Professor convicted of smuggling microchips to China faces 219 years in prison
Yi Chi Shih of UCLA exported US-made microchips for China's Chengdu GaStone Technology CompanyBy Humza Aamir
In brief: An adjunct professor of electrical engineering at the University of California, Yi Chi Shih, was convicted of 18 federal charges on June 26 when he was found to be involved in an illegal scheme of obtaining monolithic microwave integrated circuits (MMICs) from an American company and smuggling them to China's Chengdu GaStone Technology Company. Shih had also previously served as president of the Chinese company that was looking towards building its own MMIC manufacturing facility.
The US Justice Department announced a sentence of 219 years for Yi Chi Shih, a Chinese-American electrical engineer and adjunct professor at UCLA for illegally exporting microchips to China. The federal court in its six-week trial found Shih guilty on 18 counts, including mail and wire fraud, fabricated tax returns, falsifying statements to a government agency, conspiring to gain unauthorized access to a protected computer and violating the International Emergency Economic Powers Act, a federal law that bars unauthorized exports in light of an "unusual and extraordinary threat [...] to the national security, foreign policy, or economy of the United States."
64 year old Yi Chi Shih and his co-defendant Kiet Ahn Mai, 65, reportedly gained access to a protected computer owned by a US manufacturer of semiconductor chips known as monolithic microwave integrated circuits (MMICs) through the company's web portal. Mai posed as a "domestic customer" for the microchips that were meant to be used in the US only, notes the Justice Department, adding that Shih and Mai concealed the former's intention of sending the microchips to Chengdu GaStone Technology Company in China.
Shih was required to get a license from the Commerce Department for exporting the MMICs to China, which the Justice Department says was never sought or obtained. Shih also had previously been a president at CGTC, which was placed on the Commerce Department's Entity List in 2014 "due to its involvement in activities contrary to the national security and foreign policy interest of the United States - specifically, that it had been involved in the illicit procurement of commodities and items for unauthorized military end use in China."
The court observed that these chips can be used in various military applications like "missiles, missile guidance systems, fighter jets, electronic warfare, electronic warfare countermeasures and radar applications," with the undisclosed American company having commercial and military customers including the Air Force, Navy and the Defense Advanced Research Projects Agency.
Shih funded the scheme through his US based company Pullman Lane Productions LLC, which he used "to funnel funds provided by Chinese entities to finance the manufacturing of MMICs by the victim company." A Beijing-based company, which incidentally was placed on the Entity List the same day as CGTC, was used to finance Shih's company.
James Spertus, Shih's lawyer, reportedly said that Shih never sent the microchips to China but had designed them himself for an academic research project, expressing that the government turned the legitimate research of the professor into a conspiracy about Chinese military trying to steal US technology.
"This defendant schemed to export to China semiconductors with military and civilian uses, then he lied about it to federal authorities and failed to report income generated by the scheme on his tax returns," said United States Attorney Nick Hanna.
John Demers, the Assistant Attorney for National Security, thanked the Royal Canadian Mounted Police for their help in the investigation and prosecution of the case. The Canadians were reportedly asked by US authorities to search the lab of Shih's brother, Ishiang, an associate engineering professor at McGill University in Montreal who had previously collaborated with his brother on numerous scientific projects.
Indicted in the case in January 2018, Shih's co-defendant Mai pleaded guilty in December 2018 "to one felony count of smuggling and is scheduled to be sentenced on September 19, at which time he will face a statutory maximum sentence of 10 years in federal prison," with the District Judge John A. Kronstadt to schedule a sentence hearing for Shih who faces "statutory maximum sentence of 219 years in federal prison."