A recently unsealed criminal complaint filed in federal district court in Seattle provides a wealth of details on the criminal export prosecution of Lian Yang, a software engineer living in Woodinville, Washington. According to the allegations of the complaint, Yang, who was caught in an undercover sting, attempted to illegally export ITAR-controlled satellite components to the PRC without the required export license.
Yang initially approached a confidential source and told him that he had “old school friends” in China who were making money importing electronic parts and that there was a financial opportunity in selling those parts to them. Yang indicated that some of the parts that his friends wanted might be export-controlled, but that he didn’t want to do anything illegal. Yang then provided a list of the items he was seeking which included an ITAR-controlled satellite component. Two days later the confidential source was in contact with the FBI.
At the behest of the FBI, the confidential source put on a wire and continued to work with Yang on Yang’s plan to acquire and export the satellite parts. Of course, a criminal conviction would require proof that Yang knew that it was illegal to export the items in question. According to the complaint, Yang requested that the parts be shipped under false invoices that concealed the actual parts in the shipment. Additionally, the complaint alleges that Yang was contemplating further concealing the nature of the parts by effacing the part numbers printed on them.
The undercover agents then became involved in the investigation as the supposed supplier of the parts. Yang wired the negotiated price into an account set up by the agents, who arrested Yang at the meeting at which they were to deliver the parts.
Oddly, at one point, the undercover agents told Yang that there would be delay in the delivery of the parts. The delay, they said, “is with the government,” further stating that the “compliance paperwork” was “waiting to be reviewed and signed.” This will certainly complicate the government’s proof that Yang had criminal intent and knew that the export of the items was illegal. It’s not clear what innocent reason the government had for suggesting that the transaction was being reviewed by the U.S. government.
Copyright © 2010 Clif Burns. All Rights Reserved.
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Does anyone know the likelihood of this individual getting off the hook for the comments made by the FBI agents?
The role of the “Confidential Source” as described by the Criminal Complaint is somewhat troubling. The description in the complaint, which having been drafted by the investigators and prosecutors can be relied uoon to relate the facts in the light most favorable to the government, suggests there was at least some ambiguity in the defendant’s intent when the government team’s roleplaying began. The question then is whether this guy truly had a predisposition to export without a license or was led down that path by the agents and their proxy.
What is even more troubling is the government’s continued focus on exports of small quantities of hardware, and apparent lack of concern for the wholesale transfer of design and production technology represented by the movement of not just production capacity but also R&D facilities to China. The notion that each and every bit of licensable technology that was transferred in some of these massive undertakings was in fact licensed is inconsistent with the way that most large enterprises function. If large, well-known banks take shortcuts with well-understood documents such as real-estate mortgages, assignments, releases, and foreclosure papers, why should anyone think that large companies are any more compliant with something as arcane as export controls? But the export enforcement authorities prefer to plus up their body count by going after small companies and individuals exporting nicle and dime amounts of hardware, rather than use the political capital and litigation resources required to go after large companies that export more U.S. jobs via technology transfers than U.S.-made products.
This is really sad to see, a Microsoft software engineer alleged for illegal export offense. Such people must be strongly dealt with so other people take notice of that.
Now hold on just a minute son, are you trying to tell me that Microsoft has no compliance program that informs their employees of the ITAR embargo on China? If that is true and Yang didn’t learn of it elsewhere there is much more business out there for compliance people than can accurately be imagined. We are also in much more trouble than can be accurately imagined. I understand that everyone is entitled to a fair trial, but anyone legally inside America only has one thing to do when asked to participate in a potentially illegal arms export. This person apparently failed to do it.