Woman Sentenced to One Year in Prison in Connection with PPG/Huaxing Illegal Export Scheme
Xun Wang, a former Managing Director of PPG Paints Trading (Shanghai) Co., a wholly-owned Chinese subsidiary of United States-based PPG Industries, was sentenced Dec. 20 to a year in prison for conspiring to violate the International Emergency Economic Powers Act, said the Department of Justice. In addition to the prison time, Judge Sullivan ordered Wang to pay a $100,000 fine and to perform 500 hours of community service.
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Wang pled guilty to the conspiracy in November 2011, and agreed, as part of her plea, to cooperate with the government’s investigation, DOJ said. Her cooperation led to the Dec. 3, 2012, guilty plea by the China Nuclear Industry Huaxing Construction Co. That plea is believed to have marked the first time that a Chinese corporate entity has entered a plea of guilty in a U.S. criminal export matter, DOJ said. As part of its plea agreement, Huaxing agreed to the maximum criminal fine of $2 million, $1 million of which will be stayed pending its successful completion of five years of corporate probation.
(See ITT’s Online Archives 12120505 for summary of Huaxing’s guilty plea.)
In November 2011, Wang also settled an administrative proceeding brought by the Bureau of Industry and Security on the same subject matter as her criminal case, DOJ said. As part of her settlement agreement, Wang agreed to pay a civil penalty of $200,000, with another $50,000 payment suspended, and to be placed on the BIS Denied Persons’ list for a period of five years with an additional five years suspended.
In both the criminal and administrative cases, Wang is accused of conspiring to export, reexport, and transship high-performance epoxy coatings to the Chashma II Nuclear Power Plant in Pakistan, a nuclear reactor owned and/or operated by the Pakistan Atomic Energy Commission, which has been on the BIS Entity List since Pakistan’s first successful detonation of a nuclear device in 1998, DOJ said.
Wang’s conviction is related to the Dec. 21, 2010, guilty plea of PPG Paints, DOJ said. Together, PPG Paints Trading and its parent company, PPG Industries, paid $3.75 million in criminal and administrative fines and more than $32,000 in restitution. The combined amount of criminal and civil fines represented one of the largest monetary penalties for export violations in the history of the BIS.
According to Wang’s plea documents, in January 2006, PPG Industries sought an export license for the shipments of coatings to Chashma II. In June 2006, BIS denied that license application. Following that denial, Wang and her co-conspirators agreed upon a scheme to export, reexport and transship PPG Industries’ high-performance epoxy coatings from the U.S. to Chashma II, via a third-party distributor in China, without first having obtained the required BIS export license, said DOJ.
The plea documents further allege that from around June 2006 through around March 2007, Wang and her co-conspirators intentionally concealed from PPG Industries that the coatings would continue to be delivered to Chashma II, DOJ said. Further, members of the conspiracy said that the coatings were to be used at a nuclear power plant in China, the export of goods to which did not require a license from BIS, it said. Wang and her co-conspirators allegedly exported three shipments of coatings from the U.S. to Chashma II, DOJ said.