California-Based Company, Company President Plead Guilty in Scheme to Violate the Export Control Reform Act (ECRA) (DOJ action)
Those involved. Tao Jiang, president and owner of Broad Tech System, Inc., an electronics distribution company.
Charges with penalties. Conspiracy; Violating the Export Control Reform Act; Money Laundering Conspiracy (maximum of 45 years in prison; a fine of $1,750,000; and a term of supervised release of nine years). What happened? Jiang, aka Jason Jiang, pleaded guilty on January 11 to conspiring with an engineer at Broad Tech System to illegally export Photoresist, a chemical integral to the semiconductor manufacturing process, to China Electronics Technology Group Corporation 55th Research Institute (CETC 55). This entity, which apparently has ties to the Chinese military, was added to the Entity List in 2020. Jiang and a co-conspirator attempted to use a third company’s name to conceal the identity of the actual recipient of the exported chemical. This included providing falsified information to the shipping company in an attempt to circumvent U.S. export control laws.
The press release can be found here.
Notably. This is a great example of effective “call out” compliance culture. The Rhode Island manufacturer contacted Department of Commerce agents after becoming suspicious as the order was particularly large, Broad Tech System was a new client, and the request came shortly after the initial request was canceled. This type of culture is valuable to reduce penalty liability for a broad swath of export enforcement laws. “See something, say something” should be a motto among corporate compliance officials.
North Korea
North Korean National Sentenced for Money Laundering Offenses (DOJ Action)
Those involved. Mun Chol Myong, a North Korean National.
Charges with penalties. Money Laundering Conspiracy; Money Laundering (45 months in prison).
What happened? From April 2013 to November 2018, Mun transmitted funds through U.S. bank accounts to sanctioned North Korean entities by falsifying transaction records and using a network of shell companies. Mun – working with the Reconnaissance General Bureau, North Korea’s foremost intelligence organization – illegally transferred over $1.2 million in transactions to raise capital and buy consumer goods and other commodities for North Korea.
The press release can be found here.
Notably. Mun’s case represents the first time a North Korean national has been extradited to the U.S. Soon after being charged, Mun was reportedly arrested in Malaysia and, after a two-year extradition fight, Mun was extradited to the United States. North Korea apparently responded to Malaysia’s agreement to extradite Mun by breaking off diplomatic ties with the Southeast Asian country. The case shows the extensive reach of DOJ enforcement authorities. The DOJ has capable f investigators and resources abroad to effectuate extraditions even when the consequences for the extraditing country are high.
4 International Trade Enforcement Roundup |
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