Tech Exec Charged With Illegal Export To China - InformationWeek

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1/16/2009
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Tech Exec Charged With Illegal Export To China

The suspect allegedly shipped at least 200 integrated circuits, which also could be used for military applications, the Justice Department said.

William Chai-Wai Tsu, 61, a resident of Beijing and a naturalized U.S. citizen, was arrested by federal agents on Saturday on suspicion of violating tech export laws.

According to the Office of the U.S. Attorney in Los Angeles, Tsu is accused of exporting integrated circuits to China in contravention of the International Emergency Economic Powers Act. The IEEPA allows the government to restrict the export of sensitive technology to designated countries.

Tsu, the Department of Justice alleges, shipped at least 200 integrated circuits to China in violation of the IEEPA. The circuits in question, according to the government, qualify as "dual-use" items, meaning that they could be used for military applications. In order for the export of the circuits to be lawful, the U.S. Department of Commerce would have had to approve the transaction.

"This investigation shows the need to continue the halt of illegal procurement of items that have the potential to damage our national security," said Anthony Levey, special agent in charge of the department's Los Angeles field office, in a statement.

According to the government, Tsu was arrested at a home in Hacienda Heights, Calif., southeast of Los Angeles. He had allegedly been receiving packages and correspondence for a company called Cheerway Inc., at which he holds the title of VP.

Tsu, the government alleges, purchased the circuits in question from a San Jose, Calif., electronics distributor after disavowing any plan to export the chips, which could be used in advanced communications systems or in military radar.

A spokesperson for the U.S. attorney in Los Angeles did not immediately respond to requests for further details.

In its 2008 Annual Report, the U.S.-China Economic and Security Review Commission warned that China is targeting U.S. government and commercial computers for espionage. The commission said much the same thing in its 2007 Annual Report.

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