2 charged in NJ in military tech smuggling scheme

Apr 25, 2012, 7:58 PM

Associated Press

NEWARK, N.J. (AP) – Two Taiwanese nationals asked undercover federal agents for military hardware and technology, including a drone, so they could sell it to clients in China, authorities said in announcing new charges against the pair, who already are accused of smuggling methamphetamine into the U.S.

Hui Sheng Shen, nicknamed “Charlie,” and Huan Ling Chang, also known as “Alice,” faced new charges Wednesday in what federal authorities depicted as a brazen plot to smuggle military technology out of the U.S.

Both appeared in federal court in Newark but didn’t enter pleas. They face up to five years for violating arms export laws and up to life in prison for two drug counts.

Their attorneys declined to comment.

According to the complaint, Shen and Chang first broached the idea of smuggling military technology in September, just before they were to meet the agents in Las Vegas to discuss future narcotics deals.

The two were caught on tape referring to clients connected to the Chinese government who were interested in a range of military items that included unmanned aerial vehicles, stealth technology and anti-aircraft systems, federal prosecutors said.

“The people we met, they come from Beijing. … They work for Beijing government … some kind of intelligence company for Chinese government _ like C.I.A,” Shen allegedly told undercover agents. “They are spies,” he added in the same conversation.

U.S. Attorney Paul Fishman said his office is prosecuting several cases involving the attempted export of military or corporate trade secrets to China and that there have been dozens of similar cases nationwide over the last four or five years.

“China has been particularly aggressive in trying to obtain military technology, corporate secrets, classified information and trade secrets through a wide variety of tactics,” he said. “Because the U.S. is such a global leader in producing this type of technology, we are a target.”

Shen told the agents he could use techniques learned in the narcotics trade to smuggle the items out of the Port Newark-Elizabeth Marine Terminal, such as using scuba divers to carry parts of one of the drones to a ship docked offshore, according to a criminal complaint.

The two allegedly referred to an E-2 Hawkeye early warning aircraft they coveted as “the big toy.”

The undercover agents repeatedly cautioned about the risk involved in smuggling the items, with one of them even telling the pair at one point, “I would prefer not to make money on something that would hurt the United States.”

Shen allegedly replied, “I think that all items would hurt America.”

Shen and Chang were arrested in late February and initially charged with narcotics smuggling. They have been held without bail in New Jersey since then, and haven’t entered a plea in that case, according to federal court records.

Their February arrest arose from an investigation into counterfeit UGG boots, handbags and other items being smuggled into the New Jersey port, which resulted in the arrests of more than two dozen others.

The FBI had been investigating Shen and Chang for a year, but the wider investigation dated back to 2008 when an informant put authorities in touch with Soon Ah Kow. Kow, accused of being a major player in the counterfeit goods ring and also accused of smuggling methamphetamine, introduced agents to Shen and Chang in Manila, Philippines, in February 2011.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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2 charged in NJ in military tech smuggling scheme