Victor Tang achieved the American dream. Growing up in Hong Kong he followed the United States' race into space and watched Neil Armstrong land on the moon in 1969. He began working in a factory at age 12 and continued through high school while exploring his curiosity with science by reading books on astronomy. Tang's visions of working in the US space program came closer to becoming a reality when his family migrated here when he was 16 years old. After overcoming difficulties in transferring high school credits, he enrolled in community college before being accepted into Arizona State Univeristy where he studied engineering and graduated 3rd in his class. His first job was with IBM. A few years later he was transferred to Houston, Texas to work with the National Aeronautics and Space Administration (NASA) at Johnson Space Center. In 1999, Tang opened up a small software development company, Tietronix, after landing his first contract with NASA.
In this image provided by NASA, a commercial shipment arrives at the International Space Station on Monday, Nov. 19, 2018. Astronaut Serena Aunon-Chancellor used the space station’s robot arm to grab Northrop Grumman’s capsule. It’s named after Apollo 16 moonwalker and the first space shuttle commander John Young, who died in January. (Alexander Gerst/European Space Agency, NASA via AP)ASSOCIATED PRESS
Tang's relationship with NASA grew over the years and Tietronix, who now employs 75 people in mostly high tech positions, routinely won awards for its ground breaking work. Tietronix's work involved research and development of advanced software technology and applications for NASA that was an integral part of NASA’s core space-flight mission. One of Tietronix's contracts was with the Johnson Space Center for a solution for Model Based Systems Engineering (MBSE), a type of collaborative software that allowed engineers to coordinate complex projects like developing modules to sustain life on the moon and Mars. That is when a series of unfortunate events landed Tang and his company in the crosshairs of a federal criminal investigation.
In February 2018, despite a successful project submission, Tang was indicted for allegedly making materially false statements in reports submitted to NASA on project costs. Those reports were part of a status update on a fixed price contract. Under this type of contract, Tietronix would have to deliver its solution no matter how much effort was put into the contract. Bidding on projects like this put all the financial risk on the contractor but, in this case, it also reflected the confidence that Tietronix had in its ability to deliver. No matter the hours reported to NASA, Tietronix was only going to receive a set sum of dollars, the fixed price, that had previously been negotiated with NASA. However, even on fixed price contracts, the government requires reporting of the actual hours worked on the project. So where did it all go wrong?
During a routine audit, NASA noticed that Tietronix made a huge profit on a research grant that was part of a fixed price contract valued at $750,000. The profit was in large part due to Tietronix's expertise and ability to solve the problem more quickly than anyone anticipated. Several months later, without consulting or hiring an attorney, Tang voluntarily participated in an interview with OIG Agents (note to file ... never a good idea to meet with government investigators without counsel). During a 2 hour and 21 minute interview, Tang candidly answered the agents’ questions, even inviting them to his office and giving them full access to his accounting system. Tang also agreed that he would answer any questions the agents may have in the future and that he would make himself available for additional questioning. Most people would think that is a sign that he was not hiding anything. Tang's thought was that he had nothing to hide and wanted to make sure that his major client, NASA (over 80% of Tietronix business), was confident that nothing was awry. However, OIG felt that there were some discrepancies that needed a closer look ... and prosecutors are always looking for a case.
At 7:45am on February 8, 2017, the US Attorney’s Office for the Southern District of Texas, in collaboration with the FBI, executed a search warrant and raided Tietronix’s offices in Houston. As part of the search warrant, OIG submitted an affidavit claiming that Tietronix was double billing the Government, something that was just not true. The sole employee who was at the Tietronix office when the raid occurred was shocked when agents arrived and started securing the facility. The search for documents and data on computers was aggressive. When the FBI asked for access to the computer server, the employee told them that he did not have a key but that another person who did was on the way Instead of waiting the 15 minutes it would have taken for that person to arrive, FBI agents used a battering ram to break down the server room door. The raid lasted over 20 hours. Meanwhile,
Tang, who was at home preparing to leave for work, received a knock at the door and OIG agents told him about the raid at the Tietronix’s offices. Again, Tang interviewed with the agents and tried to tell them that this was a terrible misunderstanding. He sat with the OIG agents for over three hours answering questions ... again without a lawyer.
A year after the FBI raid, Tang was indicted on seven counts of using a false document in violation of 18 U.S.C. § 1001 (“False Statements”). The indictment had nothing to do with the original search warrant claims about double billing, but it alleged that Tang made materially false statements about project costs and hours worked in reports submitted to NASA related to three fixed-price contracts. As Tang told the agents, "The documentation that I submitted was done with NASA's guidance."
Following the indictment, Tang was suspended by NASA and prohibited from working on any NASA contracts. . Tietronix, represented by Joel Androphy and Zenobia Bivens (Berg & Androphy) responded and requested a meeting with NASA to explain why the allegations levied against Tang and Tietronix were not valid. During that meeting, Tietronix proposed and voluntarily agreed to be placed under a Corporate Integrity Agreement under which remedial measures regarding time reports were taken to keep the business open and its 75 people employed.
When government prosecutors learned of Tietronix’s meeting with NASA, they were not happy. Knowing that they had the upper hand on Tietronix, whose livelihood was in jeopardy if the company were also indicted, made an offer to Tang to plead guilty in exchange for not indicting the company. Tang refused. On the same day as the NASA meeting with Tietronix counsel, the government informed Berg & Androphy that Tietronix would also be indicted. The company faced being shut down as a result.
Tietronix was scheduled to be tried before Tang on August 27, 2018. Several days before that trial the government had a new offer. They would dismiss all charges against the company if Tang resigned pending his criminal trial. Reluctantly, Tang resigned to save the company he founded. Frank Hughes, a retired NASA legend having served as NASA's Chief of Space flight Training, working with many astronauts including Neil Armstrong on his moon landing mission, agreed to assume the role of Tietronix CEO. With that move, NASA agreed to delay any suspension.
Tang went to trial on Nov. 5, 2018. Former NASA administrators testified that Tang followed all instructions from NASA on cost reporting and rejected the government’s claims of fraud. Current NASA employees could not name a single instance in which they relied on the cost data in question that had initiated the charges. Further, those same NASA employees testified that Tietronix’s work for NASA had been exceptional. Those testifying for Tang included former astronauts, Gen. Jean- Loup Chrétien (French retired brigadier general in the French air force, and former astronaut who flew on two Franco-Soviet space missions and a NASA Space Shuttle mission) and Dr. Jim Newman (a veteran of four space flights including the Discovery and Endeavour, and currently teaches at Naval Postgraduate School in California as a NASA visiting professor in the Space Systems Academic Group). Testimony also showed that Tang helped facilitate the operation of the robotic arm attached to the space shuttles and International Space Station and was also hired by NASA to assist in the investigation of the Columbia crash. Tang also testified in his own defense, often correcting prosecutors on information about the business and their accusations. In her closing remarks, Bivens told the jury, "People are supposed to be rewarded for following the rules," she said referring to the instructions that Tang and Tietronix had followed from NASA, "and this case is about punishing someone who followed those rules."
Shortly after the jury began deliberations, a hand-written jury note was sent to the judge ""Jury has reached a verdict." The not-guilty verdict came two hours into deliberations. Tang wants to return to work at Tietronix but, for now, he is looking to take some much needed time off.
Cases like this could have been settled with business meetings, something that Tang attempted to do with agents who visited him early in the investigation. He just had the wrong audience
The case is SOUTHERN DISTRICT OF TEXAS (Houston) Case No: 4:18-cr-00082).
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