California professor charged for exporting military chips to China

Yi-Chi Shih faces up to 219 years in prison for the chip conspiracy

Chip technician

A part-time University of California professor is facing 219 years in jail after being found guilty of illegally exporting integrated circuits with military applications to China.

Following a six-week trial, 64-year-old electrical engineer Yi-Chi Shih was found guilty of conspiracy to violate the International Emergency Economic Powers Act, which is a federal law that makes certain unauthorised exports illegal.

The semiconductor chips at the heart of this case were shipped to Chengdu GaStone Technology Company (CGTC) - a Chinese firm that was building a facility to produce wide-band, high-power semiconductor chips - known as monolithic microwave integrated circuits (MMICs).

Shih was the president of CGTC and the company was also placed on the Commerce Department's Entity List, due to its involvement in activities contrary to the national security and foreign policy interests of the US, according to court documents.

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Shih was also found guilty of mail fraud, wire fraud, subscribing to a false tax return, making false statements to government agents and conspiracy to gain unauthorised access to a protected computer to obtain information. In total, he was convicted on 18 counts in a federal grand jury indictment. 

Assistant Attorney General John C. Demers said that the department's China Initiative is focused on preventing and prosecuting thefts of US technology and intellectual property for the benefit of China.

"The defendant has been found guilty of conspiring to export sensitive semiconductor chips with military applications to China," he said. "I would like to thank the prosecutors and agents, including those from the Royal Canadian Mounted Police, for their efforts in this successful investigation and prosecution."

US Attorney Nick Hanna said that defendant schemed to export to China semiconductors with military and civilian uses and then lied about it to federal authorities, also noting that he failed to report income generated by the scheme on his tax returns.

According to evidence presented during the trial, Shih and a co-defendant, Kiet Ahn Mai, conspired to illegally provide Shih with unauthorised access to a protected computer belonging to a US company that manufacturers MMICs.

It's believed that Shih accessed the unnamed company's computer systems via its web portal after Mai obtained access by posing as a domestic customer seeking to obtain custom-designed MMICs that would be used solely in the US. The pair concealed Shih's true intent to transfer the US company's product to the People's Republic of China, via a Hollywood Hills-based company Shih controlled, called Pullman Lane Productions. The MMICs that Shih sent required a licence from the US Commerce Department.

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The unnamed company produce semiconductor chips with a number of military applications and its customers include the US Air Force and Navy. MMICs are used in missiles and missile guidance systems, fighter jets, electronic warfare and electronic countermeasures and radar applications.

District Judge John Kronstadt, who presided over the trial, has scheduled a sentencing hearing later this month where Shih faces a statutory maximum sentence of 219-years in federal prison.

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