A Taiwanese man with ties to North Korea used shell companies set up by his son to smuggle machinery that can be used to make weapons of mass destruction out of the United States, prosecutors said on Monday.
Alex Tsai Hsien-tai , 67, was designated a “proliferator” by the US government in 2005 for supplying North Korea with materials that could be used to build “advanced weapons”. As a result, he was prohibited from conducting business in the United States or with US banks or businesses.
He was also indicted by Taiwanese prosecutors in 2008 for forging shipping invoices and illegally shipping restricted materials to North Korea, charging papers said.
US prosecutors charge that Tsai began setting up shell companies run by his son, who is a legal US resident, in 2009 in order to illegally continue to do business in the United States.
One such company, Trans Multi Mechanics, was used to purchase and export precision tools like a rotary surface grinder that can be used for everything from making gaskets to building rocket parts.
Another company, Factory Direct Machine Tools, was used to export US goods and also import products such as oil pumps and LED traffic lights to the United States, charging papers said.
Tsai was arrested in Estonia last week and is awaiting extradition while his son Gary Tsai Yueh-hsun, 36, was arrested at his home in Illinois, prosecutors said.
The two men each face up to 20 years in prison and up to $1.75 million in fines if convicted of money laundering, conspiracy to defraud the United States government, and violating the International Emergency Economic Powers Act.