On Tuesday, November 26th, the US Department of Justice announced that the founder and CEO of an international logistics and freight forwarding company has pleaded guilty to violating export laws by shipping goods to sanctioned Chinese companies.
According to a statement from the US Department of Justice, 77-year-old Richard Shih, whose company is based in California with an office in Grapevine, Texas, has admitted to the charges.
Reports from United Press International (UPI) indicate that Richard Shih is the president of Express Line Corporation, a freight company that has been in operation for nearly 40 years, located in Inglewood, California, with offices in Grapevine and other locations worldwide.
The Department of Justice stated that in September 2018, Chinese freight agency Seajet and its co-owners were added to the US entity list for illegally acquiring goods from the US and shipping them to North Korea. In June 2021, Seajet’s alias company, Hisiang, was also added to the entity list.
Exporting goods to entities and individuals on the entity list is prohibited without special permits. Despite this, from September 2018 to May 2022, Richard Shih and his company continued to trade with Seajet and Hisiang, sending over 1,000 batches of goods.
During this period, Seajet’s co-owners, along with their affiliates including Hisiang, transferred 34 international wire transfers to Richard Shih’s company account. These funds were used to cover various transaction costs such as air freight and truck transport companies, while retaining some funds as profits.
The Department of Justice emphasized that Richard Shih and his company were aware that Seajet and its co-owners were on the entity list, knowing that Hisiang was an alias for Seajet.
Evidence presented in the statement includes an email from Seajet informing Richard Shih that the company had changed its name to Hisiang for international business operations, but that the “company address, structure, and policies remained unchanged”.
Subsequently, Richard Shih forwarded this email to ten of his employees, while also cc’ing Seajet’s co-owners and several Seajet employees.
Furthermore, federal officials repeatedly explained to Richard Shih’s company about the entity list and relevant laws. In December 2018, after Seajet and its co-owners were sanctioned by the US, a US Department of Commerce Bureau of Industry and Security (BIS) official visited Richard Shih’s company to discuss the ban on exporting goods to Seajet.
However, records from the company showed that they started using the account code assigned to Seajet to ship goods to Hisiang. In November 2020, another BIS official contacted Richard Shih’s company and received a list of foreign individuals and companies that the company would not do business with, which did not include Seajet, its co-owners, or Hisiang.
Richard Shih has admitted to conspiring to violate the Export Control Reform Act, specifically section 371 of the US Code, which carries a maximum penalty of five years in federal prison.
The sentence for Richard Shih will be determined by a federal district court judge after considering the US Sentencing Guidelines and other statutory factors.