Chinese Nationals Are Set to Enter Pleas in U.S. Microchip Smuggling Case

Two Chinese executives accused of attempting to obtain radiation-hardened microchips used in the military and aerospace industries are set to plea tomorrow to U.S. export violations, according to a federal court docket.

Hong Wei Xian, also known as Harry Zan, 32, and Li Li, also known as Lea Li, 33, were charged by a grand jury in Alexandria, Virginia, last year with conspiring to violate the Arms Export Control Act and to smuggle goods from the U.S., and the attempted export of munitions in violation of the act.

Xian is president and Li is vice president of Beijing Starcreates Space Science & Technology Development Co., which imports and sells programmable read-only memory microchips to China Aerospace Science & Technology Corp., according to an April 4 statement from the Justice Department. The latter company is controlled by the government of China, according to the statement.

The two were arrested in Hungary in September and transferred to the custody of U.S. marshals on April 1, according to the statement. The conspiracy charge carries a maximum five-year prison term and the export violation carries a penalty of as long as 20 years in prison, the U.S. said.

‘Change of Plea’

Xian and Li pleaded not guilty to the charges on April 7. The court’s docket notes they will appear before U.S. District Judge Gerald Bruce Lee for a “change of plea” hearing tomorrow.

Peter Carr, a spokesman for U.S. Attorney Neil MacBride in Alexandria, declined to comment.

Xian’s lawyer, John Rowley of Baker & McKenzie in Washington, declined to comment. Li’s lawyers, Alan Yamamoto and Harry Dennis, did not immediately return telephone messages seeking comment.

The U.S. has had an embargo against China since 1990 prohibiting the export of defense articles to the country, according to the statement.

The case is U.S. v. Xian, 10-cr-00207, U.S. District Court, Eastern District of Virginia (Alexandria).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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