Va. Scientist Pleads Guilty to Selling Rocket Technology to China

November 18, 2008 by Tim McDowell.

NORFOLK, Va.–A Virginia scientist pleaded guilty Monday to selling rocket technology to China and bribing Chinese officials to secure a lucrative contract for his high-tech company.

Quan-Sheng Shu, 68, pleaded guilty to two counts of violating the federal Arms Control Act and one count of bribery at a hearing in U.S. District Court in Norfolk.

Shu is president of AMAC International Inc. of Newport News. He is a naturalized U.S. citizen who was born in Shanghai.
Prosecutors said Shu, an expert in cryogenics, sold technology to China for the development of hydrogen-propelled rockets.

The Chinese government is developing a space launch facility in the southern island province of Hainan that will house liquid-propelled launch vehicles designed to send space stations and satellites into orbit. The project is overseen by an arm of the People’s Liberation Army.

The U.S. maintains an arms embargo on China. The State Department determined that Shu’s attempts to sell information on liquid hydrogen tanks and cyrogenics equipment for the fueling system of a foreign launch facility constituted an illegal transaction.

Prosecutors also said Shu had directed employees to falsify information to circumvent U.S. laws.

Shu also was charged with bribing Chinese officials to award a $4 million hydrogen liquefier contract to a French company acting as an AMAC intermediary.

Shu received more than $386,000 in commissions for securing the contract, authorities said. He already had agreed to forfeit that money. His company also has offices in Beijing.

Shu faces up to 10 years on each arms count and five years for the bribery charge and fines of up to $2.5 million. Sentencing is scheduled for April 6. He will remain free on $100,000 bond.

The scientist and his wife refused to comment as they left the courtroom. As part of the plea agreement, prosecutors agreed not to prosecute his wife for the role she allegedly played in the scheme.

Assistant U.S. Attorney Alan M. Salsbury said Shu’s conviction was the result of an ongoing FBI investigation, but he declined further comment after the hearing.

Federal authorities in recent years have prosecuted more than a dozen cases of either traditional spying or economic espionage related to China. U.S. officials have warned in the past year of increasing espionage efforts by Beijing.

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