Enforcement

Deputy Attorney General Lisa O. Monaco delivered remarks on "the Promise and Peril of AI," at Oxford University February 14, calling  an "inflection point with AI." Claiming that "AI is the ultimate disruptive technology," she vowed that the Distruptive Technology Strike Force established last year to coordinate export control activities, will place AI at the "very top" of its enforcement priority list.

A federal criminal complaint was unsealed Monday charging two men with conspiring to purchase and illegally export millions of dollars’ worth of fully automatic rifles, grenade launchers, Stinger missile systems, hand grenades, sniper rifles, ammunition, and other export-controlled items from the United States to South Sudan, in violation of the Arms Export Control Act (AECA) and the Export Control Reform Act (ECRA).

A federal grand jury indicted a Chinese national, charging him with four counts of theft of trade secrets in connection with an alleged plan to steal from Google LLC (Google) proprietary information related to artificial intelligence (AI) technology. According to the indictment, returned on March 5, Linwei Ding, aka Leon Ding, 38, a national of the People’s Republic of China and resident of Newark, California, transferred sensitive Google trade secrets and other confidential information from Google’s network to his personal account while secretly affiliating himself with PRC-based companies in the AI industry. Ding was arrested March 6th.

A California fashion company executive was sentenced today to 48 months in federal prison for undervaluing imported garments in a scheme to avoid paying millions of dollars in customs duties. The Executive's company, Ghacham Inc., which does business under the “Platini” brand name, imported clothing from China and submitted fraudulent invoices to U.S. Customs and Border Protection (CBP) that undervalued the shipments, allowing the company to avoid paying the full amounts of tariffs owed on the imports.

A Russian national based in Hong Kong pleaded guilty to money laundering and smuggling charges for illicitly procuring dual-use, military-grade microelectronics for export to Russia, Members of the conspiracy procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that the Hong Kong shell entity was sending the shipments to end users located in China, Hong Kong, and other countries outside of Russia for use in electron microscopes for medical research. In reality, the OLED micro-displays were destined for end users in Russia.

The Departments of Justice, Commerce, and Treasury’s Office of Foreign Assets Control, have issued a Tri-Seal Compliance Note: Obligations of foreign-based persons to comply with U.S. sanctions and export control laws. The Note highlights the applicability of U.S. sanctions and export control laws to persons and entities located abroad, as well as the enforcement mechanisms that are available for the U.S. government to hold non-U.S. persons accountable for violations of such laws, including criminal prosecution.

Following the lead of its fellow commodity trading firms Vitol, Freepoint, Trafigura and Glencore, Geneva-based Gunvor Group., has pleaded guilty and will pay over $661 million to resolve an investigation by the U.S. Justice Department into violations of the Foreign Corrupt Practices Act (FCPA). Gunvor’s guilty plea stemmed from the company’s corrupt scheme to pay substantial bribes to Ecuadorean government officials to secure business with Ecuador’s state-owned and state-controlled oil company, Petroecuador.

A Florida man pleaded guilty Wednesday to federal criminal charges for conspiring to illegally export thousands of turtles to Germany and Hong Kong, and falsifying documents to conceal his conduct. In other Lacey Act News, a 75 year old lepidopterist in New York pleaded guilty to smuggling rare birdwing butterflies.

The Commerce Department’s Bureau of Industry and Security (BIS) added two entities to the Entity List under seven entries for activities contrary to U.S. national security and foreign policy interests monday. One entity was found to have been involved in supporting online censorship and surveillance to target political actors and human rights activities in Egypt, and the other is being added for diversion of U.S. items to a Chinese Entity Listed party. 

A member of the Yakuza crime syndicate was indicted Feb. 21 for trafficking nuclear materials, including weapons-grade plutonium, from Burma.  The scheme was uncovered during a DEA investigation into narcotics and firearms trafficking. The Justice Department announced the issuance of a Superseding Indictment charging TAKESHI EBISAWA with conspiring with a network of associates to traffic nuclear materials from Burma to other countries.  

The Justice Department unsealed of an Indictment charging sanctioned Russian oligarch and the President and Chairman of a Russian state-owned VTB bank, Andrey Kostin, with participating in two separate schemes that violated U.S. sanctions. The first scheme was to operate, maintain, and improve  two superyachts, collectively worth over $135 million, while the second scheme was related to the operation and transfer of Mr. Kostin's home in Aspen, Colorado.

Nearly $500,000 of forfeited proceeds of an illicit machine tool sale to Russian buyers will be used to support a drone-based program to assess the damage Russian aggression has done to Ukraine’s electrical distribution and transmission infrastructure. Deputy Attorney General Lisa Monaco and Estonian Secretary General Tõnis Saar announced  the transfer at the Munich Security Conference Saturday Feb 17.

Marking the one-year anniversary of the Disruptive Technology Strike Force, the Departments of Justice and Commerce released a joint fact sheet touting their accomplishments. The Task force initiated 14 cases involving alleged sanctions and export control violations, smuggling conspiracies, and other offenses related to the unlawful transfer of sensitive information, goods, and military-grade technology to Russia, China, or Iran. These cases were brought through the work of U.S. Attorneys’ Offices throughout the country and the Counterintelligence and Export Control Section in Justice Department’s National Security Division.

February 15, the DOJ unsealed charges against Mauricio Gomez Baez, former Senior Vice President of Stericycle LATAM Between 2011 and 2016, Mr. Gomez Baez, a Mexican citizen and resident of Miami conspired with other Stericycle employees and agents to pay approximately $10.5 million in bribes to Mexican, Brazilian, and Argentinian government officials in order to obtain government contracts for medical waste collection for Stericycle.

A Jamaica, NY freight forwarder settled with the Bureau of Industry and Security for facilitating the export of enterprise servers and switches from the US to Iran without the required US government authorization. The settlement calls for a two-year suspended denial of its export privileges, thereafter waived, provided no futher violations and completion of compliance training.

A Montreal woman pleaded guilty to money laundering conspiracy for her role in a multimillion-dollar scheme to send components used in unnamed aerial vehicles (UAVs) and guided missile systems and other weapons to sanctioned entities in Russia.  Last October, a criminal complaint was unsealed, and a Brooklyn, New York, resident and two Canadian nationals were arrested in connection with a global procurement scheme in which the defendants used two corporate entities registered in Brooklyn to unlawfully source and purchase dual-use electronics on behalf of end-users in Russia, including companies affiliated with the Russian military.

A 747 Boeing Freighter was flown to Miami from Buenos Aires by U.S. Marshalls in the latest chapter of the Mahan Air Saga.  Mahan, a sanctioned Iranian airline is affiliated with the Islamic Revolutionary Guard Corp-Qods Force (IRGC-QF), a designated Foreign Terrorist Organization (FTO). On Oct. 20, 2022, in support of its ongoing criminal investigation, the United States filed a civil forfeiture complaint alleging that the aircraft’s transfer from Mahan Air to Empresa de Transporte Aéreocargo del Sur, S.A. (EMTRASUR), a Venezuelan cargo airline and subsidiary of a Venezuelan state-owned company, violated U.S. export control laws.

On Feb. 7 and 8, the Justice Department's National Security Division hosted a summit in Phoenix, Arizona, to commemorate the one-year anniversary of the launch of its Disruptive Technology Strike Force - an interagency law enforcement effort aimed at preventing critical technologies from being acquired by authoritarian regimes and hostile nation-states. The two-day event began with a law enforcement-only day focused on case studies, best investigative practices, briefings on cutting-edge technologies, and one-year reports from all 15 of the local cells. On the second day, the Strike Force was joined by private sector and academia representatives from across the country for sessions describing the work of the Strike Force across multiple subject areas, corporate compliance, best practices for building trade compliance programs, and law enforcement outreach efforts.

In two separate cases out of U.S. Attorneys’ Offices on opposite coasts, several individuals are charged – one of whom was arrested yesterday – in connection with sophisticated schemes to transfer sensitive technology, goods, and information for the benefit of hostile foreign adversaries, in violation of U.S. law. In the Eastern District of New York, a fugitive father and son team of Iranian nationals are charged with conspiring to export equipment used in the aerospace industry to the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA), in connection with an alleged conspiracy to illegally export U.S. goods and technology without the required licenses. In the Central District of California, a naturalized chinese was arrested for allegedly stealing trade secrets developed for use by the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles.

A naturalized Chinese was arrested for allegedly stealing trade secrets developed for use by the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles. Chenguang Gong, 57, of San Jose,is charged in a criminal complaint with theft of trade secrets. For least eight years prior to his arrest, Gong participated in PRC Government-sponsored talent programs. Gong transferred more than 3,600 files from HRL Laboratories, a research and development company owned by The Boeing Company to personal storage devices during his brief tenure with the company last year. Gong worked for HRL from January through April 2023.

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