Former Chinese National Guilty of Economic Espionage

A Chinese native and resident of Cupertino, California, Xiaodong Sheldon Meng aged 42, has pleaded guilty to violating the Foreign Economic Espionage Act, the Arms Export Control Act (AECA and the International Traffic in Arms Regulations.

He pleaded guilty to two counts of an indictment that was filed back on December 13, 2006.

He pleaded guilty to Count Five of the indictment under which Meng was charged with violating the EEA by having in his possession a trade secret that legally belonged to Quantum3D, a San Jose company where he had been employed 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 is called Mantis and is a product that is used to simulate motion for military training. The defendant installed a demo unit of Mantis on the PRC Navy site. He also altered it to make it appear it belonged to his new employer, ORAD, which is a competitor of Quantum3D and based in the PRC.

The other count he pleaded to, Count Seven charges that he knowingly and willfully violated the AECA and ITAR by exporting the "viXsen" source code, a Quantum 3D product that is a designated defense article on the United States Munitions List, IN order to do this, Meng would have had to have a Department of State export license and he did not. viXsen is a visual simulation software program that is used for training military fighter pilots.

Quantum3D, Inc. has cooperated fully with the government's investigation.

Meng is scheduled to be sentenced on January 23, 2008, at 10:00 a.m. He is currently out on bail on a $500,000 bond.

Because he pleaded guilty and entered into a plea agreement , the maximum term of imprisonment he can be sentenced to is 24 months. Meng can also be ordered to pay a fine of up to $500,000 on the Economic Espionage Act conviction and an additional fine of up to $1,000,000 on the Arm Export Control Act conviction, plus a three-year term of supervised release.

This is the result of a join investigation that took almost three years to complete. It involved the cooperation of many different law enforcement agencies including 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, Customs & Border Protection (C.P.). The Department of State and the Department of Defense

Source: FBI http://sanfrancisco.fbi.gov/