Chinese National and U.S. Legal Permanent Resident Charged for Illegal Scheme to Export Controlled Data and Defraud the Department of Defense

 

A four-count indictment was unsealed charging Hang Sun, also known as Cody Sun, with conspiracy, wire fraud, smuggling, and a violation of the Arms Export Control Act for his role in an illegal scheme to send export-controlled defense-related technical data to China and to unlawfully supply the Department of Defense (DOD) with Chinese-origin rare earth magnets for aviation systems and military items.  

The indictment alleges that between January 2012 and December 2018, the defendant conspired to send approximately 70 drawings containing export-controlled technical data to a company located in China without a license from the U.S. government, in violation of the Arms Export Control Act and the International Traffic in Arms Regulations. The technical data drawings were the property of two U.S. companies and related to end-use items for aviation, submarine, radar, tank, mortars, missiles, infrared and thermal imaging targeting systems, and fire control systems for DOD.

The indictment further alleges that Quadrant Magnetics imported rare earth magnets that were smelted and magnetized by a company in China. Quadrant then sold these magnets to two U.S. companies which included them in components sold to DOD for use in the F-16, the F-18, and other defense assets in violation of the Defense Acquisition Regulations System (DFARS). Under the DFARS specialty metal clause, rare earth magnets sold to DOD must be produced in the United States or an approved country. China is not an approved country.  Quadrant Magnetics and three of its employees were separately charged in a superseding indictment filed in the Western District of Kentucky on Dec. 5, 2023.

If convicted, Sun faces statutory maximum penalties of up to five years in prison for conspiracy; 20 years in prison for wire fraud; 20 years in prison for exporting technical data without a license; and 10 years in prison for smuggling goods from the United States. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS), U.S. Attorney Michael A. Bennett for the Western District of Kentucky, Executive Assistant Director Robert Wells of the FBI’s National Security Branch, and Special Agent in Charge Karen Wingerd of the IRS Criminal Investigation (IRS-CI) Cincinnati Field Office made the announcement.

The DCIS, FBI, Department of Homeland Security, IRS-CI, Naval Criminal Investigative Service, and Department of Energy’s Office of Inspector General are investigating the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Attorney General James Announces Arrest of Rensselaer County Tow Truck Operator for Car Theft Scheme

Tow Company Owner Stole Over a Dozen Towed Vehicles and Sold Them Without Notifying Owners

New York Attorney General Letitia James announced the arrest of John F. Rivers, 43, of East Greenbush for using his towing company, Rivers Asset Recovery, to steal and sell vehicles towed from parking lots across the Capital Region. An investigation by the Office of the Attorney General (OAG) and New York State Police (NYSP) revealed that Rivers used his contracts with local businesses to monitor parking lots and tow vehicles, and then later illegally sold vehicles he towed to scrapyards or used car dealers. Rivers was charged today with multiple felonies for stealing 17 vehicles worth a combined $230,000 over nearly two years, including Grand Larceny in the Third Degree, Grand Larceny in the Fourth Degree, and Scheme to Defraud.

“Car theft is a serious crime that can leave New Yorkers stranded, and my office is focused on stopping anyone who tries to profit from it,” said Attorney General James. “This alleged scheme was a systematic effort to use legal towing for illegal theft and deception, leaving New Yorkers across the Capital Region in the dark about what happened to their cars. I thank our partners in this investigation for their work to help crack down on car theft and shut down this scheme.”

Towing companies are required to notify the owner of the towed vehicle within five days and must hold a vehicle for 30 days before claiming its title. However, Rivers sometimes sold vehicles he towed within days of towing them and without notifying the vehicle’s rightful owner. The investigation revealed that from October 2022 through August 2024, Rivers used his status as a tow truck operator, with contracts to repossess and tow cars left overnight in area parking lots, to steal and sell 17 vehicles.

Parking lots serviced by Rivers included a Walmart in Latham, a Hannaford in Albany, and a Home Depot in Rensselaer. Of the 17 vehicles Rivers stole, 12 were sold to used car dealers and five were sold to scrapyards. In some cases when the owners of vehicles that Rivers stole tried to recover their cars, Rivers would either ignore their requests or demand $1,000 for every day that he had held the car.

In one egregious example, in March 2024, NYSP investigators parked an “undercover” Hyundai Sonata provided by an insurance company in the Walmart parking lot in Latham, where Rivers had a tow contract. The car was towed later that night and brought to the Rivers Asset Recovery shop while the registered owner was never notified it had been towed. Two months later, the Sonata was transported to a scrapyard in Massachusetts, where NYSP observed it cut up into parts. To date, the vehicle’s registered owner has never been notified that the Sonata was towed or sold.   

The criminal complaint – arraigned before Rensselaer City Judge Linda Blom Johnson – charges Rivers with multiple felonies, including Grand Larceny in the Third Degree, Grand Larceny in the Fourth Degree, and Scheme to Defraud. If convicted, Rivers faces a maximum sentence of up to 20 years in prison. A criminal complaint is only an accusation, and the defendant is presumed innocent until proven guilty.

“Through a collaborative investigation among law enforcement partners, we have uncovered an alleged car theft operation that was responsible for victimizing car owners throughout the Capital Region,” said New York State Police Superintendent Steven G. James. “I want to commend the efforts of the Attorney General’s office and all of those involved in bringing this criminal activity to an end, and for the outstanding work that led to the arrest in this case.”

The ongoing investigation is led by the NYSP Special Investigations Unit, with the assistance of the NYS Department of Motor Vehicles and the Division of Tax and Finance.

BRONX MAN INDICTED FOR MURDERING TEEN IN HAIL OF BULLETS

 

Bronx District Attorney Darcel D. Clark announced that a Bronx man has been indicted for second-degree Murder and additional charges for the fatal shooting of a teenager on a Mott Haven Street. 

District Attorney Clark said “The defendant allegedly fired ten shots at a 17-year-old boy, striking him three times and ending his life. This act was reckless and senseless.” 

District Attorney Clark said James Walker, 34, of 609 Oak Terrace, was indicted on second-degree Murder, first-degree Manslaughter and two counts of second-degree Criminal Possession of a Weapon. He was arraigned before Bronx Supreme Court Justice Brenda Rivera Remand was continued and he is due back in court on March 26, 2025.

According to the investigation, on November 9, 2024, at approximately 7:40 p.m., in front of 609 Oak Terrace, in the Mott Haven section of the Bronx, Walker came out of his building and allegedly fired ten shots from a 9-mm. pistol at Xavier Navarez, 17, whom he knew, striking him three times in the torso and leg. He was taken to New York Health And Hospitals Lincoln where he later died. Walker surrendered to NYPD Detectives at his apartment. The weapon was recovered in a bag behind the building.

District Attorney Clark thanked NYPD Detective Frankie Soler of the Bronx Homicide Squad and Detective Christopher Medina of the 40th Precinct Detective Squad for their work on the investigation.

An indictment is an accusatory instrument and not proof of a defendant’s guilt.

State Comptroller Thomas P. DiNapoli's Weekly News - Pre-School Special Ed Services Lacking

 

Critical Pre-School Special Ed Services Are Not Reaching All Students Who Need Them

Pre-school students in need of special education services are not always getting the help they need or are getting services late, according to an audit released by State Comptroller DiNapoli. The audit of the State Department of Education (SED) found many local school districts maintain waitlists for services because there are not enough providers, and SED’s oversight of services was hindered because it did not know how many students were enrolled in the preschool special education service program, the services they are receiving in real time, or the number of districts using waitlists.

“Providing timely, quality early education services to preschool children with special needs can make a world of difference in their development, and delays can have long term consequences for their academic futures,” DiNapoli said. “Too many children are not getting the services and therapies they are entitled to within required timeframes, and some are not getting the services at all. The State Education Department and school districts must do a better job serving these students. I am pleased that SED agreed with our findings and has taken several steps to improve service delivery for students entitled to these essential special education services.”

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Spotlight on Corning, NY

State Comptroller DiNapoli released an economic and fiscal profile of the City of Corning, where economic development and smart growth initiatives have helped build on the City's stable fiscal picture.

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DiNapoli Tracks NYC Agency Performance, Recommends Greater Transparency

New York City’s government workforce reached more than 300,000 employees in June of 2024, the first year-over-year increase since the COVID-19 pandemic. Still, some City agencies remain understaffed, resulting in critical services being impacted, according to a report released by State Comptroller DiNapoli.

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State Contract and Payment Actions in October

In October, the Office of the State Comptroller approved 1,982 contracts for State agencies and public authorities valued at $5 billion and approved nearly 2 million payments worth more than $16.5 billion. The office rejected 269 contracts and related transactions valued at $1 billion and more than 1,800 payments valued at more than $9.1 million, primarily for mistakes, insufficient support for charges, and improper payments. More information on these contracts and payments is available at Open Book New York.

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Troy's Proposed Bond Financing for Its Lead Pipe Replacement Program Is Lawful and Constitutional

In response to a request from the Troy City Council, State Comptroller DiNapoli issued an advisory opinion finding that the City could lawfully issue bonds in connection with financing the City seeks from the State Environmental Facilities Corporation under a federal program to help fund its replacement of public and private lead water service lines without running afoul of the State Constitution’s prohibition on using public funds for private purposes.

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Municipal & School Audits

• Town of Oxford
• Randolph Academy Union Free School District
• Oakfield-Alabama Central School District
• Town of Volney
• Village of Sloan
• City of Newburgh
• Jefferson County Industrial Development Agency

ALSO IN THE NEWS THIS WEEK

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• Hochul considers N.Y. spending transparency bill for second year

• State audit reveals gaps in preschool special education services
  
  
• New York State Comptroller gives Troy the go-ahead to replace private lead lines with public funds
  
  

• Does NY owe you money? You can now get your unclaimed funds quicker

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Thomas P. DiNapoli