Xiaodong Sheldon Meng has pled guilty in the United States to violating the Economic Espionage Act and violating the Arms Export Control Act and the International Traffic in Arms Regulations when he reportedly took software from the U.S. to China.

United States Assistant Attorney General for National Security Kenneth L. Wainstein and U.S. Attorney for the Northern District of California Scott N. Schools made the announcement. Meng entered into a plea agreement whereby he pleaded guilty to Count Five and Count Seven of a superseding indictment that had 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 the People's Republic of China Navy Research Center.

The trade secret at issue, known as "Mantis," is a Quantum3D product used to simulate real world motion for military training purposes. Meng reportedly installed a demonstration unit of Mantis on the Chinese Navy site. Meng also reportedly 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.

Under the terms of the plea agreement, the maximum term of imprisonment is twenty-four months. Meng also is subject to a maximum fine of US$500,000 on the Economic Espionage Act conviction and a maximum fine of US$1 million on the Arm Export Control Act conviction, and a three-year term of supervised release.