When both the state and his lawyer were pressing him to take the deal, both the state and his lawyer believed he was guilty.
The charges were withdrawn, as I understand it, when the Department of Energy clarified the understanding of the grant application for the US attorney and they came to the conclusion that there was not a duty to disclose the particular affiliation.
There’s no doubt that this caused professional harm to him. At the same time the US government has a reasonable interest in knowing of the foreign government affiliations of researchers it funds, and should reasonably pursue those who flout the rules.
Was this prosecution flawed? It seems very much so. Was it pursued reasonably and in good faith? It’s hard to say it wasn’t, unless your outlook is to be immediately suspicious of prosecutors.