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Department of Justice Logo 

U.S. Department of Justice

United States Attorney
Northern District of California

 

11th Floor, Federal Building
450 Golden Gate Avenue, Box 36055
San Francisco, California  94102

FOR IMMEDIATE RELEASE
 

 

Tel: (415) 436-7200
Fax: (415) 436-7234

 

June 3, 2004

The United States Attorney's Office for the Northern District of California announced that two South Bay individuals and a San Jose company, Night Vision Technology, were indicted late yesterday for illegally selling sophisticated night vision cameras internationally, including to China, in violation of various export control laws designed to prevent the sale of items with military applications to certain countries.

Philip Cheng, 57, of Cupertino, Martin Shih, 61, of San Jose, and a corporation operated by Mr. Shih, Night Vision Technology based in San Jose, were indicted late yesterday by a federal grand jury in San Jose on nine counts.  The defendants were charged with one count of conspiracy to violate the federal Arms Export Control Act and the International Traffic in Arms regulations, in violation of Title 18, United States Code Section 371; four counts of violating the Arms Export Control Act and International Traffic In Arms Regulations by exporting defense articles and furnishing defense services, and brokering the export of such items, in violation of Title 22, United States Code, Section 2778(b)(2); one count of violating export regulations of the United States, in violation of Title 50, United States Code, Section 1705(b); and three counts of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(b)(i). 

According to the indictment and other publicly filed documents in the case, Mr. Shih served as the president of Night Vision Technology.  The corporation designed, manufactured, and sold night vision cameras that use thermal imaging and infrared technology to permit the users of the cameras to "see" the images of other people or objects in the dark.  According to the charges, Mr. Shih exported the cameras and their components outside the United States.  The indictment further alleges that Mr. Cheng worked as a broker for the export of military and commercial technology between the United States and foreign countries, including China, conducting many of his export activities through a business he owned and operated called SPCTEK.

According to the indictment, between July 1, 1999 and June 17, 2003, the defendants exported defense articles and defense services without the licensing and authorization required by the Department of State.  The indictment specifically alleges that between 2000 and 2001, Mr. Shih, through Night Vision Technology, and Mr. Cheng sold a night vision infrared camera known as the "Panther I" to the North China Research Institute for Electro-Optics for approximately $65,000.  The indictment further alleges that in approximately June 2002, Mr. Shih traveled to China  for the purpose of furnishing instruction in the manufacture, use, and testing of night vision technology to customers in China.

On May 2, 2003, Martin Shih and Night Vision Technology concealed a night vision technology component known as a Panther II control box within another legal shipment and falsified the shipper's export declaration.  Mr. Cheng allegedly laundered the proceeds through wire transfers from Hong Kong to his Cupertino bank account. 

The maximum statutory penalty for the conspiracy count in violation of 18 U.S.C. Section 371 (Count One) is five years in prison and a $250,000 fine.  The maximum statutory penalty for the counts alleging violations of the Arms Export Control Act (Counts Two through Five) is ten years in prison and a $1 million fine.  The maximum statutory penalty for the count alleging the export regulation violation (Count Six) in violation of 50 U.S.C. Section 1705 is ten years in prison and a $250,000 fine.  The maximum statutory penalty for each violation of 18 U.S.C. § 1956(a)(1)(b)(i) is 20 years in prison and a $500,000 fine. 

However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed in the discretion of the Court.  An indictment simply contains allegations against an individual or corporation and, as with all defendants, Mr. Cheng, Mr. Shih, and Night Vision Technology must be presumed innocent unless and until convicted.

Mr. Cheng and Mr. Shin were previously arrested based on criminal complaints.  They have made their initial appearances in federal court in San Jose and were each released on $340,000 bail. The defendants' next scheduled appearance is at 2 p.m. on June 9, 2004 for arraignment on the indictment before Chief United States Magistrate Judge Patricia V. Trumbull. 

The prosecution is the result of an investigation by agents of the Department of Homeland Security, Immigration and Customs Enforcement, the Federal Bureau of Investigation, the Office of Export Enforcement, Department of Commerce, and the Internal Revenue Service, Criminal Investigation Division.  Jeffrey D. Nedrow is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Susan Kreider.  

A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.  Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts/gov.

All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415)436-7181.

mattmed