Businessman Sentenced For Supplying Indian Government With Controlled Technology

Parthasarathy Sudarshan, 47, the owner of an international electronics business, was sentenced
in the District of Columbia to 35 months in prison for his role in a conspiracy to illegally export controlled electronic components to government entities in India that participate in the development of ballistic missiles, space launch vehicles, and fighter jets.

That's according to federal law enforcement officials.

On March 13, Sudarshan, a resident of Simpsonville, S.C., pleaded guilty in the U.S. District Court for the District of Columbia to the felony charge of conspiracy to violate the International Emergency Economic Powers Act and the Export Administration Regulations; and to violate the Arms Export Control Act and the International Traffic in Arms Regulations. Sudarshan was sentenced today by the Honorable Ricardo Urbina.

According to court documents filed by the government, Sudarshan did business as Cirrus Electronics and held himself out to be Cirrus' CEO, Managing Director, and President and Group Head. Cirrus has offices in Simpsonville, South Carolina, Singapore, and Bangalore, India.
Among the recipients of U.S. technology in this case were the Vikram Sarabhai Space Centre (VSSC), an enterprise within the Department of Space of the Government of India, and Bharat Dynamics, Ltd. (BDL), an enterprise within the Ministry of Defence of the Government of India.

The U.S. government has determined that VSSC participates in India's space launch vehicle program and that BDL participates in India's development and production of ballistic missiles. As such, both VSSC and BDL are on the Department of Commerce's Entity List and exports of
U.S.-origin commodities to these entities are restricted and require prior authorization in the form of a license from the Department of Commerce.

Between 2002 and 2006, Sudarshan acquired electrical components with applications in missile guidance and firing systems in the United States for VSSC and BDL. In particular, in the case of at least two U.S. vendors, Sudarshan and others at Cirrus provided the U.S. companies with fraudulent certificates that claimed that the end-users of these electrical components
were non-restricted entities in India, when, in fact, the items were for VSSC. There were no export licenses for any of the shipments to VSSC and BDL. To further conceal from the U.S. government that goods were going to entities in India on the Department of Commerce Entity List, Sudarshan would route the products through its Singapore office and then send the
packages on to India.

In addition to supplying VSSC and BDL with components, Sudarshan acquired microprocessors for the Tejas, a fighter jet under development in India. The microprocessors were necessary for the navigation and weapons systems of the Tejas. Because the microprocessors are on the U.S. Munitions List, the State Department must license any export of the products. On two
occasions in 2004 and 2006, Cirrus caused the shipment of a total of 500 microprocessors to the Aeronautical Development Establishment, an enterprise within the Ministry of Defence of the government of India responsible for the development of the Tejas. There were no licenses for
these shipments.

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Justice Dept. Gets First Conviction On Illegal Source Code Exports

Xiaodong Sheldon Meng, 42, formerly a resident of Beijing, China, and resident of Cupertino, Calif., has pleaded guilty to violating the Foreign Economic Espionage and violating the Arms Export Control Act (AECA) and theInternational Traffic in Arms Regulations (ITAR), federal law enforcement officials say.

The defendant entered into a plea agreement whereby he pleaded guiltyto Count Five (EEA) and Count Seven (AECA) of a superseding indictment thathad 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 aforeign government, instrumentality, or agent, namely the People's Republic of China ("PRC") Navy Research Center, the U.S. Justice Department says.

The trade secret at issue, known as "Mantis," is a Quantum3D productused 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 willfullyviolated the AECA and ITAR when he exported "viXsen" source code, a Quantum3D product that is a designated defense article on the United StatesMunitions List, and for which Meng had no Department of State exportlicense. viXsen is a visual simulation software program used for trainingmilitary fighter pilots.

U.S. Attorney Scott Schools notes that this prosecution isthe result of a nearly three-year joint investigation by the U.S.Attorney's Office Computer Hacking and Intellectual Property (CHIP) Unit, the FBI, the Department of Homeland Security, Immigration and Customs Enforcement (ICE) -- Office of Investigations, as well as Customs & Border Protection (CBP).

"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," says U.S. Assistant Attorney General for National Security Kenneth 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."

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