Dual-Use Programmable Logic Devices to China

On December 18, 2012, federal prosecutors in the District of Oregon unsealed a 12-count indictment charging Wan Li Yuan, aka “Nicholas Bush,” a resident of China, and another Chinese resident known as “Jason Jiang,” with export and money laundering violations in connection with their alleged efforts to obtain dual-use programmable logic devices (PLDs) from the United States for export to China. According to the indictment, while operating from China, Yuan and Jiang created a sophisticated scheme to conceal their true identity and location in order to mislead U.S. companies into believing they were dealing with American customers so they could procure and send sensitive technologies to China without the required export licenses. Yuan and Jiang allegedly sought to procure PLDs made by Lattice Semiconductor Corporation in Oregon, which are designed to operate at extreme temperature ranges and which can have military applications such as in missiles and radar systems. To further his efforts, the indictment alleges that Yuan created a fake website and email addresses using the name of a legitimate New York-based company. Yuan requested U.S. companies to ship the desired parts to the address of a freight forwarder in New York, which he also falsely represented as being associated with the New York company whose business name Yuan had stolen. Through the investigation and use of an undercover operation, the FBI and Department of Commerce were able to seize approximately $414,000 in funds sent by Yuan as down payments for the Lattice PLDs. Lattice Semiconductor cooperated with the government in the investigation, which was conducted by the FBI and Department of Commerce’s BIS.