A businessman in southern California was sentenced on March 30 to one year and one day in prison for illegally brokering sales of embargoed arms from China to the United States, and for falsifying the correlating tax returns.
Under the scheme, Xie used his California-based company, Bio-Medical Optics LLC, to broker the shipment of defense equipment listed on the U.S. Munitions List and U.S. Munitions Import Lists.
Those lists identify the regulated components and systems used in American military and space-based equipment. Federal law requires that those who manufacture or export the items on those lists obtain a license and register with the State Department.
Xie never obtained a license nor registered with the State Department, the DOJ said.
Additionally, the import of the defense articles violated an arms embargo imposed on China in 1989, which restricts the import and export of arms between both nations.
According to the DOJ, Xie admitted under a plea agreement that he had located a manufacturer in China to produce defense articles for his clients, and imported them in violation of the embargo.
His illicit earnings brought in hundreds of thousands of dollars over the course of several years, as he charged commissions or other fees for his role in facilitating shipments to and from China and the United States, the department said.
He also admitted to falsifying his tax returns to cover up the ill-gotten gains, which the DOJ estimated to have cost the IRS more than $100,000 in revenue.
The sentencing is just the latest in a large uptick of China-related crime and espionage prosecuted in the United States. The DOJ has been eager to highlight its successes in combating the issue since its controversial decision in February to terminate the Trump-era China Initiative, an anti-espionage program.
The DOJ unsealed charges against six men in four separate high-profile cases in March, all of whom were accused of carrying out the dictates of the Chinese Communist Party on American soil.
The cases include alleged conspiracies to attack and smear a U.S. Army veteran running for Congress, to stalk an American Olympian and her father, and to spy on a dissident artist.
“In discussing these cases, I want to reiterate that the department remains focused on the actions of the [Chinese communist] government and its agents, not the Chinese people or those of Chinese descent, who are often the victims of these crimes,” said Assistant Attorney General Matthew Olsen on March 16.
It is unclear if Xie’s crimes were related to any state-owned enterprises in China.