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DR. QUAN-SHENG SHU

Case Study. DR. QUAN-SHENG SHU. VEDP – Export Training FCPA. FBI NORFOLK. 04/15/2014. SA Kevin P. Rojek. Export Control Concurrent Jurisdiction. Unclassified. Effective November 15, 2004 the FBI was designated by the Attorney General:

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DR. QUAN-SHENG SHU

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  1. Case Study DR. QUAN-SHENG SHU VEDP – Export Training FCPA FBI NORFOLK 04/15/2014 SA Kevin P. Rojek

  2. Export Control Concurrent Jurisdiction Unclassified Effective November 15, 2004 the FBI was designated by the Attorney General: “…to take charge of investigative work in matters relating to espionage, sabotage, subversive activities, and related matters, including investigating any potential violations of the Arms Export Control Act, the Export Administration Act, the Trading with the Enemy Act, or the International Emergency Economic Powers Act, relating to any foreign counterintelligence matter.” AG Order No. 2738-2004 Unclassified

  3. Unclassified • Dr. Quan-Sheng SHU • AMAC International, Inc. • Plead Guilty in 2009 • 2 x counts AECA • 1 x count FCPA • Sentenced to 51 months Background Unclassified

  4. Unclassified • JAN 2001: Lead from Philadelphia Division informing Norfolk that SMX Corporation was hosting visitors from 3 PRC high tech entities; visits all set up by SHU • JUL 2003: Begin collectingTrash • SEP 2005: Court authorized electronic surveillance initiated on SHU and AMAC International, Inc. • SEP 2006: Begin meeting with U.S. Attorney’s Office • SEP 24, 2008: SHU arrested • NOV 2008: Guilty plea • APR 7, 2009: Sentence: 51 Months Predication & Chronology Unclassified

  5. Unclassified • 22 U.S.C. 2778, Export of Defense Article Without a License (1 Count) • Technical information associated with 100 M3 LH2 Storage Tank • 22 U.S.C. 2778, Export of Defense Service Without a License (1 Count) • Providing assistance in the design, development, assembly, testing or modification of 100 M3 LH2 Tank and related components of fueling system for a foreign launch facility • 15 U.S.C. 78dd-1 & 78dd-2, Bribery of Foreign Official (1 Count) Charges Unclassified

  6. Unclassified Key Evidence - Trash SHU’s Ties to PRC Military “war” crossed out and replaced with “preferred” The specifications are the same with Ariane 5’s Unclassified

  7. Unclassified Electronic Surveillance False End-Users / Support to PLA November 30, 2005: SHU instructed AMAC Beijing Employee C that, in the future, theemployee should make up an end‑user when dealing with the PRC military because of U.S. restrictions on military technology being sent to the PRC. Unclassified

  8. Unclassified Electronic Surveillance Witting Support to PLA "The 101 thing, if, if we said that was for launching satellites, we wouldn't be able to get the 101 deal that's worth three million…you need to find a reason. Everyone hides it… in the end, the manufacturers also help to hide it. The French, also. If you said you wanted to launch, eh, rockets or something, then France won't be able to sell to you…France belongs to the NATO…Let me tell you, that's how the military industry buys things. Right,we've done military industry business." Quote by SHU, April 10, 2007 Unclassified

  9. Unclassified Defense Article 100m3 Liquid Hydrogen Storage Tank Document certified by DOS DDTC as a Defense Article covered by Category IV (h) on the USML Unclassified

  10. Unclassified Defense Article Technical Data Key Evidence Items discovered in Trash Unclassified Original Translation

  11. Unclassified Defense Service Support to Hainan Island “The liquid hydrogen and liquid oxygen will burn…then the missile is launched. This…is for the Lunar Mission Launch Facility on Hainan Island… For use…in the large-scale…lunar landing rockets' launch facility…this project has been established for three years, that is, and we have followed it for three years." Quote by SHU, July 6, 2007 Unclassified

  12. Unclassified Bribery of a Foreign Official Foreign Corrupt Practices Act April 7, 2006: SHU talked to his wife about how to best offer “percentage points” to the 101 Institute Deputy Director (PRC Official C), to induce him to select French Company A for the hydrogen liquefier project. Sheng stressed the importance of communicating to PRC Official C that the "kickbacks" would only go through AMAC and not any third party, there would be no need for a signature or receipt from PRC Official C, and, with that, there would be no trace left behind. Unclassified

  13. Unclassified Bribery of a Foreign Official Foreign Corrupt Practices Act April 7, 2006: SHU called 101 Institute Deputy Director, PRC Official C, and stated that AMAC’s typical practice is to distribute a certain percentage to leaders after the conclusion of a project for the leaders to use for either scientific research or other uses at their discretion. In response, PRC Official C stated that SHU was very thoughtful. Unclassified

  14. Unclassified Bribery of a Foreign Official Foreign Corrupt Practices Act April 8, 2006: SHU told his wife, about his conversation with PRC Official C the previous day. SHU stated that PRC Official C did not refuse SHU's offer. SHU, referencing also the need to call PRC Official D, stated that "the three percent to be shared between the two is pretty solid. . . . More than 40,000 U.S. dollars a person." Unclassified

  15. Unclassified Post Arrest • 40+ hours of debriefings • 10 x IIR’s published to date • Data mining by subject matter experts • Spin off White Collar Crime Investigation Unclassified

  16. Questions? SA Kevin P. Rojek FBI Norfolk (757) 609-2444 kevin.rojek@ic.fbi.gov

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