By: Danielle Hatch
Yi-Chi Shih, a 64 year old part-time Los Angeles resident, was found guilty on June 26, 2019 to violating the International Emergency Economic Powers Act (IEEPA), mail fraud, wire fraud, subscribing to a false tax return, making false statements to a government agency, and conspiracy to gain unauthorized access to a protected computer.
According to trial documents, Shih worked with Kiet Ahn Mai (co-defendant), a 65-year-old Pasadena resident, to first obtain access to a protected computer of a US company (unnamed) that manufactures wide-band, high-power semiconductor chips known as monolithic microwave integrated circuits (MMICs). Mai posed as a domestic customer looking to obtain custom-designed MMICs that would only be used in the US. Once Mai obtained access to the company’s web portal, Shih was able to access the US companies proprietary, export-controlled items, including its design services for MMICs. This company’s semiconductor chips have several commercial and military applications and a license from the Commerce Department would be required to export them to China.
Shih was the President of Chengdu GaStone Technology Company (CGTC), a Chinese company that was in the process of building a MMIC manufacturing facility in China. The company was placed on the Entity List by the Commerce Department in 2014 “due to it’s involvement in activities contrary to the national security and foreign policy interest of the United States – specifically, that it had been involved in the illicit procurement of commodities and items for unauthorized military end use in China.”
Shih also controlled a California-based company, Pullman Lane Productions, LLC, which was used to funnel funds from Chinese entities to pay for the manufacturing of the MMICs by the unnamed US company. Pullman Lane Productions, LLC received funds from a Beijing-based company that had also been placed on the Entity List the same day as Shih’s company, CGTC for “it’s involvement in activities contrary to the national security of the US.”
Both Shih and Mai were indicted in January 2018. Shih’s co-conspirator, Mai, pleaded guilty to one county of smuggling and faces a maximum sentence of ten years in prison (sentencing scheduled for September 2019). Shih faces a maximum sentence of 219 years in prison (sentencing not yet scheduled).