Chinese National Pleads Guilty to Illegal Exports to Northwestern Polytechnical University
Defendant conspired with Chinese military university on the Department of Commerce’s Entity List
BOSTON – A Chinese national pleaded guilty today in federal court in Boston in connection with illegally procuring and causing the illegal export of $100,000 worth of U.S. origin goods to Northwestern Polytechnical University (NWPU), a Chinese military university that is heavily involved in military research and works closely with the People’s Liberation Army (PLA) on the advancement of its military capabilities.
Shuren Qin, 44, a Chinese national residing in Wellesley, who gained admittance into the United States through the EB-5 Immigrant Investor Visa Program in 2014, pleaded guilty to one count of conspiracy to unlawfully export items from the United States to NWPU without first obtaining the required export licenses; one count of visa fraud; two counts of making false statements to law enforcement agents regarding his customers and the types of parts he caused to be exported from the United States to the People’s Republic of China (PRC); four counts of money laundering; and two counts of smuggling hydrophones from the U.S. to the PRC. U.S. District Court Judge Denise Casper scheduled sentencing for Sept. 8, 2021.
“The People’s Republic of China has an insatiable appetite for our country’s most sensitive products and technologies – particularly those with military applications,” said Acting United States Attorney Nathaniel R. Mendell. “By exporting key anti-submarine warfare products to a Chinese military university, Mr. Qin created a threat to our national security and broke the law. That warrants federal prosecution, without a doubt.”
“Qin took advantage of the open marketplace in the United States to purchase sensitive technologies for a Chinese military university. In addition, he lied on his visa application and to U.S. customs officers,” said Assistant Attorney General for National Security John Demers. “When individuals illegally pursue personal profit at the expense of U.S. national security, DOJ will disrupt such conduct and punish those involved.”
Qin established LinkOcean Technologies, LTD., which he used to import goods and technology with underwater and marine applications into the PRC from the United States, Canada and Europe. NWPU has been involved in the development of unmanned aerial vehicles, autonomous underwater vehicles and missile proliferation projects. Since 2001, the U.S. Department of Commerce (DOC) has designated NWPU on its Entity List for national security reasons. Qin communicated with and received taskings from NWPU to obtain items used for anti-submarine warfare. Between approximately July 2015 and December 2016, Qin caused at least 60 hydrophones (devices used to detect and monitor sound underwater) to be exported from the United States to NWPU without obtaining the required export licenses from the DOC. Qin and his company, LinkOcean, did so by concealing from the U.S. manufacturer of the hydrophones that NWPU was the true end-user and by causing false end-user information to be filed with the U.S. government. In addition, on four occasions in connection with the export of hydrophones to NWPU, Qin engaged in money laundering by transferring or causing the transfer of more than $100,000 from Chinese bank accounts to bank accounts located in the United States with the intent to promote and facilitate his unlawful export scheme.
Additionally, in July 2016, Qin engaged in visa fraud in connection with his application to remove conditions on his U.S. Permanent Resident Status (Form I-829) by falsely certifying that he had not committed any crime for which he was not arrested since becoming a conditional permanent resident when, in fact, he had caused the illegal export of hydrophones from the United States to NWPU in December 2015. In addition, Qin made false statements to federal agents on two occasions regarding LinkOcean’s customers and its export activities. Specifically, during a November 2017 interview with Customs and Border Protection (CBP) Officers, Qin falsely stated that he only exported instruments that attach to a buoy. However, Qin had exported and caused the export of remotely-operated side scan sonar systems, unmanned underwater vehicles, unmanned surface vehicles, robotic boats and hydrophones. The items that Qin concealed from CBP during this interview have military applications and several of these items were delivered to military end-users in China. For instance, Qin exported a U.S.-manufactured remotely-operated side scan sonar system to a PLA Troop in November 2015. On or about July 21, 2018, Qin lied to investigators during an interview when he stated that he did not have any customers on the DOC’s Entity List. In fact, Qin had at least two such customers – NWPU and the National University of Defense Technology (NUDT). NUDT is involved in national defense research for the PLA and responsible for modernizing the PRC’s armed forces. Since 2015, it has been designated on DOC’s Entity List.
Prior to entering his guilty plea in this case, Qin moved to suppress evidence seized from his laptop and iPhone during a border search and statements he made to CBP officers during a secondary inspection upon his return to the United States from the PRC at Logan Airport in November 2017. On Nov. 30, 2020, after eight days of evidentiary hearings, Judge Casper issued a decision denying Qin’s motion, finding that “at a minimum, the agents had reasonable suspicion for the search and seizure on November 24, 2017 and, any statements made by Qin were non-custodial statements not in contravention of the Fifth Amendment.” In so doing, Judge Casper found that the “Chinese Navy” was one of Qin’s customers according to LinkOcean’s website and when the border search occurred, agents had testified that they were “concerned that Qin was involved [in] working on behalf of the Chinese Navy to procure items from the United States, export them to China so that they could be used or incorporated in systems the Chinese Navy or research institutes were developing to be used in electronic warfare, anti-submarine warfare.” Judge Casper further found that by the end of the summer of 2017, investigators had learned that Qin was interested in procuring both AUVs and sonobuoys, which raised concerns for the agents as they learned that Ultra Electronics was at that same time developing “an AUV that worked in conjunction with [a] sonobuoy … strictly for military use by the U.S. Navy.” Qin also lied when questioned during the secondary inspection at the border regarding the types of parts he exported, concealing his “interest in procuring side scan sonar systems, AUVs, and sonobuoys.”
The charge of conspiring to violate U.S. export laws provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $1 million. The charges of visa fraud and smuggling both provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. The charge of making false statements provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge or money laundering provides for a sentence of up to 20 years in prison, five years of supervised release and a fine of $500,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting U.S. Attorney Mendell; NSD AAG Demers; William S. Walker, Acting Special Agent in Charge of the Homeland Security Investigation, Boston Field Office; Patrick Hegarty, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; William Higgins, Special Agent in Charge of the Department of Commerce, Office of Export Enforcement, Boston Field Office; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Michael West, Special Agent in Charge of the Naval Criminal Investigative Service, Northeast Field Office made the announcement today. Assistant U.S. Attorney B. Stephanie Siegmann, Chief of Mendell’s National Security Unit, and Assistant U.S. Attorney Jason Casey, also of National Security Unit, are prosecuting the case.