United States v. Shuren Qin, Criminal No. 18-cr-10205

CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
Writing for the CourtCASPER, J.
PartiesUNITED STATES OF AMERICA v. SHUREN QIN et al., Defendants.
Decision Date30 November 2020
Docket NumberCriminal No. 18-cr-10205

UNITED STATES OF AMERICA
v.
SHUREN QIN et al., Defendants.

Criminal No. 18-cr-10205

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

November 30, 2020


MEMORANDUM AND ORDER

CASPER, J.

I. Introduction

Defendant Shuren Qin ("Qin") has moved to suppress evidence seized from his laptop computer and iPhone and statements he made to agents during a secondary inspection upon his return to the United States from China at Logan Airport on November 24, 2017. D. 212. Having considered the evidence offered by the parties at an eight-days-long hearing (conducted on various dates between December 2019 and August 2020) and the arguments of counsel presented in their various filings and during the hearing, the Court DENIES the motion to suppress, D. 212. At a minimum, the agents had reasonable suspicion for the search and seizure on November 24, 2017 and, any statements made by Qin were non-custodial statements not in contravention of the Fifth Amendment. In support of same, the Court makes its findings of fact and legal analysis below.

II. Findings of Fact

These findings are based upon the testimony of the various witnesses who testified at the suppression hearing and the exhibits introduced by both parties at that hearing.

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A. Qin's Business, LinkOcean

Qin resides in Wellesley, Massachusetts and has provisional permanent resident status to live in the United States through the EB-5 visa program. II:28; V:8-9.1 He founded his company, Defendant LinkOcean Technologies ("LinkOcean") in Qingdao, China in August 2005. I: 35; Exh. 3. According to LinkOcean's website, its clients are in China. I:36; Exh. 3. One of those customers is the Chinese Navy. II:76. Others are research institutes located in China, VI:70, which were not on the U.S. entities list,2 but were still of concern to the agents, since some such research institutes receive substantial funding from the Chinese military, I:36-37, 41, and provide research and development for same. V:126; VI:5. LinkOcean identifies itself as the "exclusive representative" of twenty-four manufacturers, some that are in the United States. II:72; VI:69; Exh. 2, 3.

B. Investigation of Qin Prior to November 24, 2017

The investigation of Qin began in April 2017. I:27. Over the course of the investigation and by the time of November 24, 2017 search at Logan Airport, the investigation involved Homeland Security Investigations division ("HSI") of the U.S. Department of Homeland Security ("DHS"), Department of Commerce ("DOC"), Naval Criminal Investigative Service ("NCIS"), Defense Criminal Investigative Service, and Customs and Border Protection ("CBP"). I:14-15.

1. Initial Investigation After Tip from Riptide

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The investigation of Qin began with a tip in April 2017 from Riptide Autonomous Solutions, LLC ("Riptide"), a cleared defense contractor, to the Defense Security Service. Riptide reported that Qin had approached the company about purchasing a micro, unmanned underwater vehicle ("micro-UUV"), a type of underwater unmanned vehicle ("UUV"), for sale to his Chinese customers. I:22-25; II:50; VIII:7; Exh. 1.

Shortly thereafter, on April 21, 2017, an undercover agent (from NCIS) posing as an employee of Riptide, picked up the discussions with Qin. I:29-30; II:55; Exh. 2. In this meeting, Riptide explained that most of their customers were U.S. military and in the oil and gas industry and that research institutes/universities were not great customers for it since they tend to purchase just one vehicle and Riptide liked to sell their vehicles in bulk. Exh. 2. Qin said he was interested in representing Riptide in China. Exh. 3. Although Qin may have originally approached Riptide regarding a micro-UUV, a type of vehicle that could be used for research, I:56-57, or military use during the discussions with the undercover NCIS agent, Qin asked Riptide about exporting a U.S.-made autonomous underwater vehicle ("AUV") and expressed interest in its ability to gather data "in real time" which is not typical for research vessel and indicated that his customers included the Chinese Navy, a military operation. Exh. 2; I:30-31. Agents were concerned that the vehicle that Qin had expressed interest in acquiring from Riptide would require a license to export to China, an effort that he appeared to want to circumvent with discussion about creating a domestic (U.S.) company for the purchase. Exh. 2; I:37. Riptide never sold Qin any of the items that he was seeking to procure from them. VII:12; VIII:9, 39.

The ongoing investigation revealed that Qin had not only approached Riptide about the purchase of AUVs, but other U.S. manufacturers of same, namely, OceanServer and Xylem. I:42.

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Both of these companies produce similar vehicles, include AUVs produced for the U.S. Navy. I:43. Both companies declined to sell their vehicles to Qin. I:44.

2. Joint Agency Investigation Begins and Undercover Operation Involving HSI Starts

After the NCIS undercover communications with Qin, the investigation regarding Qin and LinkOcean continued in earnest. In May to July 2017, HSI Special Agent ("SA") Thomas Anderson, acting in an undercover capacity, communicated via e-mail with Qin about his interest in purchasing AUVs. I:43-44, 58; II:78-79; Exhs. 4-7, 62. SA Anderson did so after Riptide had indicated that it did not want to do business with Qin, but there was another company, represented by Anderson operating in an undercover capacity, that might. I:48. Although in his various communications, Qin identified his customer as a marine ecologist, the agent did not believe that to be true given the nature of his inquiry about capabilities of the AUV, including, for example, WiFi capability, typically not necessary for research purposes. I:46-47, 56; Exhs. 4-5. SA Anderson forwarded quotes and brochures to Qin based upon the specifications that Qin indicated that he needed for his customer. II:86-87; IV:8; Exh. 39. Other of Qin's communications raised red flags for Anderson as well, including their discussions about getting a Xylem AUV. Exh. 6. During their email exchanges, Qin had become more interested in the EcoMapper from Xylem instead of any vehicle from Riptide, II:94, particularly after the UCA meeting described below. As to same, Qin asked Anderson not to tell Xylem that the end user was in China. I:49; Exh. 6 (Qin asked "[p]lease do not tell Xylem your end user is in China, you could tell them your customer is in US"). SA Anderson knew, from agents' discussions with Xylem, that this product was "controlled for export" to China and that the agent believed that Qin's statement reflected some awareness of same if the end user was known to be in China. I:50.

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Qin's interest in the purchase of sonobuoys also raised concerns for the agent. I:51; II:68; Exh. 6 (Qin noting that "[m]y customer wants some other products" and then seeking quotes for three types of sonobuoys). A sonobuoy is an object that can detect movement, sound and objects in the water around it and it is a "military item that is controlled under the United States Munitions List and only has a military purpose," I:51, and cannot be exported to China. Exh. 21 at 14 n.3; Exh. 20 (22 C.F.R. § 121.1); see United States v. Zhen Zhon Wu, 711 F.3d 1, 12 (1st Cir. 2013). Qin had particular interest in a sonobuoy produced by Ultra Electronics ("Ultra"), a U.S. manufacturer. I:51-52; III:103-04. Ultra confirmed the use of same for military purposes and that it was at work on an AUV that worked in conjunction with sonobuoy, again strictly for military use by the U.S. Navy. I:51-52; III:108-09; IV:70-71.

As part of this undercover operation, Qin met with another undercover agent posing as SA Anderson's boss. II:13-14, 80-81. This meeting took place on June 30, 2017 and was recorded by the agents. Exh. 44 (including transcript). Qin and the undercover agent discussed a number of matters. Exh. 44. At this meeting, Qin initially was still interested in the Riptide vehicle with Ecomapper sensors, Exh. 44 at 13, and accessories for "spare parts" and the software for the vehicle, Exh. 44 at 66. The UCA explained that these components were made by other companies and that if, as Qin indicated, his customer wanted a "turn-key product," then he might be interested in products from Xylem. Exh. 44 at 19-21, 29, 41. The UCA also explained that Riptide did not want to sell its vehicle in China. Exh. 44 at 40. At a point in their meeting, the UCA called a purported salesman ("Larry") to get more information about the Riptide AUV. Exh. 44 at 29-34. Larry explained some of the features of the Riptide AUV including that Qin would not get the software until purchasing one of the AUVs. Exh. 44 at 34. When asked about the end user of his product, Qin indicated that it was "a scientist" in China. Exh. 44 at 20, 27. Qin indicated that he

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might be interested in the Xylem product for his customer, "the same customer." Exh. 44 at 47, 66. After this meeting, Qin indicated that he wanted the Xylem AUV with EcoMapper, not a Riptide product, for his client. II:99; Exh. 44 at 54. Qin expressed concern about the "exporting licenses" since it is not easy if commodities have military applications, Exh. 44 at 61, but disclaimed that his customer's interest was for military use. Exh. 44 at 68. In follow-up emails with Anderson, Qin asked Anderson to get quotes for Xylem product with EcoMapper for him. II:106; Exh. 45-47. Qin asks Anderson not to tell Xylem that his end user was in China. II:106; Exh. 6. Qin contends that this was because he had gotten a higher price from Xylem in China and did not want the company to know that he was getting a better price from a third-party seller in the U.S. II:108-09.

By end of summer 2017, agents were concerned that Qin's efforts to acquire an AUV and/or sonobuoys may be in an attempt to assist the Chinese Navy in "working on a system that would incorporate an autonomous underwater vehicle and somehow use it in conjunction with...

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