Yi-Chi Shih, a Hollywood Hills, California, resident, was sentenced to over five years in prison for his role in a scheme to illegally ship integrated circuits with military applications to China, the Department of Justice said July 22. Shih was convicted of violating the International Emergency Economic Powers Act and the Export Administration Regulations and fined more than $600,000 in fines and restitution to the IRS (see 1907020071).

A federal grand jury in San Diego indicted four Chinese nationals for the alleged hacking into the computer systems of dozens of companies, universities and government entities in the U.S. and abroad during 2011-18, the Justice Department said in a July 19 news release. Three of the people, Ding Xiaoyang, Cheng Qingmin and Zhu Yunmin, were officers for the Hainan State Security Department (MSS) tasked with coordinating the computer hackers through a front company that the Chinese state agency established, Hainan Xiandun Technology Development. The fourth person, Wu Shurong, worked at Hainin Xiandun and created the malware to hack the systems used by foreign governments, companies and universities, DOJ said.

Ge Songtao, a Chinese national, was sentenced to three-and-a-half years in federal prison for conspiring to send false export information through the Commerce Department's Automated Export System and attempting to fraudulently export maritime raiding craft and engines to China, the Department of Justice said in a July 16 news release. The U.S. District Court for the Middle District of Florida ordered Ge to pay $114,834.27, the amount that he caused to be wired to a U.S. manufacturer to buy the raiding craft and engines.

Changji Esquel Textile (CJE), a Hong Kong-based apparel company and part of the Esquel group of companies, filed a July 6 lawsuit in the U.S. District Court for the District of Columbia to have its placement on the Commerce Department's Entity List dropped (Changji Esquel Textile Co. Ltd. et al. v. Gina M. Raimondo et al., D.C. Cir. #21-01798). The Trump administration put CJE on the list last year for alleged practices of using forced labor from the Muslim Uyghur minority population in China's Xinjiang region.

Jose Rafael Vasquez of Dallas was convicted by a federal jury for attempting to ship firearms, magazines and ammunition to Mexico, the U.S. Attorney for the Southern District of Texas said in a July 1 news release. Vasquez attempted to enter Mexico Oct. 15, 2020, through the Laredo Port of Entry carrying the firearms, magazines and ammunition in his vehicle. He was carrying three AK-47 rifles, eight semi-automatic handguns, 16 handgun magazines and about 4,700 rounds of 7.62 mm ammunition. Trial testimony indicated that senior members of Mexican criminal organizations highly valued these weapons, the release said.

The Bureau of Industry and Security fined a Fredericksburg, Virginia, military equipment manufacturer $200,000 for illegally exporting military-related items to military end-users in Russia, BIS said in a June 28 order. The company, Patriot 3, exported maritime jet boots with underwater propulsion systems despite having “knowledge” that the shipment violated the Export Administration Regulations, the order said. BIS said the boots, which were worth about $330,000 and exported in 2014, were controlled in connection with exports to military end-users or for military end-uses in Russia. Patriot 3 sent the boots to the Russian government’s Federal Guard Service, BIS said.

Amec Foster Wheeler Energy Ltd., a subsidiary of United Kingdom-based engineering company John Wood Group, agreed to pay a penalty of more than $18 million to settle charges that it paid bribes to foreign officials in Brazil in exchange for a $190 million contract to design a gas-to-chemicals complex, the U.S. Attorney's Office for the Eastern District of New York said in a June 25 news release. Amec Foster Wheeler was charged with conspiracy to violate the anti-bribery portions of the Foreign Corrupt Practices Act, the release said. The company entered into a three-year deferred prosecution agreement (DPA) to resolve the charges, the release said. From 2011 to 2014, Amec Foster Wheeler conspired with other parties, including an Italian sales agent, to pay bribes to Brazilian state-owned oil company officials to win the high-priced contract.

Two U.S. citizens and three foreign nationals were indicted by a federal grand jury in Los Angeles for conspiring to illicitly ship defense articles to Russia, the Department of Justice said in a June 21 news release. The goods, allegedly exported without a license in violation of the Arms Export Control Act, include thermal imaging riflescopes and night-vision goggles. The five allegedly obtained the items using false names and addresses, then shipped the articles to Russian co-conspirators, DOJ said. The nightscopes and goggles are regulated under the International Traffic in Arms Regulations, making their illegal exportation a violation of the AECA. Elena Shifrin of Mundelein, Illinois, and Vladimir Pridacha of Volo, Illinois, were arrested June 17 for their roles in the nearly four-year scheme. The other defendants are Boris Polosin of Russia, Vladimir Gohman of Israel and Igor Panchernikov, an Israeli national residing in Corona, California, during much of the scheme.

The Bureau of Industry and Security fined a Portland-based forwarding company $20,000 after the company illegally exported rifle scopes to the United Arab Emirates and China. The company, USGoBuy, LLC, exported more than $1,200 worth of scopes controlled for crime control reasons without their required licenses, BIS said in a June 17 order. Along with the penalties, USGoBuy also agreed to conduct an external audit of its export compliance program.

The U.S. District Court for the District of Columbia in a June 13 opinion rejected Russian businessman Oleg Deripaska's challenge to his sanctions listing, granting the Office of Foreign Assets Control's motion for summary judgment. Deripaska, who argued his listing as part of the wave of sanctions in the wake of Russia's annexation of the Crimean Peninsula in 2014 violated multiple procedural and constitutional rights. Deripaska claimed that OFAC violated his Fifth Amendment due process rights by “relying on undisclosed classified information and failing to provide him with adequately detailed unclassified summaries of that information.” Deripaska is a “non-resident alien who lacks sufficient contact with the United States” to bring a due process challenge, Judge Amit Mehta said. Mehta said that “even if the court were to consider Deripaska’s due process claim on the merits, it would reject it” because the International Emergency Economic Powers Act explicitly says that OFAC can rely on classified information in its determinations.