Yeng Ching Peng, Peter Liu

Economic / Industrial / Corporate Espionage Case

Name	PENG, Yen Ching aka Yen-Po Peng, aka Alex Peng	LIU, Peter aka Kang Tai Liu
Employer	UNU Engineering	United Airlines
Dates of Employment
Employee Type
Job Title/Duties	Mechanical Engineer	Flight Attendant
Military Rank
Clearance Level

Spying For	Taiwan	Taiwan
Codename
Spying Dates
Co-conspirators	Peter Liu, aka Kang Tai Liu	Yen Chig Peng, aka Yen-Po Peng, aka Alex Peng
Methodology	Peng then reverse engineered these items, which included (a) infrared laser aiming devices, which mount on military rifles and project on the rifle’s target a laser beam that is invisible to the naked eye but visible with the use of military night vision goggles; and (b) thermal weapon sights, which mount on military rifles and facilitate target acquisition and surveillance in low-light conditions by detecting and visually displaying heat sources.	Purchased stolen U.S. military equipment on e-Bay at the direction of Yen Ching Peng, a/k/a "Yen-Po Peng," a/k/a "Alex Peng.” Liu then shipped these items to Peng in Taiwan. Liu concealed the nature and value of these items by falsifying forms that he submitted to United States Customs and Border Protection and the United States Postal Service regarding the contents of the packages that he shipped to PENG.
Possible Motivations, Problems	It's unclear whether the allegations speak of attempted espionage or merely the efforts of a Taiwaenese man with a penchant for eBay bidding to expand a personal collection of military gadgetry.	Liu knew Mr. Peng only because he'd allowed Mr. Peng, for a fee of a few dollars, to use his eBay account to purchase various military gadgetry, which Liu would receive and send to Taiwan
Finances
Identified/ Investigation	The case grew out of a sting operation that began when Mr. Peng sent an e-mail message seeking help finding "special toys" to an address operated by undercover agents for the Immigration and Customs Enforcement. Over several months, the agents built their case by selling several rifle-mounted, infrared aiming devices and thermal sites to Mr. Peng and shipping them to Taiwan, according to court papers filed by the prosecution…On December 6, 2006, an undercover agent went to a Manhattan post office to deliver the jet helmet to Mr. Peng's emissary (Liu), a flight attendant for Continental Airlines, according to court papers. Items involved: (a) infrared laser aiming devices, which mount on military rifles and project on the rifle’s target a laser beam that is invisible to the naked eye but visible with the use of military night vision goggles; (b) thermal weapon sights, which mount on military rifles and facilitate target acquisition and surveillance in low-light conditions by detecting and visually displaying heat sources; and (c) a fighter pilot’s helmet (Joint Helmet Mounted Cueing System) and its associated technology, which permits a fighter pilot to accurately direct onboard weapons against enemy targets while performing high-G aircraft maneuvers. These items are manufactured for military use (primarily under contract with the Department of Defense) and law enforcement agencies, and are items listed on the United States Munitions List as items that cannot be exported without a license issued by the United States Department of State.
Arrest Date/Location	Liu was arrested 12 December 2007 in Manhattan Peng was arrested in Hong Kong December 2007
Charges	Peng: Charged him with conspiracy, four counts of exporting munitions without a license, six counts of money laundering, and three counts of export smuggling Liu: Conspiracy to commit export smuggling and four separate counts of export smuggling
Court	Manhattan Federal Court
Lawyers
Status	11 December 2007: Arrested in Hong Kong 16 August 2008: Extradited to New York City 18 August 2008: Pleaded not Guilty	15 April 2008: Pleaded Guilty 8 August 2008: Sentenced to 30 months in prison for smuggling United States military equipment to a co-conspirator in Taiwan. In addition to the prison term, Liu was sentenced to two years of supervised release.

Date/Place of Birth	Taiwan	1980, Taiwan
Citizenship	Taiwan	Naturalized US citizen
Residences	Taiwan	Queens, New York
Education
Family
Other Employment
Additional Bio

Documents	Peter Liu Sentenced to 30 Months in Prison for Smuggling U.S. Military Equipment to Taiwan (DOJ, press release, 8 August 2008) U.S. Announces Arrest in Hong Kong and New York in Conspiracy to Smuggle Military Equipment to Taiwan (DOD, press release, 11 December 2007)
Quotes
Case Links
BOOKS

News:

Taiwan arms suspect was "Top Gun" geek: NY lawyer

…Yen Ching Peng was extradited from Hong Kong and pleaded not guilty in New York on Monday to federal charges including conspiring to smuggle military equipment to Taiwan and money laundering. After a hearing on Tuesday, lawyer David Katz said Peng wanted the items only to sell to other "geeky collectors."… Prosecutors say Peng, a resident of Taiwan, "worked for a company enagaged in ... reverse-engineering technology, including miltary technology." The indictment said Peng sent payments of several thousand dollars to a U.S. undercover agent and requested the military equipment be exported without a license and the contents be falsely labeled as toys. He is not accused of seeking to copy the U.S. military devices. But the items are listed on the United States Munitions List, which requires exporters to obtain licenses and submit registrations, the indictment said. Katz said Peng is a mechanical engineer who worked at UNU Engineering in Taiwan. He faces a maximum sentence of up to 20 years on the money laundering charges alone……(Reuters, 19 Aug 08)

U.S. Fighter Pilot Helmet at Center of Sting Operation

...So far it's unclear whether the allegations speak of attempted espionage or merely the efforts of a Taiwaenese man with a penchant for eBay bidding to expand a personal collection of military gadgetry. Prosecutors have noted in court papers that the man, Yen Ching Peng (aka Yen-Po Peng, aka Alex Peng), works for a firm that reverse engineers military technology. But the charges he faces so far deal only with allegations that he sought to violate American export controls on military technology. He is not accused of attempting to reproduce any equipment…Mr. Peng was arrested in Hong Kong last year, extradited on Saturday, and arraigned yesterday in U.S. District Court in Manhattan. The case grew out of a sting operation that began when Mr. Peng sent an e-mail message seeking help finding "special toys" to an address operated by undercover agents for the Immigration and Customs Enforcement. Over several months, the agents built their case by selling several rifle-mounted, infrared aiming devices and thermal sites to Mr. Peng and shipping them to Taiwan, according to court papers filed by the prosecution…On December 6, 2006, an undercover agent went to a Manhattan post office to deliver the jet helmet to Mr. Peng's emissary, a flight attendant for Continental Airlines, according to court papers. The emissary, Peter Liu (aka Kang Tai Liu), knew Mr. Peng only because he'd allowed Mr. Peng, for a fee of a few dollars, to use his eBay account to purchase various military gadgetry, which Liu would receive and send to Taiwan, according to court papers. Liu was subsequently arrested before he had shipped the jet helmet. A Taiwanese-born American citizen from Queens, Liu was sentenced last week to 30 months in prison…..(New York Sun, 19 Aug 08)

Taiwanese man extradited to NY on smuggling charges

A Taiwanese man was extradited to New York on charges of attempting to smuggle military equipment from the United States to Taiwan, the U.S. Attorney's Office said on Monday. Yen Ching Peng, a resident of Taiwan, appeared in Manhattan federal court on Monday and was ordered to be detained by a federal magistrate judge after being extradited from Hong Kong on Saturday, the U.S. Attorney's Office in Manhattan said. Peng is accused of attempting to buy military equipment and technology from a U.S. undercover agent in New York between July 2006 and December 2007 that included infrared laser aiming devices and thermal weapons sights that are used on rifles, as well as a fighter pilot's helmet, according to his indictment. He was arrested in December in Hong Kong and faces charges including conspiring to smuggle military equipment to Taiwan and money laundering. He faces a maximum sentence of up to 20 years on the money laundering charges alone…Peng's alleged accomplice, Peter Liu, who was based in New York and worked as a flight attendant, pleaded guilty to smuggling charges and was sentenced to 30 months in prison in August. According to prosecutors, the helmet contained technology that allows a fighter pilot to direct weapons on board against enemies while performing complicated maneuvers.……(Reuters, 18 Aug 08)

Man accused in NY of smuggling military equipment

A Taiwanese man has been extradited to New York to face charges that he smuggled military equipment including infrared laser aiming devices for rifles and a fighter pilot helmet out of the United States to his country. Yen Ching Peng could face more than 20 years in prison if convicted. He was arrested in Hong Kong in December. He made a brief appearance in federal court in Manhattan on Monday...A New York man has pleaded guilty to smuggling charges in the case and has been sentenced to 2{ years in prison..…..(Newsday, 18 Aug 08)

NY man, Peter Liu, sentenced for sending military gear abroad

A U.S. citizen has been sentenced to 2 1/2 years in prison after he admitted to sending military equipment to Taiwan. Judge Robert Patterson Jr. sentenced Peter Liu Thursday in Manhattan. The 27-year-old Queens man had pleaded guilty in April. Liu has admitted that he conspired to commit export smuggling by buying stolen military equipment over the Internet. Authorities say Liu then shipped the items to Taiwan……(Newsday, 8 Aug 08)

U.S. Announces Arrest in Hong Kong and New York in Conspiracy to Smuggle Military Equipment to Taiwan

MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, SALVATORE DALESSANDRO, Special-Agent-In-Charge of the New York Field Office of the Department of Homeland Security’s United States Immigration and Customs Enforcement ("ICE"), and EDWARD T. BRADLEY, Special-Agent-In-Charge of the Northeast Field Office of the United States Defense Criminal Investigative Service ("DCIS"), today announced the arrests of YEN CHING PENG, a/k/a "Yen-Po Peng," a/k/a "Alex Peng," and PETER LIU, a/k/a "Kang Tai Liu," on charges relating to the smuggling of military equipment out of United States to Taiwan. According to the Complaints unsealed in Manhattan federal court:

PENG, a resident of Taiwan, solicited from an undercover agent a list of specified military equipment that PENG was interested in purchasing. Among the items on this list were (a) infrared laser aiming devices, which mount on military rifles and project on the rifle’s target a laser beam that is invisible to the naked eye but visible with the use of military night vision goggles; (b) thermal weapon sights, which mount on military rifles and facilitate target acquisition and surveillance in low-light conditions by detecting and visually displaying heat sources; and (c) a fighter pilot’s helmet and its associated technology, which permits a fighter pilot to accurately direct onboard weapons against enemy targets while performing high-G aircraft maneuvers.......(DOJ, 11 Dec 07)