California Export Broker Sentenced to Two Years for Illegally Exporting
National Security-Sensitive Technology to China
Defendant Brokered Illegal Sale of Night Vision Technology
SAN JOSE, Calif., Dec. 3 /PRNewswire-USNewswire/ -- U.S. Attorney Scott N.
Schools announced today that Philip Cheng was sentenced today to two years in
prison and ordered to pay a $50,000 fine for his role in brokering the illegal
export of a night vision camera and its accompanying technology to China in
violation of federal laws and regulations. This sentence is the result of a
joint investigation by the Department of Homeland Security's Immigration and
Customs Enforcement (ICE), the Federal Bureau of Investigation (FBI), the
Department of Commerce's Office of Export Enforcement, and the Internal
Revenue Service (IRS) Criminal Investigation Division.
Mr. Cheng pleaded guilty on Oct. 31, 2006, to brokering the illegal export of
Panther-series infrared camera, a device which makes use of "night vision"
technology. Mr. Cheng failed to obtain required authorization of the United
States Department of State prior to the export of the camera. The technology
used in the device was controlled for national security reasons by the United
States Department of State.
Mr. Cheng, 60, of Cupertino, was indicted by a federal grand jury on June 3,
2004. He was charged with conspiracy to violate the federal Arms Export
Control Act and the International Traffic in Arms regulations, brokering the
illegal export of defense articles and services, and three counts of money
laundering.
Mr. Cheng's guilty plea followed a trial in February and March 2006 which
ended in a hung jury. Following the mistrial, Mr. Cheng agreed to resolve the
case through his guilty plea to the willful illegal brokering of a night
vision camera to China.
An affidavit filed by an agent of the Department of Homeland Security,
Immigration and Customs Enforcement in connection with a criminal complaint
filed in the case provides a detailed factual background of the investigation
in the case, including: (1) information provided by a confidential informant
regarding Cheng's involvement in conspiring to illegally export thermal
imaging and infrared technology, and the manufacture, use, and testing of such
technology, to China; (2) a highlighting of specific documents seized from
Cheng's trash which reveal the involvement of a co-conspirator, Martin Shih
(now deceased), and his company in entering into agreements to export thermal
imaging and infrared technology to China; (3) contracts and memoranda seized
from Cheng's residence pursuant to a search warrant which reveal specific
written agreements between Shih's company Night Vision Technology, and Chinese
entities to purchase thermal imaging and infrared technology controlled under
federal law; and (4) Cheng's statements, in interviews conducted on June 17,
2003, that he had served as Night Vision Technology's agent with Chinese
entities, had brokered the sale of items to China, and that he was "probably
wrong" in transferring a Panther I camera-a "defense article" pursuant to
federal law-to the North China Research Institute of Electro-Optics and the
China National Electronics Import & Export Corporation.
The sentence was handed down by U.S. District Judge Ronald M. Whyte following
a guilty plea to one count in violation of 22 U.S.C. § 2778(b)(1)(A)(ii)(III)
and 22 C.F.R. §§ 129.3, 129.6. Judge Whyte also sentenced the defendant to a
three-year period of supervised release. The defendant will begin serving the
sentence on Feb.12, 2008.
Jeff Nedrow is the Assistant U.S. Attorney who is prosecuting the case with
the assistance of Susan Kreider. The prosecution is the result of a
two-and-a-half year investigation by agents of the Department of Homeland
Security, ICE; the FBI; the Office of Export Enforcement, Department of
Commerce; and the IRS, Criminal Investigation Division.
A copy of this press release may be found on the U.S. Attorney's Office's
website at http://www.usdoj.gov/usao/can. Electronic court filings and further
procedural and docket information are available at
https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges' calendars with schedules for upcoming court hearings can be viewed on
the court's website at http://www.cand.uscourts.gov.
SOURCE U.S. Department of Justice
Joshua Eaton of the Office of United States Attorney Scott N. Schools,
Northern District of California, +1-415-436-6958, josh.eaton@usdoj.gov
