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Counter Proliferation Investigation Unit
10/31/2012

Exporter sentenced to prison for selling sensitive technology to China

Defendant sold restricted microwave amplifiers to People's Republic of China without a license

SAN JOSE, Calif. — A Bay Area man was sentenced Monday to 15 months in federal prison for selling sensitive microwave amplifiers to the People's Republic of China following a multi-agency probe by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the U.S. Department of Commerce's Office of Export Enforcement, the FBI and U.S. Customs and Border Protection.

Fu-Tain Lu, 65, admitted in his guilty plea last year that he was the owner and founder of Fushine Technology, Inc. (Fushine), a California corporation formerly located in Cupertino that exported electronic components primarily used in communications, radar and other applications. At the time of the offense, Fushine had a sales representative agreement with Miteq Components Inc. (Miteq), a New York-based manufacturer of microwave and satellite communications components and subsystems.

Lu admitted that, on March 1, 2004, Fushine submitted a purchase order to Miteq for one 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 also admitted knowing that the amplifier he shipped was restricted for export to China for reasons of national security.

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

"The export of these defense articles to the People's Republic of China or anywhere else in the world is tightly regulated for good reason," said Clark Settles, special agent in charge of HSI San Francisco. "One of HSI's top enforcement priorities is preventing U.S. military products and sensitive technology from falling into the hands of those who might seek to harm America or its interests. Requiring exporters to obtain licenses before shipping controlled technology to restricted countries is a vital precaution in ensuring our nation's security."

Lu, along with the two corporate defendants, Fushine and Everjet, were first indicted April 1, 2009, and a superseding indictment was returned Feb. 17, 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 the allegation. The indictment alleged the defendants knew about the licensing restrictions and sought to circumvent them by lying about the recipient as well as the intended end-use for the item being shipped. The court specifically found that Lu had lied to investigators about other things, including his relationship with Everjet.

"Monday's sentencing demonstrates the ongoing cooperation with our federal law enforcement partners to aggressively pursue and prosecute those who violate our export control laws," said Julie Salcido, special agent in charge of the U.S. Department of Commerce Bureau of Industry and Security Office of Export Enforcement in San Jose. "We will continue to work tirelessly to hold accountable those who choose to jeopardize U.S. national security interests."

"The FBI works hand-in-hand with our law enforcement partners and the U.S. Attorney's Office to address commercial and economic crimes of opportunity," said Acting Special Agent in Charge Joel Moss of the FBI San Francisco Division. "This case is an example of our determination to combat the transfer of sensitive U.S. technology that has national security implications and our commitment to a fair and secure commercial arena."

In addition to the prison sentence, the court ordered Lu to serve three years of supervised release, pay a $5,000 fine, and forfeit 36 microwave amplifiers worth approximately $136,000.