Fuyi Sun, aka “Frank,” 53, a citizen of the People’s
Republic of China (China), was sentenced today to three years in prison for
violating the International Emergency Economic Powers Act (IEEPA) in connection
with a scheme to illegally export to China, without a license, high-grade
carbon fiber, which is used primarily in aerospace and military
applications. Sun pleaded guilty on
April 21.
Acting Assistant Attorney General for National Security Dana
J. Boente and Acting U.S. Attorney Joon H. Kim for the Southern District of New
York made the announcement. U.S.
District Judge Alvin K. Hellerstein issued the sentence.
“Today, Sun is being held accountable for attempting to
procure high grade carbon fiber – a material which has dual aerospace and
defense applications – for a source he identified as the Chinese military,”
said Acting Assistant Attorney General Boente.
“Identifying and prosecuting those who seek to violate IEEPA and other
laws designed to protect our strategic commodities from those who may wish us
harm remains a top priority of the National Security Division.”
“For nearly five years, Fuyi Sun tried to skirt U.S. export
laws to obtain high-grade carbon fiber for the Chinese government. He spent
thousands of dollars and took years of covert actions to avoid detection of his
plan to purchase this highly protected material,” said Acting U.S. Attorney
Kim. “Unbeknownst to Sun, however, he wasn’t making a deal with an unscrupulous
company – he was dealing with undercover federal law enforcement agents, who
foiled his clandestine plot.”
According to the allegations contained in the Complaint and
Indictment filed against Sun, and statements made in court filings and
proceedings in open court:
Since approximately 2011, Sun has attempted to acquire
extremely high-grade carbon fiber, including Toray type M60JB-3000-50B carbon
fiber (M60 Carbon Fiber). M60 Carbon
Fiber has applications in aerospace technologies, unmanned aerial vehicles
(commonly known as drones) and other government defense applications. Accordingly, M60 Carbon Fiber is strictly
controlled for nuclear non-proliferation and anti-terrorism reasons. As part of these restrictions, the export of
M60 Carbon Fiber to China without a license is prohibited.
In furtherance of his attempts to illegally export M60
Carbon Fiber from the U.S. to China without a license, Sun contacted what he
believed was a distributor of carbon fiber – but which was, in fact, an
undercover entity created by the Department of Homeland Security, Homeland
Security Investigations (HSI) and “staffed” by HSI undercover special agents
(the UC Company). Sun inquired about purchasing
the M60 Carbon Fiber without the required license. In the course of his years-long
communications with the undercover agents and UC Company, Sun suggested various
security measures that he believed would protect them from “U.S. intelligence.” Among other such measures, at one point, Sun
instructed the undercover agents to use the term “banana” instead of “carbon
fiber” in their communications.
Consequently, soon thereafter he inquired about purchasing 450 kilograms
of “banana” for more than $62,000. In
order to avoid detection, Sun also suggested removing the identifying barcodes
for the M60 Carbon Fiber, prior to transshipment, and further suggested that
they identify the M60 Carbon Fiber as “acrylic fiber” in customs documents.
On April 11, 2016, Sun traveled from China to New York for
the purpose of purchasing M60 Carbon Fiber from the UC Company. During meetings with the undercover agents on
April 11 and 12, among other things, Sun repeatedly suggested that the Chinese
military was the ultimate end-user for the M60 Carbon Fiber he sought to
acquire from the UC Company, and claimed to have personally worked in the
Chinese missile program. Sun further
asserted that he maintained a close relationship with the Chinese military, had
a sophisticated understanding of the Chinese military’s need for carbon fiber,
and suggested that he would be supplying the M60 Carbon Fiber to the Chinese
military or to institutions closely associated with it.
On April 12, 2016, Sun agreed to purchase two cases of M60
Carbon Fiber from the UC Company. On
that date, Sun paid the undercover agents purporting to represent the UC
Company $23,000 in cash for the carbon fiber, as well as an additional $2,000
as compensation for the risk he believed the UC Company was taking to illegally
export the carbon fiber to China without a license. Sun was arrested the next day.
***
Mr. Boente and Mr. Kim praised the extraordinary
investigative work of the New York Field Office of the Department of Homeland
Security, Homeland Security Investigations; the New York Field Office of the
Department of Commerce, Bureau of Industry and Security, Office of Export
Enforcement; and the Northeast Field Office of the Department of Defense,
Defense Criminal Investigative Service.
Mr. Kim also thanked the Counterintelligence and Export Control Section
of the National Security Division.
Assistant U.S. Attorneys Matthew Podolsky, Patrick Egan and
Nick Lewin of the Southern District of New York, and Trial Attorney David
Recker of the Counterintelligence and Export Control Section of the National
Security Division are prosecuting the case.
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