Questions from the NASA contracting officer about certain purchases under a contract between the agency and our client, Universities Space Research Association (USRA), led the company to engage us to conduct an internal investigation.
That investigation ultimately uncovered the fact that a USRA employee in charge of a program to sell national security-sensitive aviation software to domestic and foreign customers (1) knowingly exported that software to a Chinese company with ties to that country’s military without first obtaining a Commerce Department license to do so; (2) fabricated screening records to make it appear as though the company was not under US export restrictions; (3) conspired with Chinese nationals to fabricate invoices and shipping records to make it appear as though the purchaser and end user of the software was a different Chinese entity not subject to any such export restrictions; and (4) embezzled from USRA tens of thousands of dollars in software sales proceeds.
These discoveries prompted us to make a mandatory self-disclosure to NASA’s Office of Inspector General (NASA OIG), and voluntary self-disclosures to the Bureau of Industry and Security in the Commerce Department (BIS), the Office of Foreign Asset Controls in the Treasury Department (OFAC), and the National Security Division (NSD) of the Justice Department (DOJ). Based on our advice and counsel, USRA proactively took remedial steps to lessen the chances of a recurrence of such criminal misconduct, including new and revised policies, procedures, protocols, training programs and internal controls, and the company facilitated DOJ’s prosecution of the employee at issue, Jonathan Soong, who is now serving time in a federal prison for his crimes. NASA OIG has taken no action; BIS and OFAC closed their files by issuing formal “no action” letters; and, per its press release citing the company’s “exceptional and proactive cooperation,” the DOJ declined to prosecute USRA, only the second declination issued by NSD since the inception of its voluntary self-disclosure policy in 2019.