Saipan eyed as pickup point in Chinese military tech scheme

A Chinese national who pleaded guilty to trying to obtain sensitive U.S. military communications equipment had at one point discussed Saipan as a possible pickup point for the hardware before the scheme shifted to Mexico, according to a press release from the U.S. Department of Justice.

Dingwei Chen, 29, a citizen of the People’s Republic of China, pleaded guilty in federal court in Salt Lake City, Utah 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.

According to court records cited by the DOJ, Chen worked with others in China to try to acquire sensitive communications systems from foreign arms dealers on the black market.

They first discussed shipping the equipment through Switzerland, then talked about picking it up on Saipan before ultimately deciding to smuggle it through Mexico.

The DOJ press release did not say why Saipan was considered as a pickup point, whether any of the equipment ever reached the CNMI, or whether anyone on Saipan was involved in the scheme.

Chen attempted to purchase military-grade satellite modems and radios manufactured for the U.S. military by American companies. The DOJ said the communications hardware cannot legally be exported from the United States without a license from the State Department’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,” Assistant Attorney General for National Security John A. Eisenberg said.

“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,” he added.

The DOJ said Chen and his co-conspirators made an initial down payment of more than $40,000 before switching to cryptocurrency.

They later paid roughly $30,000 worth of USDT, a type of cryptocurrency, toward the purchase of 10 modems.

Chen and his co-conspirators also used an encrypted app to communicate in an effort to avoid detection.

Using the app, Chen claimed the transaction was only an initial deal and that he had funding to buy tens of millions of dollars worth of additional military equipment, according to the DOJ.

“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 Spiros Karabinas, acting special agent in charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations New Jersey.

Karabinas said protecting American innovation and keeping critical technology from foreign adversaries and criminal organizations is a core national security mission.

Defense Criminal Investigative Service Director James R. Ives said safeguarding advanced communications technology is critical because U.S. military personnel rely on such systems in modern battlefields.

“Safeguarding this technology is critical to the men and women who rely on these systems when protecting our nation,” Ives said.

The case was investigated by Homeland Security Investigations and the Defense Criminal Investigative Service.

Trial Attorney Christopher Magnani of the DOJ National Security Division’s Counterintelligence and Export Control Section is prosecuting the case.