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Springs Company Had Role In Cracking International Smuggling Ring

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(credit: CBS)

(credit: CBS)

Investigator Rick Sallinger

DENVER, Colo. (CBS4) – A company in Colorado Springs is getting the credit for providing information that broke an international smuggling ring with ties to China.

A Chinese national pleaded guilty on Tuesday to charges in Denver federal court. CBS4 Investigator Rick Sallinger was on hand as the man admitted to a plot that reads like a spy novel.

Wearing a brown jumpsuit Philip Chaohui pleaded guilty. He had worked for the California transpiration department, Caltrans. It was a conspiracy that spanned from Shanghai to Colorado Springs and California in violation of the U.S. arms embargo against the People’s Republic of China.

For Aeroflex in Colorado Springs it was an order that just didn’t seem right. The company provides high-tech products for aerospace industry, defense industry and others. Aeroflex became highly suspicious of an order for nearly $500,000 worth of radiation-hardened integrated circuits.

Agents from the Department of Homeland Security were notified. Their investigation uncovered an international smuggling ring. It found almost $500,000 was wired from a bank in the People’s Republic of China to the bank account of Phillip Chaohui in Oakland, Calif. The money was then used to purchase the products from Aeroflex by claiming they would not leave the country.

One shipment of 112 items was delivered by the defendant in a backpack to an unknown party in Tijuana, Mexico. Then in December 2011 at the Port of Long Beach in California 200 more integrated circuits were discovered in the trunk of a car. The circuits had been placed in boxes containing plastic infant formula bottles and marked “Milk Powder.” They were to be placed on a ship registered to the Zhenua Port Machinery Company owned by a Chinese state-owned company.

Integrated circuits made by Aeroflex (credit: Aeroflex)

Integrated circuits made by Aeroflex (credit: Aeroflex)

Federal authorities tried to get Chaohui to cooperate and his wife is under investigation. When asked in court why he did it he replied, “To get more money for my family.”

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