U.S. Navy Officer faces 25 years’ imprisonment for Smuggling Military Engines to China

A U.S. Navy officer, his wife and two Chinese nationals could face up to 25 years’ imprisonment and $1 million in fines if found guilty in charges against them.

Federal prosecutors have charged them for conspiring to violate U.S. export restrictions on military equipment in order to deliver specialized outboards to a Chinese company.

Lt. Fan Yang, a naturalized U.S. citizen born in China, allegedly worked with his wife Yang Yang to purchase eight military-rated Evinrude MFE multi-fuel outboard engines and seven inflatable boats on behalf of a Chinese buyer, Shanghai Breeze Technology Co. Ltd.

The arrangement allegedly used a false company name and shipping address in Hong Kong rather than mainland China to place the order with the U.S. manufacturer of the goods, and the wire transfer for payment was allegedly made from Hong Kong in order to conceal the true origin of the funds.

The chairman of Shanghai Breeze, Ge Songtao, and Ge’s assistant Zheng Yan have also been charged and are in custody.

All four have entered pleas of not guilty.

Lt. Yang and Yang Yang face additional charges related to the alleged procurement and unlicensed transfer of a firearm to Ge Songtao, who is a non-citizen and was visiting the U.S. on a non-resident visa.

In addition, Lt. Yang faces charges of falsifying security clearance documents: he allegedly wrote on his e-QIP clearance application that he was not employed by a foreign business and did not have any substantial foreign contacts, despite his side business and his alleged relationship with Shanghai Breeze.

The Evinrude MFE is a 55 / 30 horsepower submersible outboard intended for use with a small inflatable dinghy, like the small portable craft used by special forces teams for amphibious operations.

It can run on a wide range of fuel, including gasoline, jet fuel, kerosene and (in an emergency) diesel.