Chen Lin, a 65-year-old Chinese national, has pleaded guilty to illegally exporting U.S. semiconductor equipment to a U.S.-sanctioned company in China. This was revealed by the U.S. Attorney’s Office for the Northern District of California. Chen admitted to knowingly attempting to purchase a wafer-cutting machine with the intention of selling it to a Chinese company on the Entity List, which is an export blacklist maintained by the Commerce Department’s Bureau of Industry and Security (BIS), as per a press release from the Department of Justice (DOJ) on Thursday.
Wafer-cutting machines are precise tools used in the semiconductor manufacturing process to cut semiconductor wafers into smaller pieces.
In December 2020, a federal grand jury indicted Chen on charges of conspiracy to violate the International Emergency Economic Powers Act (IEEPA), submitting false electronic export information, smuggling, and IEEPA violations. As part of his plea agreement, Chen pleaded guilty to causing an unlawful export in violation of the IEEPA.
Chen was arrested in Chicago in April and is currently out on bond. His sentencing hearing is scheduled for January 28 next year. If convicted, Chen could face a maximum prison sentence of 20 years and a fine of up to $1 million.
The case highlights the risks posed by China’s espionage operations directed at the United States, including the theft of trade secrets and intellectual property. In 2022, FBI Director Christopher Wray stated that the bureau was initiating a new China counterintelligence investigation approximately every 12 hours.
Chen and his co-defendant, Li Han, allegedly planned to acquire a DTX-150 Automatic Diamond Scriber Breaker machine, a wafer-cutting machine, from California-based firm Dynatex International and sell it to China-based Chengdu GaStone Technology. However, this would require an export license from the Commerce Department since GaStone was added to the Entity List in August 2014 due to activities contrary to the national security and foreign policy interests of the United States, according to BIS.
To circumvent U.S. regulations, Chen and Li purportedly attempted to purchase the machine in the name of a Chinese company, Jiangsu Hantang International Trade Group, which would act as an intermediary to conceal GaStone as the true end-user of Dynatex’s machine.
According to the plea agreement, Chen disclosed that he and Li arranged the sale on December 10, 2015. Federal prosecutors stated in April that they believed Li, a Chinese national, was in China.
Brent Burmester, a special agent in charge of the Commerce Department, emphasized the importance of halting the flow of U.S. semiconductor technology supporting China’s military modernization efforts. He stated that BIS would continue to prioritize investigations involving exports of advanced technologies to prohibited parties to safeguard U.S. national security.
Chengdu GaStone Technology was also implicated in another recent case involving the illegal export of monolithic microwave integrated circuits (MMICs) to China. Shih Yi-Chi, an electrical engineer from Los Angeles, was re-sentenced to 85 months in prison for this offense.
MMICs are utilized in various military applications such as missiles, missile guidance systems, fighter jets, electronic warfare, electronic warfare countermeasures, and radar applications.
In a separate incident earlier this year, a Chinese-born researcher was arrested for allegedly stealing trade secret technologies developed for the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles.
Can you please rewrite this?
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