Two arrested in scheme to ship devices to China

WASHINGTON -- Federal agents have arrested two men for allegedly trying to ship sensitive military encryption devices to China.

"The technology that these individuals were attempting to export to China is among the most sensitive items on the U.S. munitions list," Allan Doody, the Customs special agent in charge in Baltimore told Reuters.

"The sale of these units is so tightly controlled that the National Security Agency must approve it."

The NSA, the Defense Department's super-secret agency, is responsible for much of the U.S. intelligence gathering worldwide.

Eugene You Tsai Hsu of Blue Springs, Missouri, and David Tzu Wvi Yang of Temple City, California, were accused of scheming to obtain the KIV-7HS encryption unit technology for shipment to China, according to an affidavit filed Tuesday in federal court.

The devices are used to secure classified communications and are designed for government use only.

They cannot be exported legally from the United States without an export license from the State Department, the Customs Service said in a statement.

Hsu, a naturalized U.S. citizen, and the Taiwanese-born Yang, were arrested Tuesday after a four-month investigation that began when Hsu allegedly contacted a Maryland company to ask about the cost of the technology.

A security officer at Mykotronx Inc. in Columbia, Maryland, alerted Customs agents in Baltimore, who set up an undercover operation, the statement said.

Charlson Ho, the alleged contact for the shipment, was affiliated with Wei Soon Loong Private LTD, a Singapore-based company, and identified as the buyer of the KIV-7HS units.

Yang confirmed August 24 to the Customs undercover agent that the units would be shipped from Los Angeles through Taipei to Singapore, where Ho then was to forward the units to China, the agency said.