Two Chinese face export, conspiracy charges

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Two Chinese nationals have been indicted by a federal grand jury in Alexandria for attempting to obtain radiation-hardened microchips, which are prohibited defense items used in the military and aerospace industry.

U.S. Attorney Neil H. MacBride in Virginia said Hong Wei Xian, 32, and Li Li, 33, both from the Peoples Republic of China, were named in a two-count indictment unsealed Monday accusing them of conspiring to violate the Arms Export Control Act to smuggle goods from the United States and the attempted export of United States Munitions List items in violation of the Arms Export Control Act.

If convicted, they face a maximum penalty of five years in prison for the conspiracy charge and 20 years in prison on the export violation charge.

The indictment described Mr. Xian as president of Beijing Starcreates Space Science and Technology Development Company Limited and Mr. Li as the companys vice president.

Among other things, Beijing Starcreates engages in the business of importing and selling programmable read-only memory microchips to China Aerospace Science and Technology Corporation, which is controlled by the Chinese government and plays a substantial role in the research, design, development and production of strategic and tactical missile systems and launch vehicles for China.

Mr. MacBride said that since 1990, the U.S. government has maintained an arms embargo against China that prohibits the export, re-export, or re-transfer of any defense article to China. Prohibited defense articles are placed on the United States Munitions List, which includes spacecraft systems and associated equipment.

He said a programmable read-only memory microchip (PROM) serves to store the initial start-up program for a computer system and is built to withstand the conditions present in outer space.

According to the indictment, neither Mr. Xian nor Mr. Li applied for nor received a license from the United States to export defense articles of any description; however, from April 2009 to Sept. 1, 2010, the two are charged with contacting a company in Virginia and seeking to export thousands of radiation-hardened PROMs from that company.

The indictment said Mr. Xian and Mr. Li knew a license was required but did not seek to obtain one because it would require them to identify the end user and describe the end use. They are accused of conspiring to break orders into multiple shipments and designate countries outside China for delivery.

The two men were arrested in September in Hungary on a provisional arrest warrant sought by the U.S. government and were transferred into the custody of U.S. Marshals on Friday after they waived extradition. They arrived in the Eastern District of Virginia later that day.

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