A federal appeals court has upheld most counts against two Chinese nationals convicted of breaking U.S. laws concerning overseas shipment of weapons-grade technologies. But it reversed two counts each for exporting items restricted under the U.S. Munitions List, and remanded the cases for resentencing on all counts.
On Tuesday in a joint ruling, the U.S. Court of Appeals for the First Circuit upheld 15 counts and vacated two against Zhen Wu and upheld 11 and vacated two against Yufeng Wei. The court overturned the two counts for each defendant due to faulty jury instructions. The U.S. Munitions List covers categories of "defense articles" that require export licenses.
The appeals court vacated Wu's 36-month sentence and Wei's 97-month sentence, remanding both cases for resentencing.
From 1996 until 2008, Wu and Wei -- who were married between 1988 and 1999 -- shipped tens of millions of dollars worth of electronic components from the United States to China.
In 1996, Wu opened an electronic-parts broker, Chitron Electronics Co. Ltd., in China and a Massachusetts purchasing office for the company. In 1998, the Massachusetts office became Chitron Electronics Inc., and Wu continued to run it.
The U.S. entity bought parts from U.S. vendors and shipped them to Chitron's customers in China. The company initially shipped parts to freight forwarders in Hong Kong and then to its own Hong Kong branch office starting in 2005.
The pair falsely indicated on various documents that the parts' final destination was Hong Kong, or they prompted employees to do so.
After a 23-day jury trial, the pair were convicted on counts including exporting without a license, conspiracy and making false export declarations, in addition to the Munitions List counts. Chief Judge Patti Saris of the District of Massachusetts sentenced both defendants in January 2011.
Chief Judge Sandra Lynch wrote the opinion in U.S. v. Wu and U.S. v. Wei, joined by Senior Judge Bruce Selya and retired U.S. Supreme Court Justice David Souter, who heard the case by designation.
The jury instruction issue concerned the jury's role in deciding whether phase shifters, small complex microchips that the two defendants exported, were on the Munitions List at the relevant time.