Two Chinese business-people were kept in marshals' custody after a court hearing Thursday for a smuggling investigation involving a Jacksonville-based Navy lieutenant and his wife.
Zheng Yan and Ge Songtao were arrested in Louisiana after an investigator claimed that Fan Yang and his wife, Yang Yang, worked with the pair to export boats to China without revealing the actual buyer.
The court filing that made that claim also said a company that Yang Yang incorporated mailed two packages containing flash drives to the Chinese buyer, Shanghai Breeze Technology Company.
The Yangs have not been indicted or arraigned but have been locked up since Oct. 17, apparently in part because of information investigators gained under the Foreign Intelligence Surveillance Act.
Prosecutors told a judge last week they plan to submit information gathered under FISA, which sets rules for surveillance and collecting information involving "agents of foreign powers."
Fan Yang, 34, is a Chinese-born U.S. citizen assigned to the Maritime Patrol Reconnaissance Weapons School at Naval Air Station Jacksonville.
He holds a top-secret security clearance -- it was renewed in January -- and trained as a naval flight officer responsible for weapons and tactics aboard the P-8 antisubmarine aircraft, according to court filings.
He has been married since 2013 to Yang Yang, who formed a company, BQ Tree LLC, in 2015. An affidavit from an FBI agent said the company's biggest source of revenue since late 2016 had been about $205,000 in wire transfers from Shanghai Breeze. A separate court filing cited a LinkedIn profile identifying Ge as the chairman of Shanghai Breeze.
The affidavit was attached to two separate criminal complaints filed in October, and shows the agent's thinking behind charges listed in both complaints, which the defendants have not had an opportunity to address yet.
The first complaint, naming the Yangs and Ge, accused Fan Yang of making false statements on the day his security clearance was renewed and, separately, making a false written statement to deceive a gun dealer.
It also accused all three of conspiring to violate a law prohibiting gun possession by a foreign with a non-immigrant visa, meaning Ge. The affidavit described Fan Yang buying a gun as the intended owner and having it engraved with Ge's initials, and said Yang Yang included both costs in a monthly expense report she emailed to Ge and Zheng, described simply as an employee of Shanghai Breeze.
The affidavit said that Fan Yang had an account at the Bank of China that someone controlled on his behalf. It said that information wasn't reported when his security clearance was renewed in January and said the lieutenant reported during the renewal that he had been offered a consulting job by Ge but told the Navy he turned down the offer.
Elsewhere, the affidavit said Fan Yang asked for leave from his work in July 2018 and said he was taking his family to Walt Disney World, but that he and his wife instead got plane tickets to Sioux City, Iowa, and rented a car there. The affidavit said that in the same time the couple visited Iowa, Yang Yang's credit card paid for a one-way plane ticket for Ge to leave an airport in Omaha, Nebraska, about 100 miles away.
The second complaint focuses on a claim that all four people named in the case conspired to falsify export information to hide goods being shipped from Navy contractors in the United States to addresses in China used by Shanghai Breeze.
The complaint said that over the summer, Yang Yang emailed an unnamed California marine manufacturer about buying inflatable boats that were supposedly headed to Hong Kong but were really bound for mainland China. She also asked for a quote on the price to add 55-horsepower Evinrude outboard motors that are marketed for military use.
Elsewhere, the FBI agent's statement said another manufacturer sold 10 boats that were sent to addresses in China. Like the California company, the business was omitted, but the affidavit said elsewhere that the company was a ship maker that won a Navy contract to make a PBX patrol boat, a new generation of coastal vessel. It said that in 2018, Yang Yang sent an email that included a photo of a prototype vessel labeled "[BUSINESS-6] wins US Navy PBX Patrol Boat Contract."
That phrase, with slight punctuation changes, was used in an October 2017 news release announcing a contract for Louisiana-based shipbuilder Metal Shark.
Hearings for the Yangs that were scheduled for Thursday were called off and U.S. Magistrate James Klindt continued detention hearings on Ge and Zheng until Monday.
This article is written by Steve Patterson from The Florida Times-Union and was legally licensed via the Tribune Content Agency through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.