Home San Francisco Press Releases 2012 Exporter Sentenced to Prison for Selling Sensitive Technology to China

Exporter Sentenced to Prison for Selling Sensitive Technology to China
Sold Restricted Microwave Amplifiers to People’s Republic of China without a License

U.S. Attorney’s Office October 31, 2012
  • Northern District of California (415) 436-7200

SAN JOSE, CA—Fu—Tain Lu, of Cupertino, California, was sentenced Monday to 15 months in prison for selling sensitive microwave amplifiers to the People’s Republic of China without a license, United States Attorney Melinda Haag announced.

Lu entered a guilty plea on November 21, 2011. In pleading guilty, he admitted that he was the owner and founder of Fushine Technology Inc. (Fushine), a California corporation formerly located in Cupertino. Fushine was an exporter of electronic components primarily used in communications, radar, and other applications. At the time of the offense, Fushine had a sales representative agreement with Miteq Components Inc. (Miteq), a New York-based manufacturer of microwave and satellite communications components and subsystems.

Lu, 65, admitted that, on March 1, 2004, Fushine submitted a purchase order to Miteq for one microwave amplifier and requested that Miteq notify Fushine immediately if an export license was required. Miteq responded that the part was controlled for export to China. Nonetheless, on April 2, 2004, Fushine exported the amplifier to co-defendant Everjet Science and Technology Corporation (Everjet), located in the People’s Republic of China, without having obtained a license or license exception from the United States Department of Commerce. Lu further admitted in the plea agreement that the amplifier he shipped was restricted for export to China for reasons of national security.

“Export regulations are vital to protecting the competitiveness and national security of the United States,” U.S. Attorney Haag said. “Our export controls depend on truthful compliance from exporters. My office will continue to work vigorously with our law enforcement partners to prosecute willful violations of those regulations.”

U.S. Attorney Haag expressed her 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 (ICE), Homeland Security Investigations (HSI); and U.S. Customs and Border Protection.

“Monday’s sentencing demonstrates the ongoing cooperation with our federal law enforcement partners to aggressively pursue and prosecute those who violate our export control laws,” said Julie Salcido, Special Agent in Charge of the U.S. Commerce Department’s Bureau of Industry and Security’s Office of Export Enforcement San Jose Field Office. “We will continue to work tirelessly to hold accountable those who choose to jeopardize U.S. national security interests.”

“The FBI works hand-in-hand with our law enforcement partners and the U.S. Attorney’s Office to address commercial and economic crimes of opportunity,” said Acting Special Agent in Charge Joel Moss of the FBI San Francisco Division. “This case is an example of our determination to combat the transfer of sensitive U.S. technology that have national security implications and our commitment to a fair and secure commercial arena.”

“The export of these defense articles to the People’s Republic of China or anywhere else in the world is tightly regulated for good reason,” said Clark Settles, special agent in charge of Homeland Security Investigations (HSI) San Francisco. “One of HSI’s top enforcement priorities is preventing U.S. military products and sensitive technology from falling into the hands of those who might seek to harm America or its interests. Requiring exporters to obtain licenses before shipping controlled technology to restricted countries is a vital precaution in ensuring our nation’s security.”

Lu, along with the two corporate defendants, Fushine and Everjet, were first indicted on April 1, 2009. A superseding indictment was returned on February 17, 2010. In addition to the count of conviction, the indictment also charged him with conspiring to violate United States export regulations and lying to federal agents who were investigating that conduct. The indictment alleged that the defendants knew about the licensing restrictions and specifically sought to circumvent them through various means, including by lying about the recipient and the intended end-use for the item being shipped. The court specifically found that Lu had lied to special agents from the Department of Commerce about, among other things, his relationship with Everjet.

In addition to the prison sentence, the court ordered Lu to serve three years of supervised release, to pay a $5,000 fine, and to forfeit 36 microwave amplifiers worth approximately $136,000. The sentence was imposed by United States District Court Judge Ronald M. Whyte.

David R. Callaway is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen and Rawaty Yim. The prosecution is the result of a joint investigation by the Department of Commerce; the Federal Bureau of Investigation; and U.S. Immigrations and Customs Enforcement, Homeland Security Investigations.

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