FORMER L-3 WORKER CONVICTED OF EXPORTING MILITARY TECHNOLOGY

(The following is a reformatted version of a press release
issued by the United States Attorney for the District of New
Jersey and received via e-mail. The release was confirmed by the
sender.) 
SEPTEMBER 26, 2012 
FORMER EMPLOYEE OF NEW JERSEY DEFENSE CONTRACTOR CONVICTED OF
EXPORTING SENSITIVE MILITARY TECHNOLOGY TO CHINA 
Stole Trade Secrets from Morris County, N.J., Company 
NEWARK, N.J. - A federal jury today convicted a
former employee of a New Jersey-based defense contractor of
exporting sensitive U.S. military technology to the People’s
Republic of China (PRC), stealing trade secrets and lying to
federal agents, U.S. Attorney Paul J. Fishman announced. 
Sixing Liu, aka, “Steve Liu,” 49, a PRC citizen who
had recently lived in Flanders, N.J., and Deerfield, Ill., was
taken into custody following the verdict, based on risk of
flight considerations.  Sentencing before U.S. District Judge
Stanley R. Chesler is scheduled for Jan. 7, 2013. 
“The jury found that in order to promote himself,
Liu took highly sensitive defense information and trade secrets
to China, violating the rules of his company and the laws of
this country, and then lied about it upon his return to the
United States,” U.S. Attorney Fishman said.  “We will not
tolerate the exploitation of this country’s opportunities
through the theft of our secrets.” 
“This specific investigation is troubling on many
levels,” FBI Special Agent in Charge Michael B. Ward said. “Mr.
Liu helped develop technology critical to our military, then
took a computer with that information on an unauthorized trip to
China to present at a conference sponsored by the Chinese
government.  The United States spends billions of dollars each
year on research and development, and this ‘intellectual
capital’ is very attractive to others.  If they are able to
acquire this research, they can save billions and quickly
develop their own products to compete against the United States,
be it in the world economic market or on the battlefield.” 
“Exporting military weapons and technical data and the theft of
sensitive technology in violation of the Arms Export Control Act
are serious crimes with global consequences,” Andrew McLees,
special agent in charge of Immigration and Customs Enforcement,
Homeland Security Investigations (ICE-HSI) in Newark, said.
“Illegal foreign procurement networks continue to threaten our
safety and this conviction reinforces that HSI has no tolerance
for those who try to undermine our nation’s safety and
security.” 
“This arrest demonstrates the determination of
Customs and Border Protection’s frontline officers, who work
closely with our law enforcement partners to safeguard the
American public from potential threats,” Robert E. Perez,
Director Field Operations, for CBP New York, said. 
The jury convicted Liu of nine of the 11 counts in
the Second Superseding Indictment with which he was charged,
including six counts of violating the Arms Export Control Act
and the International Traffic in Arms Regulations, one count of
possessing stolen trade secrets in violation of the Economic
Espionage Act of 1996, one count of transporting stolen property
in interstate commerce, and one count of lying to federal
agents.  The jury acquitted Liu on two counts of lying to
federal agents. 
According to documents filed in the case and
evidence presented at trial: 
In 2010, Liu stole thousands of electronic files
from his employer, L-3 Communications, Space and Navigation
Division, located in Budd Lake, N.J.  The stolen files detailed
the performance and design of guidance systems for missiles,
rockets, target locators, and unmanned aerial vehicles.  Liu
stole the files to position and prepare himself for future
employment in the PRC.  As part of that plan, Liu delivered
presentations about the technology at several PRC universities,
the Chinese Academy of Sciences, and conferences organized by
PRC government entities.  However, Liu was not charged with any
crimes related to those presentations. 
On Nov. 12, 2010, Liu boarded a flight from Newark
Liberty International Airport to the PRC.  Upon his return to
the United States on Nov. 29, 2010, agents found Liu in
possession of a non-work-issued computer found to contain the
stolen material.  The following day, Liu lied to agents of the
Department of Homeland Security about the extent of his work on
U.S. defense technology, which the jury found to be a criminal
false statement. 
The U.S. Department of State’s Directorate of
Defense Trade Controls later verified that several of the stolen
files on Liu’s computer contained 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. 
The jury heard testimony that Liu’s company trained
him about the United States’ export control laws and told him
that most of the company’s products were covered by those laws. 
After the verdict, Judge Chesler ordered Liu taken
into custody, citing the penalties Liu faces, his ties to the
PRC, and the lack of an extradition treaty with the PRC, among
other reasons. 
Liu faces the following maximum penalties, per
count: 
·         Export violations - 20 years in prison, $1 million
fine 
·         Stolen trade secrets violation - 10 years in prison,
$250,000 fine 
·         Interstate transportation of stolen property - 10
years in prison, $250,000 fine 
·         False statement - five years in prison, $250,000 fine 
U.S. Attorney Fishman credited special agents of the FBI, under
the direction of Special Agent in Charge Ward; special agents of
ICE-HSI under the direction of Special Agent in Charge McLees;
and officers of CBP, under Director of Field Operations Perez,
for the investigation leading to today’s verdict. 
The government is represented by Assistant U.S. Attorney L.
Judson Welle of the U.S. Attorney’s Office’s National Security
Unit and Assistant U.S. Attorney Gurbir S. Grewal of the U.S.
Attorney’s Office’s Economic Crimes Unit, both in Newark.  The
prosecution received valuable support from attorneys of the U.S.
Department of Justice’s National Security Division,
Counterespionage Section. 
CONTACT:
MATTHEW REILLY
(973) 645-2888
www.justice.gov/usao/nj/ 
(sgp) NY 
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