DOJ Declines Prosecution of USRA in Export Control Case: A Model for Corporate Self-Disclosure
2 May 2025
In a significant development for corporate compliance and cooperation in national security matters, the U.S. Department of Justice (DOJ) recently declined to prosecute the Universities Space Research Association (USRA) for export control violations committed by a former employee. This case offers valuable insights into how companies can effectively navigate potential criminal exposure through timely self-disclosure, cooperation, and remediation.
The Case Background
According to a declination letter dated April 23, 2025, the DOJ's National Security Division and the U.S. Attorney's Office for the Northern District of California chose not to prosecute USRA despite evidence of criminal wrongdoing by one of its employees, Jonathan Soong.
Soong, a program administrator at USRA, was found to have willfully facilitated the sale and export of flight control and optimization software subject to the Export Administration Regulations (EAR) to Beijing University of Aeronautics and Astronautics (Beihang University) in China between April 2017 and September 2020. Beihang University was on the Commerce Department's Entity List due to its involvement in developing military rocket systems and unmanned air vehicle systems, meaning exports to this institution required a specific license from the Department of Commerce.
In addition to these unauthorized exports, Soong also embezzled approximately $161,000 in software license sales by directing purchasers to make payments to his personal account. When NASA and USRA began investigating sales to Chinese purchasers, Soong initially lied and fabricated evidence suggesting he had conducted proper due diligence.
Soong pleaded guilty to these violations in January 2023 and was sentenced to a term of incarceration in April 2023.
Why the DOJ Declined Prosecution
The DOJ's decision not to prosecute USRA was based on several factors outlined in the National Security Division (NSD) Enforcement Policy for Business Organizations and the Principles of Federal Prosecution of Business Organizations:
Timely and Voluntary Self-Disclosure: USRA disclosed the misconduct to the National Security Division less than three months after retaining outside counsel and within days of Soong's admission of wrongdoing, well before completing their internal investigation.
Exceptional Cooperation: The company disclosed all known relevant facts about the misconduct and individuals involved, preserved and collected relevant documents (including overseas and third-party documents), and provided translations where necessary. This cooperation materially assisted the government's prosecution of Soong.
Nature of the Offense: The DOJ considered that there were only four unlicensed exports of software in violation of the EAR, and the software itself was based on information from a publicly available textbook and classified as EAR99 (the lowest level of export control).
Timely Remediation: USRA terminated Soong and disciplined a supervisory employee who failed to properly supervise him. The company significantly improved its internal controls and compliance program and made restitution by repaying $94,000 of Soong's salary to NASA and compensating the U.S. Treasury for the $161,000 embezzled by Soong.
Corporate Lessons and Takeaways
This case highlights several critical lessons for organizations dealing with potential export control or other regulatory violations:
1. The Value of Prompt Self-Disclosure
USRA's decision to self-disclose the violations promptly after discovery was a crucial factor in the DOJ's declination decision. Rather than waiting until its internal investigation was complete, USRA reported the potential violations within days of learning about them.
2. Thorough and Proactive Cooperation
The company's "exceptional and proactive cooperation" included providing all relevant information about the misconduct, preserving and collecting evidence (including overseas documents and translations), and ongoing cooperation throughout the government's investigation.
3. Effective Remediation
USRA not only terminated the employee responsible but also held supervisors accountable, improved its compliance program, and made financial restitution to affected government agencies.
4. Transparency and Accountability
Throughout the process, USRA maintained transparency with investigators and took responsibility for its role in failing to prevent the violations.
The Broader Impact
This case represents only the second time that the National Security Division has exercised its discretion to decline prosecution of a company under the NSD Enforcement Policy. As noted by Sue J. Bai, head of the Justice Department's National Security Division: "If we stay vigilant, all of us — including our citizens, small businesses, and large corporations — can play a critical role in protecting our country."
The DOJ's approach in this case sends a clear message that companies that discover potential violations and respond with prompt self-disclosure, full cooperation, and appropriate remediation can avoid prosecution. This incentive-based approach seeks to encourage corporate vigilance and partnership with government agencies in protecting national security interests.
Conclusion
The USRA case serves as a valuable blueprint for how companies should respond when they discover potential export control or other regulatory violations. By acting quickly, cooperating fully, and remediating comprehensively, organizations can significantly mitigate their potential criminal exposure while assisting the government in holding individual wrongdoers accountable.
For businesses operating in areas subject to export controls or other sensitive regulatory regimes, this case underscores the importance of robust compliance programs, vigilant oversight, and a culture that encourages the prompt reporting and resolution of potential violations.
Link: U.S. DOJ Press Release, 30 April 2025
Patrick Goergen, Founder & CEO, RespectUs. The Export Control Expert & Explainer.
2 May 2025
