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US Opens Cases Against 2 Technology Transfer Schemes Involving Iranian, Chinese Governments

DOJ this week announced charges involving two illegal technology transfer schemes, which were meant to benefit the Chinese and Iranian governments.

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On Feb. 7, DOJ charged Iranian residents Abolfazi Bazzazi and his son, Mohammad Resa Bazzazi, with conspiracy to violate the International Emergency Economic Powers Act and smuggling goods from the U.S., which combined carry a maximum 30-year prison stint. Both remain at large.

From 2008 to 2019, the duo and their co-conspirators sought to procure goods and technology, including export-controlled "aeronautical ground support equipment, ultraviolet flame detectors, and firefighting equipment, from U.S. companies for end users in Iran, including the Government of Iran," DOJ said. The Bazzazis hid the final destination of the products by "attempting to forward them through intermediaries in Europe and elsewhere," the indictment alleged.

Two days prior, the U.S. had charged Chinese native and U.S. citizen Chenguang Gong of Thousand Oaks, California, with stealing trade secrets. From March to April, Gong who worked at an unnamed "research and development company" in Malibu, California, allegedly transferred thousands of files from his work computer to three "personal storage devices." The documents were transferred after he accepted a job at one of the unnamed company's main competitors.

The files held "proprietary and trade secret information related to the development and design of a readout integrated circuit that allows space-based systems to detect missile launches and track ballistic and hypersonic missiles while providing resilience and a readout integrated circuit that allows aircraft to track incoming threats in low visibility environments," DOJ alleged. Files also were transferred containing secrets related to next-generation sensors, which can "detect low observable targets while demonstrating improved survivability in strategic space applications," along with blueprints for the "mechanical assemblies used to house and cryogenically cool the victim company's sensors."

DOJ said that from 2014 to 2022, while employed at numerous U.S. technology companies, Gong submitted applications to Chinese government "Talent Programs," through which Beijing identifies individuals outside of China who have special skills that can transform the Chinese economy and military. Gong allegedly sent a business proposal to someone at the 38th Research Institute of the China Electronics Technology Group Corp. while working at a Dallas-based information technology company.

The proposal laid out a plan to make high-performance analog-to-digital converters like the ones made by his employer, DOJ said. Gong traveled to China "several times to seek Talent Program funding" to develop the converters, the indictment alleged.