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Rocket Scientist Sentenced To Prison

The Virginia-based physicist who sold controlled space-launch technology to China by bribing government officials there has been sentenced to 51 months in prison. Shu Quan-Sheng (left), 68, a native of China, naturalized U.S. citizen and PhD physicist, pleaded guilty in November 2008 to one count of violating the Foreign Corrupt Practices Act and two counts of violating the Arms Export Control Act. Shu had already forfeited $386,740 to the federal government before being sentenced to prison.

Shu is the President, Secretary and Treasurer of AMAC International Inc., a high-tech company based in Newport News, with another office in Beijing. AMAC performs research through grants funded by the Small Business Research program on behalf of the Department of Energy and the National Aeronautics and Space Administration (NASA).

Shu violated the FCPA by offering "percentage points" in 2006 worth a total of $189,300 to officials at a research institute affiliated with the China Academy of Launch Vehicle Technology. He was trying to land a contract to develop a liquid hydrogen tank system for a heavy payload launch facility located on Hainan Island in the PRC. In January 2007, the $4 million hydrogen liquefier project was awarded to a French company that Shu represented.

Shu violated the Arms Export Control Act by willfully exporting a defense service from the United States to the PRC without first obtaining the required export license or written approval from the State Department. He provided the PRC with assistance in the design and development of a cryogenic fueling system for space launch vehicles to be used at the heavy payload launch facility on Hainan.

The investigation involved the FBI, U.S. Immigration and Customs Enforcement, and the U.S. Department of Commerce, Office of Export Enforcement.

In a prior post we noted that Shu's arrest in September 2008 was similar to arrests earlier that month of U.S. citizens Nam Nguyen, Joseph Lukas, Kim Nguyen, and An Nguyen, along with their Philadelphia-based company, Nexus Technologies (see our post here). They were charged with one count of conspiracy to violate the Foreign Corrupt Practices Act and four substantive counts of violating the FCPA. They're accused of bribing government officials in Vietnam to secure contracts to supply high-tech items -- including third-party underwater mapping and bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems. That case doesn't yet involve charges under U.S. export laws.

Download the DOJ's April 7, 2009 release here.
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Full post as published by The FCPA Blog on April 08, 2009 (boomark / email).