News and Press Releases

United States Attorney Jenny A. Durkan
Western District of Washington

Woodinville Man Sentenced To Four Months In Prison, Six Months Of Home Detention For Wire Fraud

Company Pays $300,000 Fine for Violating Export Control Act

FOR IMMEDIATE RELEASE
October 28, 2013

            A Woodinville, Washington based company and its owner were sentenced today in U.S. District Court in Seattle for violating the Arms Export Control Act and for wire fraud, announced U.S. Attorney Jenny A. Durkan.  The company, PRECISION IMAGE CORPORATION, is operated by owner, CHIH-KWANG HWA, out of his Woodinville home.  HWA obtained contracts to supply circuit boards to the U.S. Navy, by falsely claiming the boards would be manufactured in the United States.  Instead HWA illegally sent restricted information to a company in Taiwan for the boards to be manufactured there.  The company was fined $300,000 for violating the Arms Export Control Act.  HWA was sentenced for wire fraud to four months in prison, and six months of home detention as part of his two years of supervised release.  U. S. District Judge James. L. Robart imposed the sentences.

According to the charging information and the plea agreements in the case, between 2009 and 2011, HWA obtained contracts worth $180,034 to supply circuit boards to the U.S. Navy.  The Navy supplied technical data to PRECISION IMAGE that contained the technical specifications for the circuit boards.  This technical data was designated on the United States Munitions List, International Traffic in Arms Regulations.  As a result, this technical data could not legally be transmitted outside the United States without a license from the U.S. State Department.  CHIH-KWANG HWA knew about this restriction at the time he received the technical data from the Navy.  HWA did not get the appropriate licenses, and sent the restricted data to the Taiwan manufacturer.  One of the transmissions occurred in September 2011, and the Taiwanese manufactured circuit boards were later provided to the Navy.  In addition, many of the contracts awarded to HWA were set aside for companies that promised to manufacture the boards in the United States.  HWA falsely represented to the Navy in connection with these contracts that the boards were being manufactured in the United States, when instead they were being manufactured in Taiwan.

The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Naval Criminal Investigative Service.  The case was prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods.

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