Glenview man charged with helping North Korea produce WMD

Glenview man charged with helping North Korea produce WMD

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CHICAGO (FOX 32 News) -

A northwest suburban man and his father are in federal custody after being charged with conspiring to provide machinery and parts for weapons of mass destruction to North Korea through a Glenview-based company.

Yueh-Hsun "Gary" Tsai, a native of Taiwan and a legal permanent resident who lives in Glenview, was arrested May 1, the same day his father, Hsien Tai "Alex" Tsai, believed to live in Taiwan, was arrested in Estonia, according to a statement from the U.S. Attorney's office.

A criminal complaint filed in U.S. District Court in Chicago said Alex Tsai has been linked to supplying weapons machinery to North Korea; and conspired with his son to violate laws designed to thwart proliferation of such weapons by exporting machinery and parts, at least partly through Factory Direct Machine Tools in Glenview.

Gary Tsai, 36, was ordered held without bond pending a detention hearing Monday afternoon; while Alex Tsai, 67, remains in custody in Estonia pending extradition, the statement said.

Both are charged in three complaints with one count each of:

— conspiring to defraud the United States in its enforcement of laws and regulations prohibiting the proliferation of weapons of mass destruction;

— conspiracy to violate the International Emergency Economic Powers Act by conspiring to evade restrictions imposed on Alex Tsai and two of his companies by the U.S. Treasury; and

— money laundering.

According to the complaint affidavits, federal agents have been investigating both men, along with a Taiwanese associate of Alex Tsai, and three companies which exported U.S. products and machinery which could be used to produce weapons of mass destruction.

Neighbors noticed some unusual things goings on, but had no idea it was the feds.

"I thought maybe that it was a real estate agent putting their house on the market because we just don't see that many people at their house," says Kristen McGargill.

Taiwan-based Global Interface Company, Trans Merits Co., and Trans Multi Mechanics Co. purchase and export machinery used for the precision fabrication of metals and other materials, the affidavit states. In January 2009, the Treasury designated Alex Tsai, Global Interface, and Trans Merits as "proliferators of weapons of mass destruction," prohibiting anyone in America from dealing with them.

The designation charged them with "providing, or attempting to provide, financial, technological, or other support for, or goods or services in support of the Korea Mining Development Trading Corp., designated as a proliferator by President George W. Bush in June 2005," according to the statement.

It claimed they supplied "goods with weapons production capabilities" throughout the 1990s "to support North Korea's advanced weapons program."

But after the 2009 designation, Alex and Gary Tsai and their co-conspirator continued to conduct business, hiding Alex Tsai's and Trans Merit's involvement by using different company names, the affidavit states.

The charges claim Gary Tsai formed Factory Direct Machine Tools in Glenview to import and export machine tools, parts and other items, not disclosing that Alex Tsai and Trans Merits were active partners.

"The charges in this case again are that there were three transactions occurring two and a half to three and a half years ago years ago of a son who had been in this country for quite some time, without ever violating the law, helping his father purchase rather inexpensive old machine tools in this country and shipping them to him," says Ted Poulos, who represents Gary Tsai.

As to the timing, a spokesman for the U.S. Attorney's Office said, "neither the substance of the charges nor the timing have anything to do with Boston."

Tsai's attorney suggested the ban on U.S. business dealings was broad enough to cover some completely harmless transactions.

"Once somebody is designated as such, somebody couldn't have sent him Q-Tips for example, so that's what the charges are," Poulos explains.

The charges carry up to 20 years in prison each and fines of $1 million or more, according to federal prosecutors.

The Sun-Times Media Wire contributed to this report.

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