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Counter Proliferation Investigation Unit
11/17/2011

Bay area exporter pleads guilty to selling sensitive technology to China

SAN JOSE, Calif. — A onetime Cupertino, Calif., exporter pleaded guilty in federal court Thursday to selling sensitive microwave amplifiers to the People's Republic of China without a license.

Fu-Tain Lu, 64, admitted being the owner of Fushine Technology, Inc. (Fushine), a California corporation formerly located in Cupertino. Fushine exported electronic components primarily used in communications, radar and other applications. The defendant and his company were targeted as part of an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation (FBI) and the Department of Commerce Office of Export Enforcement.

At the time of the offense, Fushine had a sales agreement with Miteq Components, Inc. (Miteq), a New York-based manufacturer of microwave and satellite communications components and subsystems. In March 1, 2004, Fushine submitted a purchase order to Miteq for a microwave amplifier and requested that Miteq notify Fushine immediately if an export license was required. Miteq responded that the part was controlled for export to China. Nonetheless, on April 2, 2004, Fushine exported the amplifier to co-defendant Everjet Science and Technology Corporation (Everjet), located in the People's Republic of China, without obtaining a license or license exception from the U.S. Department of Commerce. Lu acknowledged that the amplifier he shipped was restricted for export to China for reasons of national security.

Lu, along with the two corporate defendants, Fushine and Everjet, were initially indicted in April 2009. A superseding indictment was returned in February 2010. In addition to the count of conviction, the indictment also charged Lu with conspiring to violate U.S. export regulations and lying to federal agents who were investigating that conduct. The indictment alleged the defendants knew about the licensing restrictions and specifically sought to circumvent them.

The superseding indictment quoted an internal company email in which an Everjet employee told a Fushine employee, "Since these products are a little bit sensitive, in case the maker ask [sic] you where the location of the end user is, please do not mention it is in China."

The indictment also quoted another email in which Lu advised a subordinate to pretend that the intended end-user for an item was in Singapore rather than China.

In his plea agreement, Lu also agreed to forfeit 36 additional microwave amplifiers that were seized on March 24, 2010, but not included in the superseding indictment.

"Export regulations are vital to protecting the competitiveness and national security of the United States," said U.S. Attorney Melinda Haag. "My office will continue to work vigorously with our law enforcement partners to prosecute willful violations of those regulations."

In addition to ICE HSI, the FBI and the Department of Commerce, U.S. Customs and Border Protection also provided substantial assistance with the investigation. Assistant U.S. Attorney David R. Callawa is prosecuting the case aided by Tracey Andersen and Rawaty Yim.

Lu's sentencing is set for Feb. 21, 2012, before U.S. District Court Judge Ronald M. Whyte, sitting in San Jose. Lu faces a maximum sentence of 10 years in prison and a $50,000 fine.