Two plead guilty in China microchip case: US

The two pleaded guilty for conspiring to violate a US arms embargo on China.

Washington: Two Chinese nationals pleaded guilty Wednesday to conspiring to smuggle radiation hardened microchips to companies controlled by Beijing in violation of a US arms embargo, the Justice Department said.

Hong Wei Xian, 32, and Li Li, 33, were arrested in Hungary in September and turned over to US custody last month after they waived extradition, the department said.

The two, who face up to five years in prison, pleaded guilty to conspiring to violate a US arms embargo on China by trying to acquire thousands of radiation hardened programmable read-only memory microchips from a company in Virginia.

Their sentencing was scheduled for August 26.

"These defendants sought advanced US technology for the use by the PRC for military and space-related programs," said US Attorney Neil McBride.

"Whether it`s through illegal exports, classic espionage, or economic espionage, the objective is the same: to obtain sensitive technology, secrets, or other data that will help the PRC modernize its military and expand its economic capabilities," he said.

The microchips, which are used to store the initial start-up program for a computer system, are built to withstand conditions in space.

Xian and Li were officers for Beijing Starcreates Space Science and Technology Development Company Limited, which sells programmable read-only memory microchips to China Aerospace Science and Technology Corporation, which is controlled by the Chinese government.

"Xian and Li knew a license was required, but did not seek to obtain one because it would have required them to identify the end user -- their PRC-controlled company -- and describe the end use that would occur on behalf of the PRC," the Justice Department said.

"To avoid drawing attention to the true purpose of their orders, the defendants conspired to break up orders into multiple shipments and designate countries outside the PRC for delivery," it said.

Bureau Report

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