Rampant Chinese Theft of White Technology Prompts US DOJ to Creates Special Unit to Oppose Threat
CHINESE THEFT of White industrial enterprise from America is so rampant that the US Department of Justice has set up a special division just to try and deal with it — with the latest example being a Chinese professor of electrical engineering at UCLA being convicted of conspiring to illegally export semiconductor chips with missile guidance applications to China.
According to a statement released by the US Department of Justice (DOJ), Yi-Chi Shih, 64, described as a “part-time Los Angeles resident,” was found guilty on June 26 of conspiracy to violate the International Emergency Economic Powers Act (IEEPA), a federal law that makes illegal, among other things, certain unauthorized exports.
The jury also found Shih guilty of mail fraud, wire fraud, subscribing to a false tax return, making false statements to a government agency, and conspiracy to gain unauthorized access to a protected computer to obtain information. Shih was convicted of all 18 counts in a federal grand jury indictment.
A sentencing hearing is scheduled for later where Shih will face a statutory maximum sentence of 219 years in federal prison.
“This defendant schemed to export to China semiconductors with military and civilian uses, then he lied about it to federal authorities and failed to report income generated by the scheme on his tax returns,” said United States Attorney Nick Hanna.
The DOJ’s “China Initiative” was launched in November 2018 in response to massive industrial theft of White American technology and intellectual property by Chinese nationals.
The official DOJ statement which launched the “China Initiative” quoted a report from U.S. Trade Representative Robert Lighthizer which “found that Chinese sponsorship of hacking into American businesses and commercial networks has been taking place for more than a decade and is a serious problem that burdens American commerce.”
“We are here today to say: enough is enough. We’re not going to take it anymore. It is unacceptable. It is time for China to join the community of lawful nations. International trade has been good for China, but the cheating must stop.
“And we must have more law enforcement cooperation; China cannot be a safe haven for criminals who run to China when they are in trouble, never to be extradited. China must accept the repatriation of Chinese citizens who break U.S. immigration law and are awaiting return,” the US Attorney General said at the time.
“China — like any advanced nation — must decide whether it wants to be a trusted partner on the world stage — or whether it wants to be known around the world as a dishonest regime running a corrupt economy founded on fraud, theft, and strong-arm tactics.”
“Today, we see Chinese espionage not just taking place against traditional targets like our defense and intelligence agencies, but against targets like research labs and universities, and we see Chinese propaganda disseminated on our campuses.
According to the evidence presented at the Shih trial, he and co-defendant Kiet Ahn Mai, 65, of Pasadena, conspired to illegally provide Shih with unauthorized access to a protected computer of a United States company that manufactured wide-band, high-power semiconductor chips known as monolithic microwave integrated circuits (MMICs).
Shih defrauded the U.S. company out of its proprietary, export-controlled items, including its design services for MMICs, according to trial evidence. As part of the scheme, Shih accessed the victim company’s computer systems via its web portal after Mai obtained that access by posing as a domestic customer seeking to obtain custom-designed MMICs that would be used solely in the United States.
Shih used Mai to conceal his true intent to export the U.S. company’s MMICs to the People’s Republic of China. The MMICs that Shih sent to China required a license for national security reasons from the Commerce Department before being exported to China, and a license was never sought or obtained for this export.
The victim company’s semiconductor chips have a number of commercial and military applications, and its customers include the Air Force, Navy, and the Defense Advanced Research Projects Agency. MMICs are used in missiles, missile guidance systems, fighter jets, electronic warfare, electronic warfare countermeasures and radar applications.
Shih was the President of Chengdu GaStone Technology Company (CGTC), a Chinese company that was building a MMIC manufacturing facility in Chengdu. In 2014, CGTC was placed on the Commerce Department’s Entity List, according to court documents, “due to its involvement in activities contrary to the national security and foreign policy interest of the United States – specifically, that it had been involved in the illicit procurement of commodities and items for unauthorized military end use in China.”
Shih used a Hollywood Hills-based company he controlled — Pullman Lane Productions, LLC — to funnel funds provided by Chinese entities to finance the manufacturing of the MMICs by the victim company. Pullman Lane received financing from a Beijing-based company that was placed on the Entity List the same day as CGTC “on the basis of its involvement in activities contrary to the national security and foreign policy interests of the United States,” according to court documents.
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Source: New Observer