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• Pressure Transducers with Nuclear Applications to China and Elsewhere -- On May 22, 2012,<br />
Qiang Hu, aka Johnson Hu, 47, a Chinese national and resident of Shanghai was arrested after he<br />
arrived in Massachusetts for a business meeting. He had been charged in a May 18, 2012<br />
criminal complaint in the District of Massachusetts with conspiracy to illegally export from the<br />
United States to China and elsewhere dual-use pressure transducers in violation of the<br />
International Emergency Economic Powers Act (IEEPA). The complaint was unsealed after his<br />
arrest. The pressure transducers in question, manufactured by MKS Instruments headquartered in<br />
Andover, Mass., are controlled for export by the Commerce Department because they can be used<br />
in gas centrifuges to enrich uranium and produce weapons-grade uranium, according to the<br />
complaint. Specifically, they can be used to measure gas pressure of uranium hexafluoride in<br />
centrifuge cascades. According to the complaint, Hu worked as a sales manager for a subsidiary<br />
of MKS Instruments in Shanghai, where he has been employed since 2008. Hu and his coconspirators<br />
allegedly caused thousands of MKS export-controlled pressure transducers, worth<br />
more than $6.5 million, to be illegally exported from the United States to unauthorized end-users<br />
in China and elsewhere using export licenses fraudulently obtained from the Department of<br />
Commerce. The complaint alleges that Hu and his co-conspirators used two primary means of<br />
deception to export the pressure transducers. First, the conspirators used licenses issued to<br />
legitimate MKS business customers to export the pressure transducers to China, and then caused<br />
the parts to be delivered to other end-users who were not themselves named on the export licenses<br />
or authorized to receive the parts. Second, the conspirators obtained export licenses in the name<br />
of a front company and then used these fraudulently obtained licenses to export the parts to<br />
China, where they were delivered to the actual end-users. MKS is not a target of the federal<br />
investigation into these matters. This investigation was conducted by FBI, ICE, and BIS.<br />
• Aircraft Components and Other Materials to Iran – On May 15, 2012, Ulrich Davis, a former<br />
manager of a Netherlands-based freight forwarding company, was sentenced in the District of<br />
New Jersey to six months in prison after pleading guilty on Feb. 6, 2012 to conspiracy to defraud<br />
the United States by facilitating the illegal export of goods to Iran. Davis was first arrested on<br />
Aug. 6, 2011. In October 2007, the Commerce Department issued a Temporary Denial Order<br />
(TDO) denying export privileges to the company of a co-conspirator of Davis. The TDO<br />
prohibited any person, including Davis, from directly or indirectly exporting or re-exporting to or<br />
on behalf of the co-conspirator. The co-conspirator located in another country, purchased U.S.<br />
origin goods from a New Jersey firm for businesses and governmental agencies of Iran. The New<br />
Jersey firm was in the business of reselling chemicals, lubricants, sealants and other products<br />
used in the aircraft industry. As part of the conspiracy, Davis and his coconspirator directed a<br />
New York freight forwarding company to arrange for a trucking company to pick up commodities<br />
from the New Jersey company and transport them to New York on behalf of the coconspirator’s<br />
company. Davis admitted that in November 2007, he completed an air waybill that represented<br />
certain acrylic adhesives and spray paint coatings obtained from a New Jersey company were to<br />
be forwarded on behalf of the co-conspirator’s company to Iran after issuance of the TDO. Davis<br />
acknowledged that at no time was any relief, exception, or other authorization sought from the<br />
TDO. The investigation was conducted by BIS, ICE, and DCIS.<br />
• Trade Secrets to Competitors in China – On May 7, 2012, an indictment returned in the District<br />
of Utah in April 2012 was unsealed charging two people and two companies with theft of trade<br />
secrets, wire fraud, and conspiracy to commit wire fraud in connection with the alleged theft of<br />
trade secrets from Orbit Irrigation Products, an irrigation company headquartered in Utah. The<br />
defendants are Janice Kuang Capener and Luo Jun, both citizens of China, as well as Sunhills<br />
International LLC, a California company established by Capener; and Zhejiang Hongchen<br />
Irrigation Equipment Co., LTD, a Chinese company under contract with Orbit. According to<br />
court documents, Capener worked at Orbit from June 2003 through Nov. 1, 2009, including<br />
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