Chicago case alleges ties to North KoreaBy MICHAEL TARM , Associated Press
May. 6, 2013 8:12 PM ET
CHICAGO (AP) — A Taiwanese businessman long suspected of ties to North Korea and his Illinois-based son have been charged in Chicago with seeking to bypass a U.S. ban on the export of weapons machinery to the hard-line communist nation, federal prosecutors announced Monday.
Hsien Tai Tsai, 67, and his 36-year-old son, Yueh-Hsun Tsai, are charged with one count each of conspiracy to defraud the U.S. in its enforcement of laws prohibiting the proliferation of weapons of mass destruction, a statement from the U.S. Attorney's Office in Chicago said.
The statement suggests a wider investigation.
Federal agents have been investigating the two Tsais and a network of companies on suspicion of trying to export goods and machinery from the U.S. "that could be used to produce weapons of mass destruction," it said.
The father, who lives in Taiwan, was arrested on Wednesday in Tallinn, the capital of the Baltic Sea-coast nation of Estonia. The statement from prosecutors doesn't speculate about why Hsien Tsai was in Estonia, though it says U.S. authorities are seeking his extradition. The son, a legal U.S. resident, was arrested on the same day last week at his home in suburban Glenview, just outside Chicago, according to prosecutors.
The arrest comes as North Korea, under the leadership of Kim Jong Un, has faced international criticism over its nuclear and weapons-development programs. The federal complaint released Monday doesn't offer details about which weapons systems the machinery could have benefited.
The elder Tsai, who also goes by Alex Tsai, fell under suspicion of U.S. authorities at least as far back as 2008, when he was convicted in Taiwan of forging shipping invoices and illegally shipping restricted materials to North Korea, the U.S. Department of Treasury said in press release at the time.
Treasury officials accused him of shipping items to North Korea that could be used to support its advanced weapons program, and the department in 2009 placed a wide-ranging prohibition on him doing any business in or with the United States. The ban applied to him and several Taiwanese-based companies he helped run, including Trans Merits Co. Ltd. and Trans Multi Mechanics Co. Ltd., the complaint says.
It was the alleged bid to skirt the 2009 prohibition, with the son's alleged help, that led to the charges in Chicago. Among the items they allegedly conspired to export was what prosecutors described as "a Bryant center hole grinder," which is used to drill precise, smooth holes through elongated metal, the compliant says. The machinery got to Taiwan, but the complaint doesn't indicate if it might have reached North Korea.
Yueh-Hsun Tsai, who also goes by Gary Tsai, appeared in a federal courtroom in Chicago on Monday. Magistrate Judge Susan Cox agreed to his release on $500,000 bond. He will be confined to his home and will be under electronic monitoring.
Speaking to reporters later on Monday, the younger Tsai's attorney insisted the machinery involved was "unsophisticated."
"And there is no allegation Mr. (Yueh-Hsun) Tsai knew it was destined for North Korea," the attorney, Ted Poulos, said. He added about the business deals involved, "It amounts to a rather benign business transaction."
In addition to the count of conspiracy to defraud U.S. proliferation laws, the father and son each face one count of conspiracy to violate the International Emergency Economic Powers Act and one count of money laundering. The count of conspiracy to defraud the U.S. carries a maximum five-year prison sentence, while violating the economic powers act and money laundering each carries a maximum 20-year term.
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