Chinese National Pleads Guilty To Illegally Exporting Semiconductor Manufacturing Machine

SAN FRANCISCO - Lin Chen pleaded guilty in federal court today to illegally exporting U.S. technology to a prohibited end user in China, in violation of the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR). The plea was accepted by the Hon. William Alsup, Senior U.S. District Judge.

In pleading guilty, Chen, 65, a citizen of the People's Republic of China (PRC), admitted to acting on behalf of Jiangsu Hantang International Trade Group Corp., Ltd. (JHI), a company headquartered in Nanjing, PRC, to procure a wafer cutting machine on behalf of Chengdu GaStone Technology Co., Ltd. (GaStone), an entity located in Chengdu, PRC. Chen admitted to knowing that GaStone was designated on the U.S. Department of Commerce's Entity List on Aug. 1, 2014. Federal regulations restrict the export of certain items to companies, research institutions, and other entities identified on the Department of Commerce's Entity List. Under applicable Department of Commerce regulations, wafer cutting machines, which are used to cut thin semiconductors used in electronics (also known as silicon wafers), require a license for export to end-users such as GaStone.

According to the plea agreement, by no later than Dec. 4, 2015, Chen knew that GaStone was prohibited from receiving restricted exports without a license, including a DTX-150 Scribe and Break Machine, a machine for processing silicon wafer microchips. On approximately Dec. 10, 2015, Chen worked with a co-defendant to arrange the sale of a DTX-150 to GaStone by shipping it to the PRC in the name of JHI without an export license from Commerce. Chen used JHI's status as an intermediary to conceal GaStone as the true end-user of the technology.

A federal grand jury indicted Chen on Dec. 1, 2020, charging him with conspiracy to violate IEEPA; submitting false electronic export information; smuggling; and IEEPA violations. Under the plea agreement, Chen pleaded guilty to count four, causing an unlawful export in violation of IEEPA. Defendant currently is released on bond.

Chen's sentencing hearing is scheduled for January 28, 2025, before the Judge Alsup. The maximum statutory penalty for an IEEPA violation is up to 20 years in prison and a $1 million fine. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

United States Attorney Ismail J. Ramsey, Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp, Homeland Security Investigations (HSI) Special Agent in Charge Tatum King, and Brent Burmester, U.S. Department of Commerce, Bureau of Industry and Security (BIS) Special Agent in Charge, San Jose Field Office, made the announcement today.

Assistant U.S. Attorney Colin Sampson and Brett Reynolds of the National Security Division's Counterintelligence and Export Control Section are prosecuting the case with the assistance of Claudia Hyslop and Nina Burney. The prosecution is the result of an investigation by FBI, HSI, and BIS.