California Man Faces 20 Years in Prison for Illegal Export After Seller Digs Deeper on End-Use

A California man was recently arrested for illegally exporting cesium atomic clocks to Hong Kong without obtaining the required Bureau of Industry and Security License, the Massachusetts U.S. Attorney’s Office said in a June 27 press release. Alex Yun Cheong Yue allegedly bought the clock from a U.S. reseller by misrepresenting its end-use, and was attempting to buy another clock when the reseller requested to tour Yue’s non-existent California facility to verify the end-use, causing Yue to abort his plans to export a second clock.

According to an indictment unsealed June 27, Yue worked with a Hong Kong man, Wai Kay Victor Zee, to procure the atomic clocks from the U.S. seller and export them to Zee’s company in Hong Kong, Premium Tech Systems. Cesium atomic clocks are used in global positioning system solutions, network timing protocols, encryption programs, and national defense and space applications. They are controlled on the Commerce Control List for national security and anti-terrorism reasons.

Yue allegedly made up a fictitious company, Ecycle Tech International, to buy the clocks from the U.S. seller, and told the seller that the clocks would be used only in the U.S. for cordless phone research and development, the press release said. The seller shipped the clocks to Yue, who three days later exported them to Hong Kong. Zee then confirmed receipt.

Almost two years later, Yue allegedly tried to buy another clock from the same seller. This time, the seller requested an end-user statement detailing where and how the clocks would be used. Yue sent an end-user certificate saying that the clock would be used in a calibration lab, and told the seller that the clock would not be exported. After the seller requested to visit the California facility where the atomic clock would purportedly be used, Yue canceled the order and refunded the payment he had already received from Zee.

Yue is charged with one count of conspiracy to commit export violations, two counts of unlawful exports and attempted exports, and one count of smuggling. Zee and Premium Tech Systems were also charged, but remain at large in Hong Kong, the release said. Zee faces a maximum sentence of 20 years in prison and a $1 million fine for the alleged export violations.