Exporter Charged With Violations of U.S. Export Regulations and False Statements to Government Agency

On April 6, 2009, the Department of Justice (DOJ) announced that federal grand jury sitting in San Jose, California, indicted Fu-Tain Lu (Lu), Funshine Technology, Inc. (Funshine), and Everjet Science and Technology Corporation (Everjet), charging them with conspiracy to violate U.S. export regulations and with lying to federal agents investigating Lu's conduct. 

Funshine, based in Cupertino, California, and Everjet, based in China, were founded by Lu. The indictment alleges that Lu and his two companies conspired to export sensitive microware amplifier technology to China without obtaining the required licenses or authorization from  the U.S. Department of Commerce. Items that Funshine shipped and attempted to ship to China were restricted for reasons of national security. 

The indictment details that the defendants knew about the licensing restrictions but chose not to comply. Charges against Lu and the companies are supported, in part, by using internal company e-mails in which an Everjet employee told a Funshine employee, "Since these products are a little bit sensitive, in case the maker asks you where the location of the end user is, please do not mention it is in China." In another e-mail, Lu advised an employee to pretend that the intended end-user for the goods was in Singapore, not China. 

Lu, as an individual defendant, faces five years imprisonment and a $250,000 fine (or, twice the gross financial gain from the offense) on each of the counts of conspiracy to violate export regulations and false statements to a government agency; for charges of violation of export regulations, the statutory maximum penalty is 10 years imprisonment and a $50,000 fine, or twice the gross gain from the offense.