Chinese National Receives 30 Month Sentence For Smuggling High Tech U.S. Military Hardware To China
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Kan Chen, of Ningbo, China, in Zhejiang Province, age 26, was sentenced in U.S. District Court to 30 months in prison and three years’ supervised release, after pleading guilty to a three-count Felony Information that charged him with conspiring to violate the Arms Export Control Act and International Traffic in Arms Regulations; attempting to violate the Arms Export Control Act and International Traffic in Arms Regulations and violating the International Emergency Economic Powers Act.
Chen has been incarcerated since June 16, 2015, when he was arrested by Homeland Security Investigation agents on the Northern Mariana Island of Saipan following an eight-month long investigation into his illegal conduct. On March 2, 2016, Chen pled guilty to the offenses listed above.
According to court documents, from July 2013 through his arrest in June 2015, Chen caused or attempted to cause the illegal export of over 180 export-controlled items, valued at over $275,000, from the United States to China. Over 40 of those items – purchased at a cost of over $190,000 – were sophisticated night vision and thermal imaging scopes, designated by the International Traffic in Arms Regulations as United States Munitions List defense articles, which can be mounted on automatic and semi-automatic rifles and used for military purposes at night.
Given the sensitivity surrounding these military-grade items, Chen devised a scheme to smuggle these items through Delaware and outside the United States. He purchased the devices via the internet and telephone and had them mailed to several reshipping services in New Castle, Delaware. These Delaware-based service companies provide an American shipping address for customers located in China, accept packages for their customers, and then re-ship them to China. In order to further conceal his illegal activity, Chen arranged for the re-shippers to send the devices to several intermediary individuals, who in turn forwarded the devices to Chen in China. Chen then sent the devices to his customers. During the course of this conduct, Chen made numerous false statements in order to knowingly and willfully evade the export control laws of the United States. These false statements included undervaluing the shipments, unlawfully avoiding the filing of export information with the U.S. government, indicating that he was a natural-born U.S. citizen, and providing the address of the reshipping service as his own.
During the sentencing hearing, the Government noted the lethality of these items when combined with weapons designed for use on a battlefield. For example, the ATN ThOR 640-5x, 640x480-Inch Thermal Weapon Scope, 100 mm, which Chen purchased for $8,428.39, is described by the manufacturer as “an ideal product for force protection, border patrol officers, police SWAT and special operations forces providing them the tools they need to be successful in all field operations both day and night. Uncooled thermal imaging cuts through dust, smoke, fog, haze, and other battlefield obscurants.” These rifle scopes, therefore, are weapons of war, and Chen’s smuggling – and subsequent sale – of these military-grade items outside the United States directly undermines our nation’s national security interests.
As the Government further noted, Chen’s conduct was particularly harmful, because he sold this military technology indiscriminately. Thus, it could have ended up in any number of nefarious hands – including agents of foreign governments, bad actors, and brokers. Once these rifle scopes were exported to China and distributed by Chen to his customers, the military technology contained inside these items could have been reversed engineered or used anywhere in the world for a variety of purposes by oppressive regimes, terrorists, or others to threaten the United States or its allies’ military advantage or to commit human rights abuses.
Prior to issuing her sentence, U.S. District Court Judge Sue L. Robinson remarked that Chen’s case “was a sobering reflection of the world we live in” and that “the consequences [of Chan’s actions] were truly perilous.”
U.S. Attorney Oberly thanked special agents from both the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Department of Commerce’s Office of Export Enforcement divisions for their hard work, and stated, “The United States will simply never know the true harm of Chen’s conduct because the end users of the rifle scopes and other technology are unknown. No matter their nationality, those individuals who seek to profit by illegally exporting sensitive U.S. military technology will be prosecuted. It is important that we take all necessary steps to prevent our military technology and equipment from being exported and possibly used against our service members and our allies overseas.”
Gregory C. Nevano, Acting Special Agent in Charge of HSI Philadelphia, stated, “These sophisticated technologies are highly sought after by our adversaries. They were developed to give the United States and its allies a distinct military advantage, which is why HSI will continue to aggressively target the individuals who might illegally procure and sell these items.”
“Today's sentencing is the result of exceptional investigative work by the Office of Export Enforcement and our law enforcement partners to disrupt an illicit network and prevent sensitive technology from falling into the wrong hands,” said Nasir Khan, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement’s, Washington Field Office.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. It is being prosecuted by Assistant United States Attorneys Jamie M. McCall and Elizabeth L. Van Pelt, and the Counterintelligence and the National Security Division’s Counterintelligence and Export Control Section.