The U.S. Attorney’s Office for Washington, D.C. announced Wednesday that four Chinese nationals have been charged for an alleged years-long conspiracy involving the illegal smuggling of U.S.-origin electronic components with military applications to the Islamic Republic of Iran.
The federal indictment accuses Baoxia Liu, aka Emily Liu; Yiu Wa Yung, aka Stephen Yung; Yongxin Li, aka Emma Lee; and Yanlai Zhong, aka Sydney Chung, of unlawfully exporting the U.S.-made electronic components through China and Hong Kong.
The D.C. prosecutors allege that the manufactured parts were smuggled to entities affiliated with Iran’s Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL), the Iranian military’s research and development and manufacturing agency.
According to the indictment, the U.S.-origin items funneled to the Iranian military agencies included electronics and components that could be utilized in the production of unmanned aerial vehicles (UAVs), ballistic missile systems, and other military end uses.
“For more than a decade, the defendants allegedly orchestrated a scheme to smuggle U.S. manufactured parts to the IRGC and the Iranian agency charged with developing ballistic missiles and UAVs,” said Assistant Attorney General Matthew Olsen of the Justice Department’s National Security Division Wednesday.
“Such efforts to unlawfully obtain U.S. technology directly threaten our national security, and we will use every tool at our disposal to sever the illicit supply chains that fuel the Iranian regime’s malign activity,” Olsen said.
The smuggling operation allegedly ran from as early as May 2007 until at least July 2020, during which time the Chinese nationals are accused of using an array of front companies in the People’s Republic of China (PRC) in order to conceal that the electronics were sent to the Iranian entities.
The four Chinese nationals are charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA), violating IEEPA, smuggling goods from the United States, and one count of submitting false or misleading export information.
The D.C. U.S. Attorney’s Office said that arrest warrants have been issued for the four defendants, but that as of Wednesday all four remain fugitives.
If convicted, the defendants face a maximum penalty of 20 years in prison for violating the IEEPA; up to 10 years in prison for smuggling goods from the United States; and up to five years in prison for each count of conspiracy and submitting false or misleading export information.