Hawaii Man Convicted of Providing Defense Information and Services to People’s Republic of China
Former B-2 Bomber Engineer Helped PRC Design a Stealthy Cruise Missile

WASHINGTON—A federal jury in U.S. District Court for the District of Hawaii today found Noshir S. Gowadia, age 66, of Maui, guilty of five criminal offenses relating to his design for the People’s Republic of China (PRC) of a low signature cruise missile exhaust system capable of rendering a PRC cruise missile resistant to detection by infrared missiles. The jury also convicted Gowadia of illegally communicating classified information on three other occasions and unlawfully exporting technical information on those three occasions, illegally retaining defense information, and filing false tax returns for the years 2001 and 2002. The jury acquitted Gowadia of three other offenses alleging illegal communication of information to the PRC.

The verdict was announced by David Kris, Assistant Attorney General for National Security, and Florence T. Nakakuni, U.S. Attorney for the District of Hawaii. The verdict followed six days of deliberation and a 40-day trial in the District of Hawaii.

“Mr. Gowadia provided some of our country’s most sensitive weapons-related designs to the Chinese government for money. Today, he is being held accountable for his actions. This prosecution should serve as a warning to others who would compromise our nation’s military secrets for profit. I commend the many prosecutors, analysts, and agents—including those from the FBI and the Air Force—who were responsible for this investigation and prosecution,” said Assistant Attorney General Kris.

“The United States entrusts people with important and sensitive information critical to our nation’s defense. Today’s verdict demonstrates that there is a serious consequence to betraying that trust,” said U.S. Attorney Nakakuni.

“The FBI will continue to pursue anyone who treats America’s national security as a commodity to be sold for personal enrichment,” said Charlene Thornton, Special Agent in Charge of the Honolulu Field Office of the FBI.

“This case is a superb example of interagency cooperation with one single goal in mind: to protect Americans from harm. The successful prosecution of Mr. Gowadia for espionage and other crimes highlights the many contributions of AFOSI personnel and our partner organizations worldwide,” said Colonel Keith Givens, Vice Commander, Headquarters, U.S. Air Force Office of Special Investigations.

Gowadia was first arrested in October 2005 on a criminal complaint alleging that he willfully communicated national defense information to a person not entitled to receive it. He was charged with additional violations in a 2005 indictment, a 2006 superseding indictment and a 2007 second superseding indictment.

According to information produced during the trial, Gowadia was an engineer with Northrop Grumman Corporation from approximately 1968 to 1986, during which time he contributed to the development of the unique propulsion system and low observable capabilities of the B-2 Spirit bomber, sometimes referred to as the “Stealth” bomber. Gowadia also continued to work on classified matters as a contractor with the with the U.S. government until 1997, when his security clearance was terminated.

Evidence at the trial revealed that from July 2003 to June 2005, Gowadia took six trips to the PRC to provide defense services in the form of design, test support and test data analysis of technologies for the purpose of assisting the PRC with its cruise missile system by developing a stealthy exhaust nozzle and was paid at least $110,000 by the PRC. The jury convicted Gowadia of two specific transmissions of classified information: a PowerPoint presentation concerning the exhaust nozzle of a PRC cruise missile project and an evaluation of the effectiveness of a redesigned nozzle, and a computer file providing his signature prediction of a PRC cruise missile outfitted with his modified exhaust nozzle and associated predictions in relation to a U.S. air-to-air missile.

The prosecution also produced evidence which documented Gowadia’s use of three foreign entities he controlled, including a Liechtenstein charity purportedly for the benefit of children, to disguise the income he received from foreign countries. In addition to demonstrating that Gowadia under-reported his income and falsely denied having control over foreign bank accounts for the two tax years involved in his convictions, the evidence at trial revealed that Gowadia had not paid any income tax since from at least 1997 until 2005 when he was arrested.

Chief U.S. States District Judge Susan Oki Mollway set sentencing for Nov. 22, 2010. At that time, Gowadia faces the following maximum terms of imprisonment.

• Life imprisonment for each of two counts of willfully communicating classified national defense information to the PRC with the intent that it be used to the advantage of the PRC or to the injury of the United States.
• Ten years’ imprisonment for each of three counts of willfully communicating classified national defense information to persons not entitled to receive it in the PRC and elsewhere, and one count of illegally retaining defense systems information at his Maui residence.
• Ten years’ imprisonment for each of four counts of exporting technical data related to a defense article without an export license (in violation of the Arms Export Control Act).
• Five years’ imprisonment for one count of conspiracy to violate the Arms Export Control Act.
• Ten years’ imprisonment for one money laundering charge based on proceeds from the Arms Export Control Act violations.
• Three years’ imprisonment for each of two counts of filing false tax returns for the years 2001 and 2002.

This case was investigated by FBI, the U.S. Air Force Office of Special Investigations, the Internal Revenue Service’s Criminal Investigation Division, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement and the State Department’s Directorate of Defense Trade Controls.

The case was prosecuted by Assistant U.S. Attorney Kenneth M. Sorenson of the U.S. Attorney’s Office for the District of Hawaii and Senior Trial Attorney Robert E. Wallace Jr., of the Counterespionage Section of the Justice Department’s National Security Division.