Chinese National Sentenced To More Than Three Years In Federal Prison For Attempting To Export Maritime Raiding Craft And Engines To China Illegally

At the sentencing hearing, Judge Schlesinger found that Ge Songtao intended to buy the engines in order to reverse-engineer them and supply his own version to the Chinese military. In addition, the judge found that, after being charged in this case, Ge Songtao attempted to obstruct the proceedings in multiple ways, including soliciting an associate in China to help him manufacture false documents for use in court.

Ge Songtao had pleaded guilty on November 2, 2020. 

According to court documents, Ge Songtao was the chairman of Shanghai Breeze Technology Co. Ltd., a company headquartered in Shanghai, China.  Beginning in 2018, Ge Songtao was interested in identifying a source of supply of U.S.-manufactured combat rubber raiding craft equipped with engines that could operate using gasoline, diesel fuel, or jet fuel. These vessels and multi-fuel engines are used by the U.S. military and can be operated after being launched from a submerged submarine or dropped into the ocean by an aircraft. No comparable engine is manufactured in China.

One of Ge Songtao’s U.S.-based employees, co-defendant Yang Yang, attempted to order seven of the raiding craft equipped with these engines from a U.S. manufacturer. When the U.S. manufacturer suggested that Yang Yang purchase cheaper gasoline-fueled engines, she insisted that she wanted to purchase the military-model multi-fuel engines. To induce the manufacturer to sell this equipment, Yang falsely represented that her customer was an entity called United Vision Limited in Hong Kong, rather than Shanghai Breeze Technology Co. in Shanghai.  One of Yang’s Chinese co-workers had told her that American manufacturers would be more likely to sell to an entity in Hong Kong rather than one in mainland China.  By misrepresenting what company was buying the equipment, and where it was located, Yang caused the entry of false information in the Department of Commerce’s Automated Export System in violation of federal law.

To facilitate the purchase of the raiding craft and engines, Ge Songtao arranged for wire transfers to a separate company in Hong Kong, Belt Consulting Company Limited, which in turn wired $114,834.27 to the U.S. manufacturer. He also coordinated plans to send an employee to Hong Kong to receive the raiding craft and engines and transship them to mainland China. The plot failed and authorities arrested Ge Songtao and his co-defendants before the raiding craft and engines were shipped overseas. 

On September 15, 2020, Yang Yang pleaded guilty to the same two charges to which Ge Songtao has pleaded guilty, and on December 9, 2020, was sentenced to a time-served sentence or the equivalent of approximately 14 months’ imprisonment.  On August 13, 2020, co-defendant Zheng Yan pleaded guilty to conspiring to submit false export information and to export the raiding craft and engines fraudulently, in violation of U.S. law, and on March 31, 2021, was sentenced to a time-served sentence or the equivalent of approximately 6 months’ imprisonment and 11 months’ home-detention. The trial of remaining co-defendant, Fan Yang, is scheduled to begin on August 2, 2021.

“The illegal exportation of sensitive technology poses a clear, significant threat to our national security,” said Brian Dugan, Special Agent in Charge of the FBI Norfolk Division. “This case proves that the FBI and our law enforcement partners are fully dedicated to preventing the theft of vital technologies, no matter how challenging the work. We will continue to stand up for innovators who create products that protect American lives, and bring to justice anyone who attempts to circumvent the laws that protect these technologies.”

“Ge Songtao deserves to be held fully accountable for his attempts to illegally acquire sensitive U.S. technology that ultimately threatened the operational readiness and safety of our nation’s military,” said Special Agent in Charge Thomas Cannizzo of the NCIS Southeast Field Office. “This sentencing should serve as a warning that NCIS and our law enforcement partners remain committed to rooting out any and all criminal attempts to compromise our nation’s critical technologies and infrastructure. We sincerely thank our partners for their substantial efforts during this investigation to preserve U.S. warfighter superiority.”

“Special Agents of the Bureau of Industry and Security’s Office of Export Enforcement (OEE) are dedicated to ensuring that individuals and companies of concern do not attempt to unlawfully undermine our military’s qualitative technological edge by circumventing applicable export controls,” said Ariel Joshua Leinwand, Special Agent in Charge of OEE’s Miami Field Office. “This significant sentencing represents the results of an intensive and collaborative approach with our law enforcement partners to vigorously enforce our nation’s export control laws.”      

“ATF will continue to support our federal partners and provide our firearms expertise in order to protect national security,” said ATF Special Agent in Charge Craig W. Saier.          

This case was investigated by the FBI, the U.S. Naval Criminal Investigative Service, the U.S. Department of Commerce – Bureau of Industry and Security, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Michael J. Coolican and Heather Schmidt, Senior Trial Attorney, Counterintelligence and Export Section, U.S. Department of Justice.