On January 10, FBI agents arrested William Chi-Wai Tsu, a U.S. citizen and resident of California. Tsu, who was born in Shanghai, was detained on charges that he had illegally exported electronic components to China without first obtaining required licenses from the Bureau of Industry and Security (”BIS”). An extraordinarily detailed affidavit by BIS Special Agent Willie Lo filed with the U.S. District Court provides an interesting narrative of how Mr. Tsu’s allegedly illegal exports were uncovered.

According to the affidavit, Mr. Tsu made numerous purchases of electronic components from RFMW, Ltd., a San Jose distributor. These components included a Trinquint TGA4036 amplifier circuit controlled under ECCN 3A001.b.2.d.

Employees of RFMW had advised Tsu that the components he was purchasing required export licenses. They received assurances from Tsu that he was not exporting the items but was instead using them in a manufacturing operation he owned in New Hampshire. When Tsu returned integrated circuits in October 2008 for “quality control” issues, RFMW became suspicious that the items had been exported.

First, the circuits seem to have been “primitively” handled, something which would not have happened in an assembly house in the United States. Such facilities typically have clean rooms for the handling of circuits. Second, the delay in returning the items also suggested that they left the United States.

When RFMW requested permission to visit Tsu’s facility in New Hampshire where he was using the circuits, Tsu declined saying that the facility was being “remodeled” and was not accepting visitors. The rest, as they say, is history.

If these allegations are true, this case is the only one I know where, seemingly, the defendant smuggles goods from the United States and then tries to return them for a refund. That doesn’t seem that much different from a thief returning the stolen loot to the victim and demanding better stuff.