WASHINGTON, Aug. 2 /PRNewswire-USNewswire/ -- Xiaodong Sheldon Meng , 42, formerly a resident of Beijing , China , and resident of Cupertino, Calif., pleaded guilty yesterday to violating the Foreign Economic Espionage and violating the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR), announced Assistant Attorney General for National Security Kenneth L. Wainstein and Scott N. Schools U.S. Attorney for the Northern District of California.
The defendant entered into a plea agreement whereby he pleaded guilty to Count Five (EEA) and Count Seven (AECA) of a superseding indictment that had been filed on December 13, 2006 .
Count Five charged that Meng violated the EEA by possessing a trade secret belonging to Quantum3D, a San Jose company by whom he was formerly employed, intending and knowing that this possession would benefit a foreign government, instrumentality, or agent, namely the People's Republic of China ("PRC") Navy Research Center.
The trade secret at issue, known as "Mantis," is a Quantum3D product used to simulate real world motion for military training purposes. Meng installed a demonstration unit of Mantis on the PRC Navy site. Meng also altered Mantis to make it appear as if it belonged to ORAD, Meng's new employer, a competitor of Quantum3D based in PRC. This altered version of Mantis was included as part of the demonstration project in the PRC.
Count Seven charged that defendant Meng knowingly and willfully violated the AECA and ITAR when he exported "viXsen" source code, a Quantum 3D product that is a designated defense article on the United States Munitions List, and for which Meng had no Department of State export license. viXsen is a visual simulation software program used for training military fighter pilots.
United States Attorney Scott N. Schools noted that this prosecution is the result of a nearly three-year joint investigation by the U.S. Attorney's Office Computer Hacking and Intellectual Property (CHIP) Unit, the Federal Bureau of Investigation (FBI), the Department of Homeland Security, Immigration and Customs Enforcement (ICE) -- Office of Investigations, as well as Customs & Border Protection (CBP). The Department of State and the Department of Defense also provided valuable assistance on the case.
"This conviction, the first in the nation for illegal exports of military- related source code, demonstrates the importance of safeguarding our nation's military secrets and should serve notice to others who would compromise our national security for profit," said Assistant Attorney General for National Security Kenneth L. Wainstein. "This case is the latest evidence of the Department's enhanced investigative and prosecutorial efforts to keep America's critical technology from falling into the wrong hands."
"One of ICE's top priorities is ensuring that U.S. military products and sensitive technology does not fall into the hands of those who might inflict harm upon America or its allies," said Julie L. Myers, Department of Homeland Security Assistant Secretary for ICE. "These items, such as the proprietary source code stolen and altered by the defendant in this case, are controlled in the interest of national security. We will continue to work with our law enforcement partners and industry to enforce U.S. technology export laws."
"The economic -- and often national -- security of the United States rests largely upon a foundation of technological superiority, and to maintain that superiority our trade secrets must be protected with the fervency with which we guard other vital interests," said Charlene B. Thornton, special agent in charge of the FBI's San Francisco office. "The successful prosecution of Mr. Meng is a blow to those who seek to circumvent the long and costly process of research and development to gain a technological advantage through lies, deceit, and theft; it is a victory in the struggle to ensure the economic security of Silicon Valley and the United States ."