Businessman Pleads Guilty To Selling Sensitive Technology To China
By Jim Kouri
California businessman Fu-Tain Lu pleaded guilty in federal court in San Jose on Friday to selling sensitive microwave amplifiers to the People’s Republic of China without the required license or U.S. government authorization, according to a report obtained by the Espionage Committee of the National Association of Chiefs of Police.
In pleading guilty, the 64-year old Lu admitted that he was the owner and founder of Fushine Technology, Inc. (Fushine), a California corporation formerly located in Cupertino. Fushine was an exporter of electronic components primarily used in communications, radar and other applications.
At the time of the unlawful sales, Fushine had a sales representative agreement with Miteq Components, Inc. (Miteq), a New York-based manufacturer of microwave and satellite communications components and subsystems.
Lu admitted that on March 1, 2004 Fushine submitted a purchase order to Miteq for one microwave amplifier and requested that Miteq notify Fushine immediately if an export license was required. Miteq responded that the part was controlled for export to China. Nonetheless, on April 2, 2004, Fushine exported the amplifier to co-defendant Everjet Science and Technology Corporation (Everjet), located in the People’s Republic of China, without having obtained a license or license exception from the United States Department of Commerce. Lu further admitted that the amplifier he shipped was restricted for export to China for reasons of U.S. national security.
Lu, along with the two corporate defendants, Fushine and Everjet, were first indicted on April 1, 2009. A superseding indictment was returned on February 17, 2010. In addition to the count of conviction, the indictment also charged him with conspiring to violate United States export regulations, and lying to federal agents who were investigating that conduct. The indictment alleged that the defendants knew about the licensing restrictions and specifically sought to circumvent them.
The superseding indictment quoted from an internal company e-mail in which an Everjet employee told a Fushine employee, “Since these products are a little bit sensitive, in case the maker ask [sic] you where the location of the end user is, please do not mention it is in China.” The indictment also quoted from another e-mail in which Lu advised a subordinate to pretend that the intended end-user for an item was in Singapore rather than China.
In the plea agreement, Lu also agreed to forfeit 36 additional microwave amplifiers that were seized on March 24, 2010, but that were not included in the superseding indictment.
The sentencing of Lu is scheduled for February 21, 2012, before U.S. District Court Judge Ronald M. Whyte, sitting in San Jose. The maximum statutory penalties for the count of conviction—violation of export regulations (50 U.S.C. § 1705(b) and 15 C.F.R. 764.2(a))—are 10 years in prison and a $50,000 fine.