DOJ declines to prosecute firm that self-reported employee’s export violations to China
The US Department of Justice (‘DOJ’) has declined to prosecute Universities Space Research Association (‘USRA’) for export control violations committed by its former employee, after the company promptly self-disclosed the criminal conduct and provided extraordinary cooperation with investigators.
USRA discovered that programme administrator Jonathan Soong had unlawfully exported US Army-developed aviation software to Beijing University of Aeronautics and Astronautics (‘Beihang University’), which was on the Commerce Department’s restricted Entity List due to its involvement in military rocket and unmanned aerial vehicle development.
‘A criminal who compromised our national security was brought to justice because his employer caught him and immediately turned him in,’ said Sue J Bai, head of the Justice Department’s National Security Division. ‘We decline to prosecute his employer and are ready to work together with such responsible corporate actors who are committed to joining us in this fight.’
According to court documents, Soong knowingly circumvented export controls by using an intermediary to conceal the transfers, while simultaneously embezzling tens of thousands of dollars by directing software licence payments to his personal account.
USRA self-reported the violations to the National Security Division within days of discovery, before completing its own internal investigation. The company’s cooperation included proactively identifying and providing relevant evidence, including foreign-language materials and overseas documentation.
The company also took remedial actions, disciplining a supervisor who failed to properly oversee Soong, strengthening its compliance programme, and compensating the government for embezzled funds as well as time Soong spent on criminal activities rather than performing contracted duties.
Soong has pleaded guilty to willfully violating the Export Administration Regulations and was sentenced to 20 months in prison.
This marks only the second time the National Security Division has exercised its discretion to decline prosecution under its Enforcement Policy for Business Organisations, which creates a presumption of non-prosecution when companies voluntarily self-disclose violations, fully cooperate, and implement appropriate remediation.
