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Press Release

Former U.S. Navy Sailor Sentenced to 2.5 Years for Selling Export-Controlled Military Equipment to China

For Immediate Release
U.S. Attorney's Office, Southern District of California

Assistant U. S. Attorney Alexandra F. Foster (619) 546-6735

NEWS RELEASE SUMMARY – December 21, 2021

SAN DIEGO – Ye Sang “Ivy” Wang, a former U.S. Navy sailor who was a Logistics Specialist First Class assigned to the Naval Special Warfare Command, was sentenced to 30 months in custody and ordered to pay a $20,000 fine for conspiring with her husband and co-defendant, Shaohua “Eric” Wang, to illegally export sensitive military equipment to China for profit.

Eric Wang pleaded guilty on September 26, 2019, admitting that he illegally sold export-controlled U.S. military equipment to China through his on-line business and that he enlisted his wife to use her Navy position to purchase the equipment for resale. Eric Wang also admitted that he maintained a warehouse in China to house the military equipment, travelled back and forth frequently, and had connections to buyers in China. On February 3, 2020, U.S. District Court Judge Cynthia Bashant sentenced Eric Wang to 46 months for his role in this scheme.

According to Ivy Wang’s plea agreement and the government’s sentencing memorandum, she purchased military equipment for Naval Special Warfare units as part of her duties as a logistics specialist from 2015 to 2019. In March 2018, she used her military email and mailing address to order a device for identifying United States military personnel in the field. This item was subject to U.S. Department of Commerce export controls, and not advertised for sale to civilians. She was deployed in Iraq at the time the device arrived on base in San Diego. She advised her command that the package containing this device was something she had obtained for her husband for a camping trip. In reality, she bought the device on behalf of her husband for him to resell it to China for profit.

Months later, in October 2018, upon returning from deployment to Iraq, Ivy Wang told the interviewing agents that she knew her husband was shipping military equipment to China illegally. Despite being interviewed by law enforcement agents, Ivy Wang took the device from her Navy command, brought it home and gave it to her husband. The device had been secretly disabled by law enforcement. Upon receipt, Eric Wang messaged a customer that he was in receipt of the item, but advised he could not ship the item to China, because “they are still investigating me... My friend is a SEAL who also got involved. They are investigating him as well.”

Ivy Wang told NCIS and HSI agents during her October 2018 interview that her husband sent her an Excel spreadsheet of military equipment items for her to purchase and that she knew those items were going to buyers in China. Eric Wang told her that he could not buy export-controlled military equipment using his personal email address, so he asked her to do it for him, using her position in the U.S. Navy and her military email address. She grew so annoyed at his repeated requests that, after purchasing equipment for him through March 2018, she gave him her password to her military email address and told him to buy the export-controlled military equipment posing as her after she deployed.

“This defendant used her position of trust to put the Navy and the nation at risk, and the sentence imposed today holds her accountable for her actions,” said Acting U.S. Attorney Randy Grossman, who praised the prosecution team, NCIS, HSI and Department of Commerce for their excellent work on this case.

“Ms. Wang betrayed her oath to the U.S. Navy and ultimately threatened the operational readiness and safety of our nation's military by attempting to acquire and illegally export sensitive military equipment to China,” said Special Agent in Charge Joshua Flowers of the NCIS Southwest Field Office. “NCIS and our partners remain committed to protecting our nation’s critical technologies and infrastructure.”

“This individual abused her position of trust to obtain military-grade equipment, which foreign adversaries could have used against American service members and allies,” said Chad Plantz, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) San Diego. “Fortunately, HSI and our partners were able to prevent this equipment from falling into the wrong hands, but this case serves as a stark reminder of why it’s important for organizations – particularly those involved in national defense – to educate their workforces on how to properly identify and report insider threats.”

DEFENDANTS                                            Case Number 19CR1895-BAS                                    

Shaohua “Eric” WANG          Age: 38           San Diego, CA           

Ye Sang “Ivy” WANG           Age: 37           San Diego, CA

SUMMARY OF CHARGE

Conspiracy to Export Defense Articles Without a License (Title 18, U.S.C., Sec. 371)

Maximum Penalty: Five years in prison, $250,000 fine.

INVESTIGATING AGENCY

Naval Criminal Investigative Service (NCIS);

Homeland Security Investigations (HSI); and

Office of Export Enforcement, Los Angeles Field Office, Department of Commerce

Updated December 21, 2021

Topics
Financial Fraud
Foreign Corruption
Release Number: CAS21-1221-Wang