On 20 December 2016, in the Federal District of Connecticut, JIANG YAN, 34, of Shenzhen China was sentenced to time served (12 months imprisonment) for attempting to purchase and export to China without a required export authorization for certain sophisticated integrated circuits used in military satellites and missiles. Additionally, for conspiring to sell counterfeits of those same integrated circuits to a purchaser in the United States. Yan was also ordered to forfeit $63,000 in cash seized incident to his arrest.
Jiang Yan and two conspirators Xianfeng Zuo, and Daofu Zhang operated businesses in China that bought and sold electronic components, including integrated circuits (“ICs”). In 2015, Zuo asked Yan to locate and purchase several advanced ICs made by Xilinx Corp., which because of their radiation tolerance for uses in space, have military applications in missiles and surveillance satellites.
Yan approached a US individual to obtain the ICs for export to China. The individual balked at the transaction explaining that the ICs were export controlled and could not be shipped outside the U.S. without an export license. Yan was not deterred and stated that he wanted to purchase the ICs regardless of the export authorization requirement. The individual again balked and stated that the ICs would have to be stolen from military inventory.
Yan and others, however, had a plan and advised the US individual that they would supply fake ICs identical to the ones that would need to be stolen.
In November 2015, Zhang shipped from China two packages containing a total of eight counterfeit ICs, each bearing a counterfeit Xilinx brand label. It was agreed that a meeting would take place during which Jiang Yan, Xianfeng Zuo, and Daofu Zhang and the US individual to exchange ICs and make payment. The three flew to the US from China and met. There were some “uninvited” guests also in attendance as Federal Agents immediately arrested the three Chinese Nationals.
Yan will be deported back to China.
As for Zhang and Zuo, they also pleaded guilty. On July 8, 2016, Zhang pleaded guilty to one count of conspiracy to traffic in counterfeit goods, he was sentenced to 15 months imprisonment and ordered to forfeit $63,000. On March 16, 2016, Xianfeng Zuo pleaded guilty to one count of conspiracy to traffic in counterfeit goods and was ordered to forfeit $63,000.
Jim McShane is a Sr. Consultant, Trade Compliance for Export Solutions -- a full-service consulting firm specializing in ITAR and EAR regulations.