The U.S. Department of Justice recently unsealed an indictment charging Han Li and Lin Chen, two Chinese nationals, with violating the International Emergency Economic Powers Act (“IEEPA”) and Export Administration Regulations (“EAR”) for allegedly engaging in a scheme to export a semiconductor manufacturing machine from California to end users in People’s Republic of China (“PRC”). The defendants are charged with conspiracy to violate IEEPA; false electronic export information activities; smuggling; and IEEPA violations. Only one of the two defendants has been arrested in connection with these charges. According to the DOJ, Chen was arrested in Chicago on April 24, 2024, while U.S. authorities believe that Li is in the PRC.
According to the indictment, in 2014, the Department of Commerce added PRC-based Changdu GaStone Technology Company (“CGTC”) to the Entity List, which restricts the export of certain advanced technologies to these companies without obtaining a license and authorization from the Department of Commerce. Federal prosecutors allege that, between 2015 and 2018, Li And Chen conspired to obtain a DTX-150 Automatic Diamond Scriber Breaker machine, a machine used to process silicon wafer microchips, from California-based Dynatex International for CGTC without obtaining the required license or export authorization. The two allegedly attempted to conceal CGTC’s involvement in the transaction by fraudulently representing that an intermediary company, Jiangsu Hantang International (“JHI”), was the actual purchaser and end user.