Chinese Nationals Allegedly Tried To Smuggle American Tech To China

( – Two Chinese nationals have been indicted for trying to send a high-technology US manufacturing machine to a sanctioned company. The alleged offenses happened between 2015 and 2018. Prosecutors say the men deliberately lied in an attempt to evade sanctions.

On April 25 The Department of Justice unsealed an indictment against two Chinese nationals. Han Li and Lin Chen are accused of conspiring to export controlled US technology, a DTX-150 Automatic Diamond Scriber Breaker, to a Chinese company on the Commerce Department’s “Entity List.” This is a list of foreign companies and organizations that carry out activities harmful to the US or its interests.

Li and Chen allegedly tried to buy the DTX-150 from Dynatex, its California-based manufacturer, and have it shipped to Changdu GaStone Technology Company (CGTC). This company was put on the Entity List in 2014 because it was suspected of industrial espionage to steal technology with military uses. In 2021, its president was jailed for 63 months for using a US-based front company to buy advanced microchips and smuggle them to China.

The DTX-150 is a high-precision machine used to cut individual chips from wafers of pure silicon. It can help manufacture chips with a range of military uses, and it’s controlled technology. Companies on the Entity List can’t buy one without authorization from the Commerce Department, which, with its record, CGTC isn’t going to get. To avoid that, Li and Lin tried to buy the machine on behalf of another company, Jiangsu Hantang International (JHI). However, according to the Justice Department, JHI is a front for CGTC. The suspects asked Dynatex to make sure the documentation for the sale didn’t list CGTC as the final destination of the machine.

The DoJ believes Li is currently in China, but Chen was arrested in Chicago on April 24. If convicted, they could face up to 55 years in prison and $2.5 million in fines.

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