Defense Contractor Charged with ITAR Violations

On March 4, 2011, Sixing "Steve" Liu was indicted with illegally exporting technical data in violation of the International Traffic in Arms Regulations (ITAR) without the required Department of State, Directorate of Defense Trade Controls (DDTC) license. 

The complaint alleges that Liu, a 47-year-old Chinese national who is a permanent resident of the U.S, was detained by the U.S. Customs officials on November 29, 2010, at Newark Liberty International Airport when he was returning from China. 

At the time Liu was detained, he worked as a senior staff engineer for a New Jersey-based division of a technology company (Company) that develops precision navigation devices and other innovative components for the U.S. Department of Defense (DoD). Due to highly sensitive nature of the technology projects developed at the Company where Liu worked, most employees, including Liu, were forbidden from removing work product from the Company's corporate facility. 

On November 29, 2010, Liu arrived at Newark Liberty International Airport on a commercial airline flight from Shanghai and was selected for secondary inspection by Customs officers. When asked, Liu stated that the only purpose of his visit to China was to visit his family. An inspection of Liu's baggage revealed an access card that had "ICMAN 2010, The 4th Annual International Workshop on Innovative and Commercialization of Micro & Nano Technologies, November 22-24, 2010" inscribed on it. Liu explained that it was a small conference that was not formal. 

Investigation of ICMAN by the FBI revealed that the annual conference is organized and sponsored by various Chinese government entities. Its stated goal is to "gather people related with micro and nanotechnologies from all over the world, including the renowned researchers in the field, chief administrators and senior engineers from industries, research agencies and inventors, as well as venture capital and government representatives." 

The FBI also discovered that the schedule of events for the ICMAN 2010 forum included presentations and remarks given by China's government entities. Liu was one of the presenters as well as the co-chair for ICMAN 2010. 

Upon inspection of Liu's belongings on November 29, 2010, Customs officers found a folder containing multiple pages of technical language, pictures of military weapons systems, and documents written in Chinese. Liu also had a non-Company issued laptop computer and other electronic storage devices and media, which contained hundreds of documents belonging to the Company he worked for, including internal communications, analyses, data, test results, schematics, images, and security protocols. 

Numerous documents on Liu's computer included prominent markings indicating that the contents contain export-controlled technical data under the Arms Export Control Act (AECA) and ITAR. One such documents is titled "Summary of Simulation Analysis for [Technology Program No. 1]" and pertains to a precision navigation/positioning system that the company where Liu worked, developed for the DoD. Each page of the documents is prominently marked "ITAR Controlled." 

On February 10, 2011, the DDTC certified that the document contains technical data that is covered by the USML Category XII. Accordingly, export of that document from the U.S. to China is prohibited by any person who is unlicensed to do so.