NEWARK, NJ—A former employee of a New Jersey-based defense contractor was indicted today on additional charges for allegedly misappropriating and exporting sensitive military technology to the People’s Republic of China (PRC), U.S. Attorney Paul J. Fishman announced.
A federal grand jury returned the 11-count superseding indictment charging Sixing Liu, a/k/a, “Steve Liu,” 48, of Deerfield, Ill., and recently of Flanders, N.J., with eight counts of exporting defense-related technical data without a license, one count of transporting stolen goods across state lines, and two counts of making false statements to law enforcement agents. The original Indictment against Liu, filed in April 2011, contained one export control charge and two false statements charges.
An arraignment has been scheduled for September 14, 2011, before U.S. District Judge Stanley R. Chelser in Newark federal court.
Liu was arrested on March 8, 2011, at his residence by special agents of the FBI and the U.S. Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations (HSI). Following his transfer to New Jersey, Liu was ordered released on a $750,000 appearance bond with the condition that he be confined to his home in Deerfield.
According to the superseding indictment filed today:
Liu, a national of the People’s Republic of China who has permanent legal resident status in the United States, worked for Space & Navigation, a division of L-3 Communications, from March 2009 through November 2010 as a senior staff engineer. Liu, who holds a doctoral degree in electrical engineering, was part of a research and development team that worked on navigation and positioning devices used in artillery and missile systems by the U.S. Department of Defense (DoD). Liu was never issued a company laptop or approved to access or possess the company’s work product outside of its New Jersey facility.
On November 12, 2010, Liu boarded a flight from Newark Airport to the PRC. Upon his return from the PRC on November 29, 2010, U.S. Customs and Border Protection (CBP) officers found Liu to be in possession of a non-work-issued computer that was later found to contain numerous L-3 Communications’ documents relating to those systems.
While in the PRC, Liu gave presentations at several universities, a PRC government research entity, and a PRC-government-organized conference. Liu’s presentations related to technology that he and his co-workers at Space & Navigation were developing for DoD. Although listed as a representative of the company on the conference’s website, Liu never sought the company’s approval to deliver the presentation, which was contrary to the company’s security rules. In fact, Liu told one senior employee of the company before leaving for the trip that he was going to Chicago on vacation.
Liu also made false statements upon his return to the United States to HSI agents about the purpose of his travel to China and the extent of his work on projects for DoD.
In March 2011, law enforcement agents searched Liu’s residence in Deerfield. During the search, agents discovered a binder containing numerous proprietary documents relating to a munitions project that Liu had worked on while at the company—including schematics, formulas, simulation software coding, and set-up instructions—that he had taken from the company’s New Jersey facility.
The U.S. Department of State’s Directorate of Defense Trade Controls verified that the information on Liu’s computer is export-controlled technical data that relates to defense items listed on the United States Munitions List (USML). Under federal regulations, items and data covered by the USML may not be exported without a license, which Liu did not obtain. The regulations also provide that it is the policy of the United States to deny licenses to export items and data covered by the USML to countries with which the United States maintains an arms embargo, including the PRC.
As early as April 2009, the company provided training to Liu regarding export control laws. Numerous documents that Liu possessed on the non-work-issued computer were prominently marked as containing sensitive proprietary company information and/or export controlled technical data.
If convicted, Liu faces a maximum potential penalty of 20 years in prison and a $1 million fine for each of the export violations. If convicted of the interstate transportation of stolen goods violation, Liu faces a maximum potential penalty of 10 years in prison and a $250,000 fine. The false statements charges each carry a maximum potential penalty of five years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the Newark offices of the FBI, under the direction of Special Agent in Charge Michael B. Ward, and HSI, under the direction of Acting Special Agent in Charge Andrew M. McLees—as well as CBP, under the leadership of Director of New York Field Operations Robert E. Perez—for their investigation of the case. He also thanked special agents of the FBI and HSI in Chicago for their assistance.
The government is represented by Assistant U.S. Attorney L. Judson Welle of the U.S. Attorney’s Office National Security Unit in Newark.
The charges and allegations contained in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: James D. Tunick Esq., Chicago