Taiwanese Father and Son Charged with Violating Weapons of Mass Destruction Sanctions
A Taiwanese father and his Chicago-dwelling son were charged with allegedly conspiring to violate U.S. sanctions preventing the proliferation of weapons of mass destruction, as well as circumventing Treasury Department sanctions, the Bureau of Industry and Security announced May 6. Hsien Tai Tsai, also known as Alex Tsai, and Yueh-Hsun Tsai, also known as Gary Tsai, were charged in U.S. District Court in Chicago with three counts each of conspiring to defraud the U.S. in its enforcement of laws and regulations prohibiting weapons of mass destruction proliferation, conspiracy to violate the International Emergency Economic Powers Act and money laundering.
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Alex Tsai, 67, a Taiwanese citizen, was arrested May 1 in Estonia and remains there pending extradition to the U.S., BIS said. Gary Tsai, 36, lives in Glenview, a suburb of Chicago. He holds Taiwanese citizenship and is a permanent resident alien of the U.S., according to the complaint. The complaint charges Alex, Gary and a third Taiwanese associate of Alex called Individual A with purchasing and exporting -- or attempting to -- “machinery used to fabricate metals and other materials with a high degree of precision.” To do this the trio relied on three companies: Global Interface Company, Trans Merits Co. and Trans Multi Mechanics Co.
Alex Tsai was designated a proliferator of weapons of mass destruction by the Treasury Department in 2009. The Department said he supplied goods with “weapons production capabilities” to the Korea Mining Development Trading Corporation, which was designated a proliferator in 2005. Tsai was also involved in shipping items to North Korea that could be used for the country’s advanced weapons program, Treasury said. The designation prevented Tsai, Global Interchange and Trans Merits from participating in U.S. financial and commercial systems, and prohibited any U.S. person or company from knowingly doing business with them.
But the ruling did not prevent Tsai -- along with Gary and Individual A -- from doing business, according to BIS. The trio allegedly attempted to hide the involvement of Alex and Trans Merit by using different company names, including Trans Multi Mechanics. In September 2009, for example, they purchased a Bryant center hole grinder from a Chicago company, exporting it to Taiwan under the guise of Trans Multi Mechanics, the complaint said. The Bryant is a machine tool used to grind a center hole with precisely smooth sides through the length of a material, BIS said. That same month, Gary Tsai started a company called Factory Direct Machine Tools, which imported and exported tools, parts and items to and from the U.S., the complaint said. Alex Tsai and Trans Merits were active partners in Gary’s company: they even helped to import goods for Factory Direct customers, the complaint said.
Violating IEEPA carries a maximum penalty of 20 years in prison and a $1 million fine. Money laundering also carries a maximum penalty of 20 years in prison and a $500,000 fine. Conspiracy to defraud the U.S. carries a maximum penalty of five years in prison and a $250,000 fine.