A Chinese national on business in Massachusetts was arrested for illegally supplying U.S. origin parts to end-users in China in violation of U.S. export laws.
Qiang Hu, also known as Johnson Hu, was charged in a complaint with conspiracy to violate the Export Administration Regulations and the International Emergency Economic Powers Act. The complaint, originally filed on May 18, was unsealed after Hu’s arrest at his hotel in North Andover, Mass. on Wednesday, the Commerce Department’s Bureau of Industry and Security said in a statement.
The complaint alleges Hu has been the sales manager at MKS Instruments Shanghai, Ltd. (MKS-Shanghai) since 2008. MKS-Shanghai is the Shanghai sales office of MKS Instruments, Inc. (MKS), which is based in Andover. Hu’s employment gave him access to MKS manufactured parts, including export-controlled pressure-measuring sensors, which are commonly known as pressure transducers. Pressure transducers are export-controlled because they are used in gas centrifuges to enrich uranium and produce weapons-grade uranium, BIS said.
The complaint alleges that starting in 2007, Hu and others caused thousands of MKS pressure transducers “worth millions of dollars” to be exported from the United States and delivered to unauthorized end-users using export licenses that were fraudulently obtained from the U.S. Commerce Department.
The complaint also says Hu and his co-conspirators used two primary means of deception to export the pressure transducers:
- The conspirators used licenses issued to legitimate MKS customers to export the pressure transducers to China, and then caused the parts to be delivered to other end-users who were not themselves named on the export licenses or authorized to receive the parts.
- They obtained export licenses in the name of a front company and then used these fraudulently obtained licenses to export the parts to China, where they were delivered to the actual end-users.
BIS said MKS is not a target of the government's investigation.
According to the Commerce Department, Hu remains in custody, and is scheduled for a detention hearing on May 31. If convicted, he faces a maximum sentence of 20 years in federal prison to be followed by up to three years of supervised release, and a $1 million fine.