FOR IMMEDIATE RELEASE
Wednesday, September 24, 2008
WWW.USDOJ.GOV
http://www.usdoj.gov/opa/pr/2008/September/08-nsd-851.html
NSD
(202) 514-2007
TDD (202) 514-1888
Virginia Physicist Arrested for Illegally Exporting Space Launch Data to China
and Offering Bribes to Chinese Officials
WASHINGTON – A physicist in Newport News, Va., was arrested today on charges of
illegally exporting space launch technical data and services to the People’s
Republic of China (PRC) and offering bribes to Chinese government officials.
The arrest was announced today by Chuck Rosenberg, U.S. Attorney for the
Eastern District of Virginia; Patrick Rowan, Acting Assistant Attorney General
for National Security; Matthew Friedrich, Acting Assistant Attorney General of
the Criminal Division; Arthur M. Cummings, II, Executive Assistant Director,
FBI National Security Branch; and Alex J. Turner, Special Agent in Charge, FBI
Norfolk Division.
Shu Quan-Sheng ("Shu"), 68, a native of China, naturalized U.S. citizen and PhD
physicist, was arrested in Newport News by FBI agents. Shu is the President,
Secretary and Treasurer of AMAC International ("AMAC"), a high-tech company
located in Newport News. AMAC International also has an office in Beijing,
China. Shu made his initial appearance earlier today in U.S. District Court for
the Eastern District of Virginia, Norfolk Division.
Shu is charged in a criminal complaint with unlawfully exporting a defense
service to foreign persons without prior approval, in violation of the Arms
Export Control Act; unlawfully exporting a defense article in violation of the
Arms Export Control Act; and bribing, offering a bribe, and attempting to bribe
a foreign government official, in violation of the Foreign Corrupt Practices
Act (FCPA). Shu faces a possible sentence of 10 years in prison for each
violation of the Arms Export Control Act, and five years in prison for
violating the FCPA.
According to the complaint, beginning in or around January 2003, Shu provided
technical assistance and foreign technology acquisition expertise to several
PRC government entities involved in the design, development, engineering and
manufacture of a space launch facility in the southern island province of
Hainan, PRC. This facility will house liquid-propelled heavy payload launch
vehicles designed to send space stations and satellites into orbit, as well as
provide support for manned space flight and future lunar missions.
Among those PRC government entities involved in the space launch facility in
Hainan are the People's Liberation Army's General Armaments Department and the
101st Research Institute (101 Institute), which is one of many research
institutes that make up the China Academy of Launch Vehicle Technology, as
overseen by the Commission of Science Technology and Industry for the National
Defense. The Beijing Special Engineering Design Research Institute (BSEDRI) is
the governmental entity responsible for the procurement of cryogenic liquid
storage tanks for the Hainan launch facility
According to the complaint, Shu has been involved in the PRC's systematic
effort to upgrade their space exploration and satellite technology capabilities
by providing technical expertise and foreign technology acquisition in the
fields of cryogenic pumps, valves, transfer lines and refrigeration equipment,
components critical for the use of liquefied hydrogen in a launch facility. Shu
has also been instrumental in arranging for PRC officials to visit various
European space launch facilities and hydrogen production/storage facilities.
Shu's efforts include the successful brokering of a January 2007 contract
between the PRC’s 101 Institute and a French company for the production and
supply of a 600 liter per hour hydrogen liquefier. This liquefier will be part
of the 101 Institute's comprehensive research, development, and test base for
liquid-propelled engines and space vehicle components, and at the time, the
liquefier represented the first in as many as five additional projects to be
undertaken by AMAC and the French company, all to be used as ground-based
support for the launch vehicles at the Hainan launch facility.
Shu is accused of illegally exporting technical data related to the design and
manufacture of a "Standard 100 M3 Liquid Hydrogen (LH) 2 Tank," and illegally
providing assistance to foreign persons in the design, development, assembly,
testing or modification of the "Standard 100 M3 LH2 Tank" and related
components of fueling systems for a foreign launch facility. At no time during
this period did Shu have the required licenses or written approvals with
respect to brokering, export of defense articles, or proposals to provide
defense services to the PRC.
The complaint also alleges that Shu offered bribes to government officials with
the PRC’s 101 Institute to induce the award of the hydrogen liquefier project
to the French company Shu represented. According to the complaint, on Dec. 1,
2003, Shu and his company AMAC entered into an agreement with the French
company establishing AMAC and Shu as the French company’s representative in
China. The agreement provided that AMAC was entitled to a success fee of ten to
fifteen percent.
According to the complaint, prior to the ultimate decision to award the
hydrogen liquefier project to the French company in January 2007, Shu offered
payments to PRC officials within the 101 Institute to induce those officials to
award the contract to the French company rather than a competitor and to earn
Shu and AMAC a commission. The contract value for the hydrogen liquefier is
believed to total approximately $4 million, according to the complaint.
This investigation was conducted by the Federal Bureau of Investigation (FBI),
with assistance from U.S. Immigration and Customs Enforcement (ICE), and the
U.S. Department of Commerce, Office of Export Enforcement.
The prosecution is being handled Assistant U.S. Attorney Alan M. Salsbury from
the U.S. Attorney’s Office for the Eastern District of Virginia and Assistant
Chief Robertson Park from the Criminal Division’s Fraud Section.. The
Counterespionage Section of the Justice Department’s National Security Division
provided critical assistance.
The public is reminded that the charges in a criminal complaint are mere
allegations and that defendants are presumed innocent unless and until proven
guilty in a court of law.
###
08-851
Mark R. Taylor
Take no prisoners!
http://americantruckersatwar.com
AmericanTruckersAtWar Discussion Group
http://youtube.com/ironponyexpress
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