A U.S. Navy lieutenant based in Jacksonville, Florida, and his wife are among four people who face federal charges of attempting to illegally export seven inflatable, military-style boats and their outboard engines to China.
Federal agents arrested Fan Yang, 34, and his wife, Yang Yang, 33, along with Chinese nationals Ge Songtao, 49, and Zheng Yan, 27, on Oct. 17. They were charged Nov. 1 and remain in custody.
The four are charged with submitting false and misleading information pertaining to the export of the boats and engines in the U.S. Automated Export System (AES).
According to the indictment filed in the U.S. District Court for the Middle District of Florida, the defendants stated in their AES submission that the end user for the exports was Belt Consulting Co. Ltd. of Hong Kong, rather than the known end user, Shanghai Breeze in China.
“Where exporters make a mistake is stating in AES that the ship-to is in Hong Kong, but China is the ultimate country of destination,” said Paul DiVecchio, a 40-year export compliance consultant who reviewed the indictment. “In this case, it was an alleged cover-up.”
If convicted for conspiracy to submit false export information in AES, the four defendants each face up to five years in prison. They also each face a maximum of 10 years in federal prison for the attempted smuggling charge, the U.S. Justice Department said.
In addition, Fan Yang, Yang Yang and Ge Songtao are charged with conspiring to violate federal laws prohibiting foreign individuals in the U.S. on a nonimmigrant visa from possessing a firearm and prohibiting the transfer of a firearm to a nonresident.
Fan Yang has also been charged with making a false statement to a firearms dealer, which carries a maximum 10-year prison sentence, and for making false official statements in his application for a security clearance, which carries a maximum of five years in jail.
Since May 2015, Fan Yang and Yang Yang operated the business BQ Tree LLC in Florida. They worked with Ge Songtao and Zheng Yan from November 2016 to September 2019.
The FBI, the U.S. Naval Criminal Investigative Service, the U.S. Commerce Department’s Bureau of Industry and Security, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.