Garth Peterson, 42, a U.S. citizen who lived in Singapore, admitted to an elaborate scheme that allowed him to transfer a multi-million dollar stake in a Shanghai building from Morgan Stanley to a shell company controlled by himself and a Chinese government official in 2006.

The Justice Department says prosecutors decided not to charge Morgan Stanley itself because the firm reported the conduct to authorities and cooperated in the investigation. Peterson was terminated in 2008.

The deal netted an immediate profit of $2.5 million for Peterson and his co-conspirators, plus even more profits as the real estate appreciated in value. According to the Securities and Exchange Commission, which reached a parallel civil settlement with Peterson, his stake in the property is now worth $3.4 million.

Peterson faces up to five years in prison on the conspiracy count, and could face millions in fines. He is to be sentenced July 17. Under the SEC settlement, which is still subject to court approval, he agreed to pay more than $250,000 and to forfeit his interest in the property to a court-appointed receiver. He also agreed to a permanent bar from working in the securities industry.

The Foreign Corrupt Practices Act, enacted in 1977, makes it illegal to make payments or even offer anything of value to influence a foreign official. The law took on new prominence this week after word that Wal-Mart is under a federal investigationfor paying bribes in Mexico.