Exporter Charged with Sale of Sensitive Technology to China
Former Cupertino Man Allegedly Sold Restricted Microwave Amplifier Technology to the People’s Republic of China Without a License

SAN JOSE, CA—A federal grand jury in San Jose indicted Fu-Tain Lu, formerly of Cupertino, Calif., as well as two companies Lu founded, on charges that they conspired to violate United States export regulations, United States Attorney Joseph P. Russoniello announced. The indictment also charges Lu with lying to federal agents who were investigating his conduct.

According to the indictment, Lu, 61, along with two companies he founded – Fushine Technology, Inc. (“Fushine”) of Cupertino, Calif, and Everjet Science and Technology Corporation (“Everjet”), based in the People’s Republic of China (“the PRC”) – conspired to export sensitive microwave amplifier technology to the PRC without obtaining the required licenses or other approvals from the United States Department of Commerce. The indictment alleges that the items Fushine shipped and attempted to ship were restricted for export to China for reasons of national security.

The indictment further alleges that the defendants knew about the licensing restrictions and specifically sought to circumvent them. The indictment quotes from an internal company e-mail in which an Everjet employee told a Fushine employee, “Since these products are a little bit sensitive, in case the maker ask you where the location of the end user is, please do not mention it is in China.” The indictment also quotes from another e-mail in which Lu advises a subordinate to pretend that the intended end-user for an item is in Singapore rather than China.
“Exporters may consider the requirement that they obtain a license before shipping controlled technology to restricted countries to be burdensome, yet those regulations are necessary to protect the security of the United States,” Russoniello said. “My office will vigorously prosecute willful violations of export regulations to the fullest extent of the law.”
Russoniello also expressed his appreciation to the agencies who conducted and assisted with the investigation, including the Department of Commerce Office of Export Enforcement, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement, and Customs and Border Protection.

The indictment was returned on April 1 but had been filed under seal until the defendant’s arrest and appearance in federal court.

Lu was arrested at the San Francisco International Airport after disembarking from a flight on the evening of April 7. He made his initial appearance in federal court in San Jose today before United States Magistrate Judge Patricia V. Trumbull. Judge Trumbull ordered the defendant to be held without bail until his detention hearing, which is scheduled to be held before her on April 13 at 1:15 p.m.

For Lu (as opposed to the corporate defendants, for whom the penalties differ), the maximum statutory penalties for Count One – conspiracy to violate export regulations (18 U.S.C. § 371) – and for each of Counts Three and Four – false statements to a government agency (18 U.S.C. § 1001(a)(2)) – are five years imprisonment and a $250,000 fine, or twice the gross financial gain from the offense. The maximum statutory penalty for Count Two – violation of export regulations (50 U.S.C. § 1705(b) and 15 C.F.R. 764.2(a)) – is ten years imprisonment, a $50,000 fine, or twice the gross gain from the offense. Any sentence following conviction, however, would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

David R. Callaway is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen. The prosecution is the result of a long-term, joint investigation by the Department of Commerce Office of Export Enforcement, the Federal Bureau of Investigation, and Immigration and Customs Enforcement.

Please note, an indictment contains only allegations and, as with all defendants, Mr. Lu and the two charged companies should be presumed innocent unless and until proven guilty.

Further Information:

Case #: CR 09-00341 RMW

A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.