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An electrical engineer who schemed to illegally obtain integrated circuits with military applications that were exported to China without the required filing of electronic export information was sentenced on July 22 to 63 months in federal prison.
Yi-Chi Shih, 66, who resides in the Hollywood Hills, was sentenced by United States District Judge John A. Kronstadt, who also ordered the defendant to pay $362,698 in restitution to the IRS and fined him $300,000.
After a seven-week jury trial that concluded in July 2019, Shih was convicted of one count of conspiracy to violate the International Emergency Economic Powers Act and the Export Administration Regulations Act. Shih also was convicted of four counts of mail fraud, two counts of wire fraud, one count of conspiracy to gain unauthorized access to a protected computer to obtain information, one count of making false statements to an FBI agent, three counts of subscribing to a false tax return, and four counts of making false statements to the IRS about his foreign assets.
Shih defrauded a United States company that manufactured high-powered semiconductor chips known as monolithic microwave integrated circuits out of its confidential and proprietary business information, according to trial evidence. As part of the scheme, Shih accessed the victim company’s web portal after obtaining access through an associate who posed as a domestic customer seeking to obtain custom-designed circuits to solely be used in the United States. Shih concealed his true intent to export the U.S. company’s products to the People’s Republic of China.
The company’s semiconductor chips have commercial and military applications. Shih was the president of Chengdu GaStone Technology Company, a Chinese company that was building a monolithic microwave integrated circuit manufacturing facility in Chengdu. In 2014, CGTC was placed on the United States Commerce Department’s Entity List, according to court documents, “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.”
Shih used a Hollywood Hills-based company he controlled – Pullman Lane Productions, LLC – to funnel funds provided by Chinese entities to the U.S. company manufacturing the monolithic microwave integrated circuits. Shih’s associate, Kiet Mai, pleaded guilty in December 2018 to one felony count of smuggling and was sentenced to 18 months’ probation and fined $5,000.
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