Knight Investments LLC Briefed By US Department of Justice on Illegal Company Exporters

Printer-friendly versionPDF version

The US Department of Justice briefed KI Officials on a Massachusetts resident that was sentenced to 36 months for illegally exporting electronics used in military applications.

Compliance Officials received word that the manager of a Massachusetts electronics company was sentenced in January to 36 months imprisonment for conspiring over a period of 10 years to export military electronics components and sensitive electronics used in military systems to the People’s Republic of China (PRC).

Officials from Knight Investments LLC stated that there had been a past submission of a past company that was tied to these activities, with the organization, and had denied compliance to the former compliance seeking client.

"We are here to promote legislation and ensure those that seek the proper approvals are in line with it. It does come every so often that we find companies that do not represent properly." said a senior official of KI.

The Waltham, Mass., company the individual managed CHITRON ELECTRONICS, INC. (CHITRON-US) was fined $15.5 million stemming from their convictions last year. Several Chinese military entities were among those to whom the defendants exported the equipment.

In May 2010, YUFENG WEI, 46, of Belmont, Mass., was convicted of illegally exporting U.S. Munitions List parts and export restricted sensitive technology to the PRC over a period of 10 years, illegally exporting electronics to the PRC (between 2004 and 2007), and conspiring to file, and filing, false shipping documents with the U.S. Department of Commerce (2005-2007).

Also in May 2010, CHITRON-US was convicted of unlawfully exporting military electronics and exporting restricted electronics to the PRC and illegally exporting such parts to the PRC on 26 occasions between 2004 and 2007. Earlier this week, ZHEN ZHOU WU, WEI’s ex-husband and the Chinese national who owned CHITRON-US, was sentenced to 97 months imprisonment for his role in the illegal export conspiracy.

"Events like these are extremely important for us compliance officials. It is an absolute necessity that we receive the proper training to recognize companies like these." said an underwriting official from KI.

On May 17, 2010, following a five-week trial, WEI and CHITRON-US, along with WU, were convicted of conspiring from 1997 to 2007 to unlawfully export to the PRC military electronics and export restricted electronics components and illegally exporting such parts to the PRC on numerous occasions between 2004 and 2007. The defendants’ illegal enterprise involved the use of CHITRON-US as a front company for its parent company, CHITRON ELECTRONICS COMPANY LIMITED, headquartered in Shenzhen, PRC. WEI used CHITRON-US to procure export restricted equipment from U.S. suppliers and then export the goods to China, through Hong Kong. The exported equipment is used in electronic warfare, military radar, fire control, military guidance and control equipment, missile systems, and satellite communications.

CHITRON sought to market electronics to Chinese military factories and military research institutes, including numerous institutes of the China Electronics Technology Group Corporation, which is responsible for the procurement, development, and manufacture of electronics for the Chinese military, including the People’s Liberation Army.

(SOURCE US DEPARTMENT OF JUSTICE)

The Department of Defense’s Defense Technology Security Administration has concluded in a report filed with the Court that the defendants’ activities seriously threatened “U.S. national and regional security interests.” According to the Department of Defense, the parts the defendants were convicted of illegally exporting are “vital for Chinese military electronic warfare, military radar, fire control, military guidance and control equipment, and satellite communications.” Further, the illegally exported parts are “precisely the [types of] items ... that the People’s Liberation Army actively seeks to acquire.”

Also charged in the indictment was CHITRON-US’s parent company, CHITRON-SHENZHEN, which received the U.S. electronics and delivered the parts to Chinese end-users. The Court has entered a contempt order against CHITRON-SHENZHEN for refusing to appear for trial.

(SOURCE U.S. Department of Justice - United States Attorney's Office)

# # #

Knight Investments LLC works as a private compliance firm to invest company assets on the behalf of promoting a vibrant community, low income housing, humanitarian causes, renewable energies, real estate developments, and project compliance solutions.