Virginia Physicist Shu
Quan-Sheng Arrested for Illegally Exporting Space Launch Data to China
and Offering Bribes to Chinese Officials
Sept. 24, 2008
physicist in Newport News, Va., was arrested on charges of illegally
exporting space launch technical data and services to the People’s
Republic of China (PRC) and offering bribes to Chinese government
The arrest was announced today by Chuck Rosenberg, U.S. Attorney for the
Eastern District of Virginia; Patrick Rowan, Acting 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 PhD physicist, was arrested in Newport News by FBI agents. Shu is
the President, Secretary and Treasurer of AMAC International (“AMAC”), a
high-tech company located in Newport News. AMAC International also has
an office in Beijing, China. Shu made his initial appearance earlier
today in U.S. District Court for the Eastern District of Virginia,
Shu is charged in a criminal complaint with unlawfully exporting a
defense service to foreign persons without prior approval, in violation
of the Arms Export Control Act; unlawfully exporting a defense article
in violation of the Arms Export Control Act; and bribing, offering a
bribe, and attempting to bribe a foreign government official, in
violation of the Foreign Corrupt Practices Act (FCPA). Shu faces a
possible sentence of 10 years in prison for each violation of the Arms
Export Control Act, and five years in prison for violating the FCPA.
According to the complaint, beginning in or around January 2003, Shu
provided technical assistance and foreign technology acquisition
expertise to several PRC government entities involved in the design,
development, engineering and manufacture of a space launch facility in
the southern island province of Hainan, PRC. This facility 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.
Among those PRC government entities involved in the space launch
facility in Hainan 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. The Beijing Special Engineering
Design Research Institute (BSEDRI) is the governmental entity
responsible for the procurement of cryogenic liquid storage tanks for
the Hainan launch facility
According to the complaint, Shu has been involved in the PRC's
systematic effort to upgrade their space exploration and satellite
technology capabilities by providing technical expertise and foreign
technology acquisition in the fields of cryogenic pumps, valves,
transfer lines and refrigeration equipment, components critical for the
use of liquefied hydrogen in a launch facility. Shu has also been
instrumental in arranging for PRC officials to visit various European
space launch facilities and hydrogen production/storage facilities.
Shu's efforts include the successful brokering of a January 2007
contract between the PRC’s 101 Institute and a French company for the
production and supply of a 600 liter per hour hydrogen liquefier. This
liquefier will be part of the 101 Institute's comprehensive research,
development, and test base for liquid-propelled engines and space
vehicle components, and at the time, the liquefier represented the first
in as many as five additional projects to be undertaken by AMAC and the
French company, all to be used as ground-based support for the launch
vehicles at the Hainan launch facility.
Shu is accused of illegally exporting technical data related to the
design and manufacture of a “Standard 100 M3 Liquid Hydrogen (LH) 2
Tank,” and illegally providing assistance to foreign persons in the
design, development, assembly, testing or modification of the “Standard
100 M3 LH2 Tank” and related components of fueling systems for a foreign
launch facility. At no time during this period did Shu have the required
licenses or written approvals with respect to brokering, export of
defense articles, or proposals to provide defense services to the PRC.
The complaint also alleges that Shu offered bribes to government
officials with the PRC’s 101 Institute to induce the award of the
hydrogen liquefier project to the French company Shu represented.
According to the complaint, on Dec. 1, 2003, Shu and his company AMAC
entered into an agreement with the French company establishing AMAC and
Shu as the French company’s representative in China. The agreement
provided that AMAC was entitled to a success fee of ten to fifteen
to the complaint, prior to the ultimate decision to award the hydrogen
liquefier project to the French company in January 2007, Shu offered
payments to PRC officials within the 101 Institute to induce those
officials to award the contract to the French company rather than a
competitor and to earn Shu and AMAC a commission. The contract value for
the hydrogen liquefier is believed to total approximately $4 million,
according to the complaint.
This investigation was conducted by the Federal Bureau of Investigation
(FBI), with assistance from U.S. Immigration and Customs Enforcement
(ICE), and the U.S. Department of Commerce, Office of Export
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.
The public is reminded that the charges in a criminal complaint are mere
allegations and that defendants are presumed innocent unless and until
proven guilty in a court of law.