[Chinese] Physicist admits sending US space know-how to China

A Chinese-born physicist Monday pleaded guilty before a US court to illegally exporting American military space know-how to China, US officials said.

Naturalized US citizen Shu Quan-Sheng, admitted handing over to Beijing information on the design and development of a fueling system for space launch vehicles between 2003 and 2007, the Justice Department said.

Shu, 68, pleaded guilty to violating the Arms Export Control Act by helping Chinese officials based at the space facility on southern Hainan island to develop manned space flight and future missions to the Moon.

He also acknowledged he had sent them in December 2003 a specific military document detailing the design of liquid hydrogen tanks crucial to launching vehicles into space, the Justice Department said in a statement.

Shu, who is the head of a high-tech company, AMAC International, based in Newport News, Virginia, with offices in Beijing, admitted a third charge of bribing Chinese officials to the tune of some 189,300 dollars.

The bribes helped him to secure for an unidentified French company a four-million dollar contract for the development of a liquid hydrogen tank system, awarded to the French firm in January 2007.

Beijing is developing a liquid-propelled heavy payload launch facility at Hainan which will eventually send spacecraft into orbit carrying the material needed to build space stations and stallites.

Shu bribed three Chinese officials from Beijing's 101st Research Institute, which works at Hainan, along with other bodies including the People's Liberation Army armaments department, the Justice Department said.

China sent its first man into space in 2003, followed by a two-man mission in 2005.

The Shenzhou VII, China's third manned foray into space, blasted off from Jiuquan Satellite Launch Centre in northwest China in late September.

One of the three astronauts on board, Zhai Zhigang, became the first Chinese astronaut to successfully complete a space walk, and the crew was feted with a hero's welcome on its return to Earth.

Premier Wen Jiabao told the Chinese mission control's dozens of technicians the mission was "a victory for China's space and technological" programs.

"Your historical feat will be remembered by the country and the people," he said.

China is now planning to launch two more unmanned craft by 2010, as well as another manned spaceship with a crew of three to start work on a Chinese lab or space station.

The charges against Shu arise out of a probe led by the Federal Bureau of Investigation with US trade and customs officials.

Sentencing in Shu's case has been set for April 6, 2009. He faces a maximum of 10 years in prison and a million-dollar fine for each of the two violations of the Arms Control Act. He could also be sentenced to a further five years in prison for bribery.

November 17, 2008

Note: The following text is a quote:

http://www.usdoj.gov/opa/pr/2008/November/08-nsd-1020.html

Virginia Physicist Pleads Guilty to Illegally Exporting Space Launch Data to China and Offering Bribes to Chinese Officials

WASHINGTON – A physicist in Newport News, Va., has pleaded guilty today to charges that he illegally exported space launch technical data and defense services to the People’s Republic of China (PRC) and offered bribes to Chinese government officials.

The guilty plea was announced today by Dana Boente, Acting U.S. Attorney for the Eastern District of Virginia; Patrick Rowan, 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 Ph.D. physicist, entered his plea before Judge Henry C. Morgan, Jr. in U.S. District Court for the Eastern District of Virginia, Norfolk Division. Shu is the President, Secretary and Treasurer of AMAC International Inc., (AMAC), a high-tech company based in Newport News and that has offices in Beijing.

Shu pleaded guilty to a three-count criminal information. Count one alleges that from January 2003 through October 2007, 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. Specifically, the information alleges that Shu 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 located in the southern island province of Hainan, PRC.

The space launch facility at Hainan 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, according to a criminal complaint filed in the case. Among those PRC government entities involved in the Hainan facility 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, according to the criminal complaint.

Count two of the criminal information alleges that on Dec. 20, 2003, Shu violated the Arms Export Control Act by willfully exporting a defense article to the PRC without first obtaining the required export license or written approval from the State Department. Specifically, the information alleges that Shu illegally exported to the PRC controlled military technical data contained in a document entitled “Commercial Information, Technical Proposal and Budgetary Officer – Design, Supply, Engineering, Fabrication, Testing & Commissioning of 100m3 Liquid Hydrogen Tank and Various Special Cryogenic Pumps, Valves, Filters and Instruments.”

Count three of the criminal information alleges that Shu offered, paid, promised and authorized the payment of bribes to Chinese government officials to influence their decisions and secure an improper advantage, in violation of the Foreign Corrupt Practices Act. Specifically, Shu, acting on behalf of his company, AMAC, and a French company he represented, offered to pay money to foreign officials of the PRC’s 101 Institute to obtain a contract for the development of a 600 liter per hour liquid hydrogen tank system, according to the information.

The criminal information indicates that Shu offered money on three occasions to three PRC officials with the 101 Institute to secure the contract. In February 2006, he offered “percentage points” worth approximately $56,800. In April 2006, he offered “percentage points” worth some $56,800, and in May 2006, he offered “percentage points” worth approximately $75,700, for a total of $189,300, according to the criminal information. In January 2007, the $4 million hydrogen liquefier project was awarded to the French company that Shu represented.

Sentencing in this matter is scheduled for April 6, 2009, where Shu faces a possible maximum sentence of 10 years in prison and a fine of $1,000,000 for each violation of the Arms Export Control Act, and a possible maximum sentence of five years in prison and a fine of $250,000 or twice the gross gain for violating the Foreign Corrupt Practices Act.

This investigation was conducted by the FBI, with assistance from U.S. Immigration and Customs Enforcement 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.

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08-1020

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