OKLAHOMA CITY (CN) — A Chinese American chemistry professor at the University of Oklahoma was sentenced Thursday morning to 27 months in federal prison for putting millions of dollars in federal research grants towards personal credit card debt, a car and travel around the world.
U.S. District Judge Scott Palk, an appointee of Donald Trump, sentenced Shaorong Liu, 60, of Norman, after a day-long sentencing hearing on Wednesday. Liu was also ordered to pay $2.1 million in restitution and a $10,000 fine.
Liu was dressed in a black suit and red-striped tie, occasionally whispering with his team of four defense attorneys. Approximately 12 relatives and supporters of Liu sat in the gallery.
He faced a maximum of five years in federal prison and fines of up to $250,000. He was indicted in 2020 with his wife, Juan Lu, 59, of Norman, on a charge of conspiracy to commit wire fraud that carried a maximum penalty of up to 20 years in federal prison. They each pleaded guilty in 2021 to a lesser charge of making materially false statements to the U.S. Department of Energy.
The couple were charged under the Trump-era China Initiative that investigated scientific researchers and academics with alleged affiliations to China or the Chinese Communist Party. Launched by then-U.S. Attorney General Jeff Sessions in 2018, the program was intended to stop the theft of American technology and intellectual property by the Chinese government. Liu and Lu are not explicitly accused of stealing technology for China.
Prosecutors said the couple formed a company called MicroChem Solutions that received $2.1 million in grants between 2011 and 2016 from the Energy Department’s Small Business Technology Transfer program.
“For example, a vehicle was purchased from a Toyota dealership for $37,448 and more than $213,000 in credit card bills were paid,” the 15-page criminal complaint stated. “DOE funds were used to pay for travel that was not approved by DOE to multiple international destinations, such as Australia, China, Canada, the Netherlands, Spain, Japan, Turkey and Malaysia.”
Prosecutors claim the personal charges include trips to the doctor, department stores, gun ranges, dog kennels, opera houses and stadiums, as well as spending on iTunes and Chinese television programming. They claim Liu submitted false expense breakdowns of incurred expenses by category.
“For example, in December 2016 and 2017 respectively, Liu submitted a certification to DOE that $674,878 and later $714,878 of DOE funds had been expended to pay for an OU subcontract,” the criminal complaint stated. “MCS subcontract invoices obtained from OU on June 15, 2018, totaled $354,587.22 for the DOE subcontract.”
Assistant U.S. Attorney William Farrior told the judge Liu failed to disclose to Energy Department auditors an earlier position he held with a university in China. Farrior also questioned whether Liu was accepting sufficient responsibility with his guilty plea, citing a GoFundme campaign launched by third parties to help with paying for his defense amid claims of targeting.
“[They] claim he is being discriminated against based on his race … that he is being ‘treated like a criminal,’” Farrior said.
Defense attorney Mayling Blanco, with Norton Rose in New York, rebutted that Liu cannot be held responsible for statements made by third parties regarding his case. She disputed prosecution arguments that consulting relationships are the same as employment relationships regarding sentencing, stating the two are not viewed the same amongst academics such as her client and that Liu referred to each designation differently in trying to be cooperative and honest to federal agents interviewing him.
Defense attorneys entered a formidable 49 objections to the case’s presentence report before Liu was sentenced. The report is prepared by federal probation officers and contains information about the crime and the defendant’s personal background and criminal history to help the judge reach a fair sentence.
The University of Oklahoma declined to comment Wednesday on Liu’s sentencing or his current employment status, citing a policy of not commenting on pending litigation. A tenured professor, Liu is still listed as faculty on the Department of Chemistry and Biochemistry’s website. His wife was listed as an affiliate research scientist at the department at the time of her indictment, but her current employment status is unknown.
The civil rights group Asian Americans Advancing Justice published a letter shortly after Liu and Lu’s indictment purportedly written by their daughter, Di Liu, that describes the family’s hardship since the indictment, including the sale of their suburban home and belongings to pay legal bills.
“My father’s university immediately put him on leave, banning his students from contacting him, returning all his grants, and revoking his access to buildings on campus, without even allowing him to collect his things first,” the letter stated. “My parents aren’t allowed to talk about their case with anyone, including me.”
The letter criticizes the prosecution of Liu and Lu under the China Initiative as a “policy born out of xenophobia masquerading as security” that harms U.S. interests. The Biden administration ended the program in 2022, stating it would continue to investigate and prosecute technology theft by China, but does not want to feed into misconceptions that unfairly label Chinese Americans as disloyal to the United States.
“My parents have lived here in the U.S. for most of their lives,” the letter stated. “They are proud American citizens. They are not spies. They are academics who have committed their lives to improving life for everyone.”
The China Initiative has produced mixed results for the Justice Department so far. Yi-Chi Shih, 68, of Hollywood Hills, California, was sentenced in 2021 to 63 months in federal prison for taking semiconductor chips with military applications to China without proper authorization and for misleading authorities about the nature and size of his assets in China. Shih was an adjunct professor of electrical engineering at the University of California, Los Angeles.
Federal prosecutors dropped charges in 2022 against Gang Chen, 59, of Cambridge, Massachusetts. A mechanical engineering professor at the Massachusetts Institute of Technology, Chen was accused of lying about working for the Chinese government while receiving U.S. grants for nanotechnology research.
Naturalized American citizen Shannon You, 60, of Lansing, Michigan, was sentenced in 2022 to 14 years in federal prison on charges of economic espionage, possession of stolen trade secrets, conspiracy and wire fraud. Prosecutors claim the former Coca-Cola Company employee offered to bring back to her native China technology for a BPA-free aluminum soda can liner that cost nearly $120 million to develop in exchange for grants from China. You’s attorneys filed an appeal with the Sixth Circuit in Cincinnati last week, claiming anti-Asian testimony from several expert witnesses at her trial during the height of the Covid-19 pandemic should result in a mistrial.
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