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Rocket Scientist Pleads Guilty In China Bribery Case

A Virginia-based scientist who sold controlled space-launch technology to China by bribing government officials there has pleaded guilty to violating the antibribery provisions of the Foreign Corrupt Practices Act.

Shu Quan-Sheng (left), 68, a native of China, naturalized U.S. citizen and PhD physicist, also pleaded guilty to two counts of violating the Arms Export Control Act by willfully exporting a defense article and a defense service from the United States to the PRC without first obtaining the required export license or written approval from the State Department.

In 2006, Shu offered "percentage points" 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.

For violating the Foreign Corrupt Practices Act, Shu faces a possible maximum sentence of five years in prison and a fine of $250,000 or twice the gross gain resulting from the FCPA offense. He also faces a possible maximum sentence of 10 years in prison and a fine of $1,000,000 for each of the two violations of the Arms Export Control Act. Sentencing is scheduled for April 6, 2009.

Shu's company, AMAC International Inc., is based in Newport News, Virginia and also has an office in Beijing. According to its website, AMAC is "a high tech company operating at the cutting edge of technology." The site says because of its accomplishments "in Research & Development of Superconducting RF Power Technologies, Magnetic Levitation and Cryogenics in space, AMAC has been awarded more than $2,000,000 of innovative research grants from the US Department of Energy (DOE) and National Aeronautics & Space Administration (NASA)."

We noted in a prior post about Shu the similarities between his arrest in September and 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 paying bribes to officials at Vietnam?s Ministries of Transport, Industry and Public Safety 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.

View the Justice Department's November 17, 2008 release here.

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Full post as published by The FCPA Blog on November 17, 2008 (boomark / email).