PROVIDENCE – The top executive of a California-based electronics company, the business and another employee have been indicted by a federal grand jury on charges of a conspiracy to conceal information from federal officials as part of a scheme to export chemicals manufactured and distributed by a Rhode Island-based company, the U.S. Department of Justice said on Monday.
The Rhode Island company was not publicly identified and has not charged with a crime, the DOJ said.
Charged in U.S. District Court are the Ontario, Calif.-based company, Broad Tech Systems Inc., its CEO, chief financial officer and president, Tao Jiang, and Equipment Engineer Bohr Winn-Shih. They are alleged to have tried to ship HiPR 6517 Photoresist and HPRD 441 Developer to a company in China, in violation of the Export Control Reform Act. The chemicals are essential in the chip manufacturing process, DOJ said.
The accused were alleged to have knowingly submitted false and misleading documentation to the U.S. government and shipping companies to have the products illegally shipped to China Electronics Technology Group Corporation 55th Research Institute, also known as NEDI, which is a state-owned entity in China that mainly engages in the manufacturing of electronic components, including for the Chinese military. NEDI was included on a U.S government list of Chinese companies to which U.S companies are prohibited from exporting commodities.
The Department of Commerce halted a shipment in October 2018 of one of the chemicals and alerted the Rhode Island-based manufacturer of the prohibition of the exporting of commodities to NEDI. The product was returned to the manufacturer. Several days later, the company received another order from Broad Tech System, the DOJ said, ordering even more of the chemical for a different company in China, called NTESY. The company reported the order as suspicious, as it had never done business with Broad Tech before. The DOJ alleges that NTESY was a method to conceal a shipment to NEDI.
Broad Tech was accused of providing false information to a California-based freight forwarder about the recipient of the original order and later for another order of both chemicals. The California-based freight company then filed export documents with the U.S. Department of Commerce that falsely identified the recipient of the chemicals. The accused then allegedly received a wire transfer from a bank in the U.S. from Nanjing, China. Records show the account was controlled by NEDI, the DOJ said.
The company, Jiang and Winn-Shih are charged with conspiracy, violation of the Export Control Reform Act and money-laundering conspiracy.
