Chinese National Pleads Guilty to Trying to Obtain U.S. Military Equipment

Earlier today, Dingwei Chen, a 29-year-old citizen of the People's Republic of China, pleaded guilty in federal court in Salt Lake City to violating the Arms Export Control Act. U.S. District Judge David Sam accepted Chen's guilty plea and scheduled sentencing for Oct 19. Chen faces a maximum penalty of 20 years in prison.

Chen attempted to purchase military-grade satellite modems and radios manufactured for the U.S. military by American companies. The specific communications hardware Chen attempted to buy may not be legally exported from the United States without a license from the Department of State's Directorate of Defense Trade Controls, which generally does not issue licenses to export military goods and services to China.

"Chen tried to divert sensitive U.S. military technologies to the People's Republic of China, technologies the PRC could have used against us in the future," said Assistant Attorney General for National Security John A. Eisenberg. "These advanced technologies are a product of United States ingenuity and investment, and the National Security Division will act together with our partners across the government to enforce our laws to protect the military advantage bestowed by such technologies."

"Today's guilty plea underscores the serious consequences for those who attempt to illegally procure, export, or transfer sensitive U.S.-origin military equipment or technology in violation of our nation's export control laws," said Acting Special Agent in Charge Spiros Karabinas of U.S. Immigration and Customs Enforcement Homeland Security Investigations (HSI) New Jersey. "Protecting American innovation and preventing critical technologies from reaching foreign adversaries, terrorist organizations, and transnational criminal organizations is a core national security mission. This investigation reflects the exceptional collaboration between HSI offices across the United States and its territories and the Defense Criminal Investigative Service to disrupt an illicit procurement network and hold accountable those who threaten the security of the United States."

"Advanced communication systems - such as those increasingly sought after by adversaries for their sophisticated capabilities - are essential to protecting our warfighters and ensuring they can operate safely and decisively across modern battlespaces," said Director James R. Ives of the Defense Criminal Investigative Service (DCIS). "Safeguarding this technology is critical to the men and women who rely on these systems when protecting our nation. As the criminal investigative arm of the Department of Defense's Office of Inspector General, DCIS will aggressively pursue those who attempt to obtain and illegally export sensitive technology that could pose future risks to our troops and ensure they face justice."

According to court records, Chen worked with others in China to try and acquire these sensitive communications systems from foreign arms dealers on the black market. They discussed various methods to export them to China. Initially, Chen and his co-conspirators sought to transship the goods through Switzerland; then they spoke about picking them up in Saipan; finally, they decided to smuggle through Mexico.

After making an initial down payment of over $40,000 U.S. dollars, Chen and his co-conspirators switched to cryptocurrency, noting that "cold wallets are essentially anonymous bank accounts. Each transaction processed through them is private and untraceable." They went on to pay roughly $30,000 worth of USDT, which is a type of cryptocurrency. These down payments related to the purchase of 10 modems.

To avoid detection, Chen and his co-conspirators communicated using an encrypted app. Using the encrypted app, Chen claimed this was merely an initial deal, and he had funding to buy tens of millions of dollars' worth of additional military equipment.

Assistant Attorney General Eisenberg thanked the hardworking HSI and DCIS agents who investigated this case.

The case is being prosecuted by Trial Attorney Christopher Magnani of the National Security Division's Counterintelligence and Export Control Section.