Chih-Kwang Hwa, Navy Export Violations and Wire Fraud, Washington, …

SEATTLE – A scheme to rip off the U.S. Navy and funnel sensitive military technology overseas ended with guilty pleas today in federal court. CHIH-KWANG HWA, owner of PRECISION IMAGE CORPORATION in Woodinville, Washington, admitted to violating the Arms Export Control Act and committing wire fraud, trading American security for cheap labor.

HWA’s company secured $180,034 in contracts between 2009 and 2011 to supply critical circuit boards to the Navy. The catch? He lied. Instead of manufacturing the boards domestically as promised – and as required for the contracts – HWA illegally shipped technical specifications to a manufacturer in Taiwan. This wasn’t a simple cost-cutting measure; it was a direct breach of U.S. export regulations, specifically the International Traffic in Arms Regulations, and a betrayal of the trust placed in him by the Department of Defense.

According to court documents, the Navy provided PRECISION IMAGE with technical data containing classified specifications. This data, listed on the United States Munitions List, was legally restricted from leaving the country without a license from the U.S. State Department. HWA knew this, yet brazenly transmitted the information anyway, culminating in the delivery of Taiwanese-made circuit boards back to the Navy in September 2011. He falsely claimed the boards were “Made in the USA” to secure the contracts, a blatant act of deception.

“Our national security depends upon protecting our military systems and their specifications,” stated U.S. Attorney Jenny A. Durkan. “Going ‘on the cheap,’ gave this defendant an unfair advantage over other suppliers and risked our security. Protecting our military technical data and enforcing our export restrictions are critical priorities of the U.S. Attorney’s Office.” Brad Bench, special agent in charge of HSI Seattle, added, “U.S. export controls are in place to keep sensitive technology from falling into the hands of our nation’s enemies.”

Under the terms of a plea agreement, prosecutors will recommend a $300,000 fine for PRECISION IMAGE CORPORATION and a prison sentence of 15-21 months for CHIH-KWANG HWA. However, U.S. District Judge James L. Robart isn’t bound by the recommendation and will hand down the final sentence on October 28, 2013. HWA faces a maximum of 20 years behind bars. The case was a joint investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Naval Criminal Investigative Service, prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods.

This case serves as a stark reminder that profiting from deceit at the expense of national security will not be tolerated. The Grimy Times will continue to follow this case and report on the sentencing of HWA and the fate of PRECISION IMAGE CORPORATION. For press inquiries, contact Emily Langlie at (206) 553-4110 or Emily.Langlie@usdoj.gov.