Quadrant Magnetics imported rare earth magnets processed in China and sold them to U.S. companies for DOD use in aircraft like the F-16 and F-18. This allegedly violated the Defense Acquisition Regulations System (DFARS), which requires such materials be produced in approved countries, excluding China. Quadrant Magnetics and three employees face separate charges filed in Kentucky.

If convicted, Sun could face up to five years for conspiracy; 20 years for wire fraud; 20 years for exporting technical data without a license; and 10 years for smuggling goods. A federal judge will determine any sentence based on guidelines and statutory factors.

The announcement was made by several officials including Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division and U.S. Attorney Michael A. Bennett for the Western District of Kentucky.

The investigation is being conducted by multiple agencies including the DCIS, FBI, HSI, IRS-CI, Naval Criminal Investigative Service, and Department of Energy’s Office of Inspector General.

Prosecutors involved include Assistant U.S. Attorneys Joshua Judd and Christopher Tieke from Kentucky along with Trial Attorneys Alexander Wharton and Leslie Esbrook from the National Security Division’s Counterintelligence Section.

It is important to note that an indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.