May 7 (Bloomberg) -- A Taiwanese man with ties to North Korea who the U.S. called a proliferator of weapons of mass destruction in 2009 and his Chicago-area son were charged with trying to evade federal laws curbing the spread of such weapons, prosecutors said.
Hsien Tai Tsai, 67, also known as “Alex,” was arrested May 1 in Tallinn, Estonia, while his son, Yueh-Hsun “Gary” Tsai, 36, was apprehended the same day in suburban Glenview, Illinois, acting Chicago U.S. Attorney Gary Shapiro said in a statement yesterday.
The U.S. has linked Alex Tsai to “the supply of weapons machinery to North Korea,” Shapiro said in a statement issued jointly with Cory B. Nelson, special agent in charge of the Chicago office of the Federal Bureau of Investigation.
Father and son are accused of conspiracy to defraud U.S. enforcement of laws against the spread of WMD, conspiracy to violate the International Emergency Economic Powers Act by trying to dodge earlier restrictions placed on Alex Tsai and two of his Taiwan-based businesses, and money laundering.
The younger Tsai made his initial court appearance yesterday before U.S. Magistrate Judge Susan Cox in Chicago federal court. She conditioned his release upon the posting of a $500,000 bond backed by the Glenview home he shares with his wife and about $90,000 to be deposited with the court.
Cox ordered Gary Tsai confined to his home with electronic monitoring, allowing him to leave only for appointments with his lawyer or doctor and religious observance. The government is holding his passport.
His next court appearance is scheduled for May 28.
“The charges are that a son was assisting his father,” defense attorney Theodore Poulos told reporters after the hearing. That alleged assistance came in the form of purchasing old “unsophisticated” machinery used for drilling holes in metal and shipping it to his father, the attorney said.
Poulos called it “a benign business transaction.”
Alex Tsai and one of his Taiwanese businesses, Trans Merits Co., were charged and later convicted in that country for forging invoices and shipping restricted materials to North Korea, FBI Special Agent Eric Shiffman said in an affidavit for a complaint filed against Tsai.
The U.S. Treasury Department’s Office of Foreign Assets Control designated the father, Trans Merits and another company, Global Interface Co., as “proliferators of weapons of mass destruction” which bars any U.S. citizen, business or person or company in the country from doing business with Alex Tsai, Trans Merits or Global, according to Shiffman’s affidavit.
From 2009 to 2010, Gary Tsai allegedly plotted to buy and export for Trans Merits or Alex Tsai a Bryant Center Hole Grinder -- “a machine used to grind a center hole, with precisely smooth sides,” according to the affidavit by FBI Agent Joseph Hugdahl filed with the complaint against the son.
The younger Tsai allegedly gave an employee of the company from whom he was buying the center hole grinder a business card indicating he worked for Trans Merits, according to Hugdahl.
Gary Tsai is also accused of being partners with his father and Trans Merits in a business called Factory Direct Machine Tools, which imported goods to the U.S., Hugdahl said.
The crime of violating the International Emergency Economic Powers Act carries a maximum penalty of 20 years in prison and a $1 million fine, the government said. Money laundering is punishable by as long as 20 years in prison. Conspiracy to defraud the U.S. carries a sentence of as long as five years and a fine of $250,000.
The son’s case is U.S. v. Tsai, 13-cr-00325, U.S. District Court, Northern District of Illinois (Chicago).
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