Charlson Ho, a 51-year old Singaporean, has been accused by the US Customs Service of attempting to export military encryption technology to China. However, in an interview with Singapore.CNET.com on Thursday, Ho claimed that he was innocent of all charges. Overnight, two men were arrested by Customs Service officials in Baltimore, Maryland and accused of scheming to smuggle two units of KIV-7HS, which are devices used to encrypt classified and sensitive national security data transmissions. "The technology that these individuals were attempting to export to China is among the most sensitive items on the US ammunitions list," said Allan Doody, the US Customs Service special agent in charge. Doody said sale of the technology must be approved by the National Security Agency, the Associated Press reported yesterday. Customs agents arrested Eugene Hsu of Blue Springs, Missouri and David Yang of Temple City, California. The maximum sentence for smuggling sensitive technology is 10 years in prison and a $1m fine for each violation, AP said. According to a federal affidavit, Ho is affiliated to Singapore-based Wei Soon Loong Pte, the company which intended to buy the encryption technology. But Ho claims he was unaware that he was in breach. "The products were for my friend in Hong Kong," he said, declining to reveal his identity. A few months ago, Ho claimed that his friend asked him to contact a Eugene Hsu in the US in order to obtain information on how to purchase the KIV-7HS. And Hsu did not disappoint. He provided the name and number of a Maryland-based firm called Stellar International. The KIV-7HS protects classified and sensitive digital Type 1 data transmissions at data rates up to 1.54 Mbps, and is ideal for compliance with the US Government directives NACSI 6002 and DoD Instruction 5210.74. Ho consented. "I thought I could earn a few hundred dollars. I was told that it was merely a communications device...never thought it was illegal because it only costs a few thousand dollars." Both KIV-7HS units cost US$16,500. After payment was made to one Daniel Stevenson from Stellar, Ho assumed all was well...until Singapore.CNET.com confronted him with the allegations today. He then decided to lodge a police report. After his initial interview with the police, a shaken Ho said: ''Yes, I'm scared. I don't know anything and suddenly the US wants to arrest me." Married with a 15-year old son, Ho came to Singapore in the 70s from Hong Kong. The good news, at least for now, is that authorities in Singapore will not take any action against Ho. "They [police] told me that they can't investigate as the US authorities has not contacted them," Ho said. In addition, he did not break any local laws. But US Customs agents were hot on the heels of Ho's alleged accomplices. When Hsu contacted representatives of the company Mykotronx, a private defence contractor based in Maryland, he had asked about the encryption technology and wanted a price quote. Company executives reported Hsu's telephone call to Customs agents in Baltimore and undercover agents replaced Mykotronx representatives in later telephone conversations with Hsu, AP reported. Citing the Customs Service, the report said that Hsu made clear that he understood the technology could not legally be sold to China. In a taped conversation in May, an undercover agent told Hsu: "I can make a domestic sale to you, and then you can get it out however you want. But that would not be legal. It would be illegal...and I just want your assurance it's not going to come back to burn me." Hsu replied: "Everyone will keep their mouths shut." The Customs Service said that Hsu contacted Yang to ship the freight, and Yang was informed that it was an illegal shipment. Yang told undercover agents that he had been in the business for 20 years and that he knew "how to handle these types of problems," the report said. Staff writer Samuel Quek contributed to this report. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forum. Let the editors know what you think in the Mailroom. And read other letters.