12 - Hong Kong Front Company Linked to Export Conspiracy for PLA Navy

Ge Songtao was the chairman of Shanghai Breeze Technology Co. Ltd., a Shanghai-based company that specializes in marine equipment. For the advancement of his own company, Ge was looking to source “combat rubber raiding craft equipped with engines that could operate using gasoline, diesel fuel or jet fuel”. Ge leveraged an employee based in the United States named Yang Yang. Yang was instructed to order the gasoline engines that were military model. The manufacturer noted this as a red flag after she insisted on the military models over the cheaper commercial ones. The investigation found that Ge planned to resell the ships to the Chinese Navy.[1]

Yang was instructed to list her customer as the Hong Kong-based United Vision Limited because “American manufacturers would be more likely to sell to an entity in Hong Kong rather than one in mainland China.” To pay for the equipment, Ge used another front company in Hong Kong, Belt Consulting Company Limited, to wire the payment to the engine producer. At the time when the plan was foiled by investigation services, Ge had also coordinated for a representative to go to Hong Kong to transship the parts to mainland China.

Ultimately, after a three year investigation, Ge was sentenced to 42 months in prison for export reporting crimes.