This thread will focus on increasing Chinese attempts to cultivate ties to spies and intelligence on non-Chinese countries.
The Official Chinese 🇨🇳 Espionage & Cold War Thread
https://www.wsj.com/articles/cia-ag...with-china-set-for-espionage-trial-1526904001
Patriot or Double Agent? CIA Officer on Trial as U.S. Targets Spying by China
Kevin Mallory’s case shows the U.S.’s stepped-up effort to weed out covert recruitment by Beijing
Aruna ViswanathaMay 21, 2018 8:00 a.m. ET
To the U.S. government, Kevin Mallory was a man in desperate straits, with no income in his pocket but with information in his head useful to China, given his longtime work as a covert CIA officer who spoke Mandarin.
To his defenders, Mr. Mallory, 61 years old, is a patriotic and religious American who served multiple stints overseas in the military, was captured and beaten in Iraq and was only trying to cultivate foreign agents to turn them over to his former colleagues.
The effort to divine Mr. Mallory’s intentions when he was approached by Chinese agents in early 2017—and when he later provided one of those agents with documents the government says were classified—is a big test in the Justice Department’s intensifying effort to combat Chinese espionage. The rare trial against a former member of the U.S. intelligence community accused of double-dealing for another power is scheduled to face a jury on May 29.
Federal prosecutors in Alexandria, Va., contend that Mr. Mallory, who has worked for both the Central Intelligence Agency and Defense Intelligence Agency, provided the documents to his Chinese contact via a secure phone given to him by the contact, promising to send more once he received word on payment.
He arranged to be paid through an “account in another name,” telling his contact in messages he thought had been erased that he “destroyed the paper records” because it was “too dangerous” to keep them around, according to the charges. He also allegedly misled U.S. customs agents when he returned from a trip to Shanghai on April 21, 2017, by not initially reporting the $16,500 in cash in his carry-on bags.
Mr. Mallory’s lawyers say he was trying to string along the Chinese agents while regularly alerting his former colleagues in the intelligence community what was going on. In court filings, his attorneys outline a timeline suggesting that Mr. Mallory was in frequent contact with CIA officials, saying he had an “urgent” need to talk to them about his trips to China.
“I keep getting banged on, but in a little bit more detailed way,” Mr. Mallory said in one voicemail left for a CIA official on April 26, 2017, according to his lawyers. They say this shows he was conscientiously keeping the CIA informed about the approaches by the Chinese.
Kevin Mallory
The Justice Department is stepping up its efforts to go after what appear to be increasingly aggressive recruitment efforts by China’s intelligence operatives. U.S. officials say those efforts have progressed from recruiting ethnic Chinese and Chinese Americans to a wider pool of potential targets.
At least three major federal cases involving Chinese espionage are under way, including Mr. Mallory’s. A longtime State Department employee was accused last year of concealing contacts with Chinese spies, and a former CIA officer suspected of providing information that helped the Chinese government identify U.S. informants in that country was arrested earlier this year and indicted this month with conspiring to commit espionage.
If convicted, Mr. Mallory faces at least 30 years in prison.
The Justice Department has also botched several prosecutions, prompting complaints from Chinese-Americans that the government is unfairly targeting their community. Prosecutors have dropped at least three such cases in recent years—one against a Chinese-American employee at the National Weather Service, another against a Temple University professor, and a third against two former Eli Lilly scientists.
Last month a judge ordered the Commerce Department to reinstate the Weather Service employee, saying she was correct to assert she had been the “victim of a gross injustice” when fired by the department in 2016.
Mr. Mallory’s associates describe him in court papers as a person who would wash a roof or clean a yard for a friend in need of assistance, not one who would betray his country. “I was moved to tears,” one former neighbor said in a letter to the court, recounting Mr. Mallory’s comments on the “true meaning of July 4th” at an Independence Day gathering near his Virginia home one year.
Several of Mr. Mallory’s associates submitted letters explaining that Mr. Mallory, along with his Taiwan-born wife, is an active member of a Chinese congregation of the Church of Jesus Christ of Latter-Day Saints outside Washington, D.C. Mr. Mallory, who is not ethnically Chinese, told customs agents in April 2017 that he had met in Shanghai with an individual he knew through the church.
Mr. Mallory appeared at a recent court hearing with close-cropped hair wearing a green prison jumpsuit. He sat quietly beside his lawyer, public defender Geremy Kamens, who successfully argued the trial be pushed back two weeks as the defense team’s technical expert reviews the secure phone Mr. Mallory had used.
Mr. Mallory’s lawyers argue that he provided the Chinese contacts with no substantive information. In an effort to mislead them, they say, he even created a document with a false classification marking, which he then crossed out to make it look like he was trying to hide something before sending it to the agent.
Prosecutors dismiss Mr. Mallory’s claims as efforts to cover his tracks. They cite a recording of a jailhouse call between Mr. Mallory and his wife just after the FBI searched their house upon his June 2017 arrest.
In the call, in which the couple spoke Mandarin, Mr. Mallory asked his wife if the FBI had taken an SD data storage card, wrapped in aluminum foil, from a drawer in their bedroom closet. The FBI had found the card, which had at least seven classified documents on it, according to court records.
After hearing about the call, U.S. District Judge T.S. Ellis, who is overseeing the case, ordered last July that Mr. Mallory be detained to ensure his appearance at trial.
“The government, in a June 22nd search, found the card that he was concerned about,” Judge Ellis said, at the July 7, 2017, hearing. He also cited an earlier message Mr. Mallory allegedly sent his Chinese contact in which Mr. Mallory wrote, “Your object is to gain information, and my object is to be paid for.”
The Chinese agent allegedly responded, “My current object is to make sure [of] your security and try to reimburse you.”
Judge Ellis was struck by that back-and-forth. “That’s a perfect exchange between a handler and his spy operative,” he said. “Right out of a movie, almost.”
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
Patriot or Double Agent? CIA Officer on Trial as U.S. Targets Spying by China
Kevin Mallory’s case shows the U.S.’s stepped-up effort to weed out covert recruitment by Beijing
Aruna ViswanathaMay 21, 2018 8:00 a.m. ET
To the U.S. government, Kevin Mallory was a man in desperate straits, with no income in his pocket but with information in his head useful to China, given his longtime work as a covert CIA officer who spoke Mandarin.
To his defenders, Mr. Mallory, 61 years old, is a patriotic and religious American who served multiple stints overseas in the military, was captured and beaten in Iraq and was only trying to cultivate foreign agents to turn them over to his former colleagues.
The effort to divine Mr. Mallory’s intentions when he was approached by Chinese agents in early 2017—and when he later provided one of those agents with documents the government says were classified—is a big test in the Justice Department’s intensifying effort to combat Chinese espionage. The rare trial against a former member of the U.S. intelligence community accused of double-dealing for another power is scheduled to face a jury on May 29.
Federal prosecutors in Alexandria, Va., contend that Mr. Mallory, who has worked for both the Central Intelligence Agency and Defense Intelligence Agency, provided the documents to his Chinese contact via a secure phone given to him by the contact, promising to send more once he received word on payment.
He arranged to be paid through an “account in another name,” telling his contact in messages he thought had been erased that he “destroyed the paper records” because it was “too dangerous” to keep them around, according to the charges. He also allegedly misled U.S. customs agents when he returned from a trip to Shanghai on April 21, 2017, by not initially reporting the $16,500 in cash in his carry-on bags.
Mr. Mallory’s lawyers say he was trying to string along the Chinese agents while regularly alerting his former colleagues in the intelligence community what was going on. In court filings, his attorneys outline a timeline suggesting that Mr. Mallory was in frequent contact with CIA officials, saying he had an “urgent” need to talk to them about his trips to China.
“I keep getting banged on, but in a little bit more detailed way,” Mr. Mallory said in one voicemail left for a CIA official on April 26, 2017, according to his lawyers. They say this shows he was conscientiously keeping the CIA informed about the approaches by the Chinese.
Kevin Mallory
The Justice Department is stepping up its efforts to go after what appear to be increasingly aggressive recruitment efforts by China’s intelligence operatives. U.S. officials say those efforts have progressed from recruiting ethnic Chinese and Chinese Americans to a wider pool of potential targets.
At least three major federal cases involving Chinese espionage are under way, including Mr. Mallory’s. A longtime State Department employee was accused last year of concealing contacts with Chinese spies, and a former CIA officer suspected of providing information that helped the Chinese government identify U.S. informants in that country was arrested earlier this year and indicted this month with conspiring to commit espionage.
If convicted, Mr. Mallory faces at least 30 years in prison.
The Justice Department has also botched several prosecutions, prompting complaints from Chinese-Americans that the government is unfairly targeting their community. Prosecutors have dropped at least three such cases in recent years—one against a Chinese-American employee at the National Weather Service, another against a Temple University professor, and a third against two former Eli Lilly scientists.
Last month a judge ordered the Commerce Department to reinstate the Weather Service employee, saying she was correct to assert she had been the “victim of a gross injustice” when fired by the department in 2016.
Mr. Mallory’s associates describe him in court papers as a person who would wash a roof or clean a yard for a friend in need of assistance, not one who would betray his country. “I was moved to tears,” one former neighbor said in a letter to the court, recounting Mr. Mallory’s comments on the “true meaning of July 4th” at an Independence Day gathering near his Virginia home one year.
Several of Mr. Mallory’s associates submitted letters explaining that Mr. Mallory, along with his Taiwan-born wife, is an active member of a Chinese congregation of the Church of Jesus Christ of Latter-Day Saints outside Washington, D.C. Mr. Mallory, who is not ethnically Chinese, told customs agents in April 2017 that he had met in Shanghai with an individual he knew through the church.
Mr. Mallory appeared at a recent court hearing with close-cropped hair wearing a green prison jumpsuit. He sat quietly beside his lawyer, public defender Geremy Kamens, who successfully argued the trial be pushed back two weeks as the defense team’s technical expert reviews the secure phone Mr. Mallory had used.
Mr. Mallory’s lawyers argue that he provided the Chinese contacts with no substantive information. In an effort to mislead them, they say, he even created a document with a false classification marking, which he then crossed out to make it look like he was trying to hide something before sending it to the agent.
Prosecutors dismiss Mr. Mallory’s claims as efforts to cover his tracks. They cite a recording of a jailhouse call between Mr. Mallory and his wife just after the FBI searched their house upon his June 2017 arrest.
In the call, in which the couple spoke Mandarin, Mr. Mallory asked his wife if the FBI had taken an SD data storage card, wrapped in aluminum foil, from a drawer in their bedroom closet. The FBI had found the card, which had at least seven classified documents on it, according to court records.
After hearing about the call, U.S. District Judge T.S. Ellis, who is overseeing the case, ordered last July that Mr. Mallory be detained to ensure his appearance at trial.
“The government, in a June 22nd search, found the card that he was concerned about,” Judge Ellis said, at the July 7, 2017, hearing. He also cited an earlier message Mr. Mallory allegedly sent his Chinese contact in which Mr. Mallory wrote, “Your object is to gain information, and my object is to be paid for.”
The Chinese agent allegedly responded, “My current object is to make sure [of] your security and try to reimburse you.”
Judge Ellis was struck by that back-and-forth. “That’s a perfect exchange between a handler and his spy operative,” he said. “Right out of a movie, almost.”
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
Two former French spies accused of spying 'for China'
Two former French spies accused of spying 'for China'
Two French ex-spies have been charged with treason for spying for a foreign power that judicial sources say is China Credit: MARTIN BUREAU/AFP
Two former French spies have been charged with treason for spying for a foreign power, the defence ministry has confirmed, with judicial sources saying the power in question is China.
The two retired spies, along with the spouse of one of the accused pair, were arrested in December, said armed forces minister Florence Parly, warning that the compromised information “could undermine the security of the state”.
The agents are thought to have handed over secrets while still in service for France’s external DGSE intelligence agency, similar to Britain’s MI6 and America’s CIA, Ms Parly told CNews television.
She declined to comment on unconfirmed reports that China was the foreign power in question, however sources close to the investigation told AFP that this was the case.
Both were placed under formal investigation on December 22 to face charges of spying for a foreign power, compromising classified secrets and delivering information detrimental to fundamental national interests.
One of the former agents, whose identities have not be disclosed, also faces charges of directly inciting treason, the source said.
French Defence Minister Florence Parly confirmed that two ex-spies had been charged with treason for spying for a foreign power Credit: LUDOVIC MARIN/AFP
The third person - believed to be the wife - has been indicted for "concealment of treasonable crimes" and placed under “judicial control”, meaning judges keep close tabs on her pending trial.
According to Le Monde, the two ex-spies are suspected of handing over sensitive information on “the working methods” of France’s external intelligence service. Investigators are still determining how long they had been passing along intelligence, she said.
The DGSE itself detected the “extremely serious” behavior of its agents and then contacted French prosecutors, according to the defence ministry.
“The fact that we sounded the alert is proof of our vigilance,” Ms Parly said. "I can't say much else," she added.
"France has partners but we live in a dangerous world, and unfortunately these types of things can happen."
In a statement, the DGSE said the revelations were “a major area of focus for the DGSE as well all French counter-intelligence services”.
The rare public acknowledgement of the arrest of suspected double agents - which Le Monde called “hugely embarrassing for the state” - came as Australia's spy chief issued a fresh warning that foreign espionage had reached "unprecedented" levels that could cause "catastrophic harm" to Canberra's interests.
Duncan Lewis, head of the Australian Security Intelligence Organisation (ASIO), told parliament on Thursday night said the "current scale of foreign intelligence activity ... is unprecedented”.
Australia has warned of "unprecedented" espionage amid tensions with China over the South China Sea Credit: Van Khoa/ Thanh Nien News
He singled out no particular country, but his remarks coincided with a sharp escalation of concerns over Chinese interference in domestic politics.
"Espionage, interference, sabotage and malicious insider activities can inflict catastrophic harm on our country's interests,” Mr Lewis told a parliamentary hearing in Canberra.
"The grim reality is there are more foreign intelligence officers today than during the Cold War, and they have more ways of attacking us."
Mr Lewis backed government proposals to pass reforms to bolster laws when investigating and prosecuting alleged foreign interference.
The warning came weeks after US authorities said they had indicted a former CIA operative on charges of spying for China, following his arrest in January.
China has long been accused of economic espionage to glean valuable intellectual property, but it is thought to have also ramped up national security operations as its international foreign policy ambitions rise.
Asked on Friday about the arrests in France, China's foreign ministry said it was unaware of the situation.
---------------------------------------------------
French spy facing treason charges 'was snared by Chinese honeytrap'
French spy facing treason charges 'was snared by Chinese honeytrap'
The headquarters of the General Directorate for External Security (DGSE), France's equivalent of MI6 Credit: MARTIN BUREAU/AFP
A former French intelligence agent facing treason charges was reportedly ensnared by a Chinese “honeytrap” when he began an affair with an interpreter in Beijing, it emerged on Sunday.
The retired spy, named as Henri M., 71, and another former operative, Pierre-Marie H., 66, are being held in prisons near Paris, accused of passing “information detrimental to fundamental national interests” to a foreign power.
According to a report in the Journal du Dimanche newspaper, Henri M. fell for a woman who worked as an interpreter for the French ambassador in Beijing after he was posted there in 1997 as station chief for France’s DGSE foreign intelligence service, the equivalent of Britain’s MI6. Security sources confirmed the report.
Henri M.’s wife stayed in France when he moved to Beijing, leaving him vulnerable to the charms of the interpreter, who has not been named. She was reportedly suspected of being a Chinese intelligence agent or informant.
The ambassador, Pierre Morel, became concerned about the relationship and asked for Henri M. to be recalled to France in 1998.
Henri M. then left the intelligence service and started a business importing Chinese furniture. He was divorced and returned to Beijing in 2003, where he married the former interpreter at the French embassy the following year.
The couple moved to Hainan Island off China’s southern coast, which serves as its main nuclear submarine base, and Henri M. opened a restaurant.
Many questions remain about why he and Pierre-Marie H. were only arrested two decades after Henri M. first came under suspicion.
Franck Renaud, a Journal du Dimanche reporter and the author of a 2010 book that alluded to the scandal at the Beijing embassy, said: “Did the DGSE want to avoid a crisis and at the same time let Chinese intelligence believe that Henri M. might be a double agent feeding them false information?”
Florence Parly, the French defence minister, confirmed the charges against the two former agents but declined to specify whether the foreign power involved was China.
Two former French spies accused of spying 'for China'
- Henry Samuel, Paris
Two French ex-spies have been charged with treason for spying for a foreign power that judicial sources say is China Credit: MARTIN BUREAU/AFP
Two former French spies have been charged with treason for spying for a foreign power, the defence ministry has confirmed, with judicial sources saying the power in question is China.
The two retired spies, along with the spouse of one of the accused pair, were arrested in December, said armed forces minister Florence Parly, warning that the compromised information “could undermine the security of the state”.
The agents are thought to have handed over secrets while still in service for France’s external DGSE intelligence agency, similar to Britain’s MI6 and America’s CIA, Ms Parly told CNews television.
She declined to comment on unconfirmed reports that China was the foreign power in question, however sources close to the investigation told AFP that this was the case.
Both were placed under formal investigation on December 22 to face charges of spying for a foreign power, compromising classified secrets and delivering information detrimental to fundamental national interests.
One of the former agents, whose identities have not be disclosed, also faces charges of directly inciting treason, the source said.
French Defence Minister Florence Parly confirmed that two ex-spies had been charged with treason for spying for a foreign power Credit: LUDOVIC MARIN/AFP
The third person - believed to be the wife - has been indicted for "concealment of treasonable crimes" and placed under “judicial control”, meaning judges keep close tabs on her pending trial.
According to Le Monde, the two ex-spies are suspected of handing over sensitive information on “the working methods” of France’s external intelligence service. Investigators are still determining how long they had been passing along intelligence, she said.
The DGSE itself detected the “extremely serious” behavior of its agents and then contacted French prosecutors, according to the defence ministry.
“The fact that we sounded the alert is proof of our vigilance,” Ms Parly said. "I can't say much else," she added.
"France has partners but we live in a dangerous world, and unfortunately these types of things can happen."
In a statement, the DGSE said the revelations were “a major area of focus for the DGSE as well all French counter-intelligence services”.
The rare public acknowledgement of the arrest of suspected double agents - which Le Monde called “hugely embarrassing for the state” - came as Australia's spy chief issued a fresh warning that foreign espionage had reached "unprecedented" levels that could cause "catastrophic harm" to Canberra's interests.
Duncan Lewis, head of the Australian Security Intelligence Organisation (ASIO), told parliament on Thursday night said the "current scale of foreign intelligence activity ... is unprecedented”.
Australia has warned of "unprecedented" espionage amid tensions with China over the South China Sea Credit: Van Khoa/ Thanh Nien News
He singled out no particular country, but his remarks coincided with a sharp escalation of concerns over Chinese interference in domestic politics.
"Espionage, interference, sabotage and malicious insider activities can inflict catastrophic harm on our country's interests,” Mr Lewis told a parliamentary hearing in Canberra.
"The grim reality is there are more foreign intelligence officers today than during the Cold War, and they have more ways of attacking us."
Mr Lewis backed government proposals to pass reforms to bolster laws when investigating and prosecuting alleged foreign interference.
The warning came weeks after US authorities said they had indicted a former CIA operative on charges of spying for China, following his arrest in January.
China has long been accused of economic espionage to glean valuable intellectual property, but it is thought to have also ramped up national security operations as its international foreign policy ambitions rise.
Asked on Friday about the arrests in France, China's foreign ministry said it was unaware of the situation.
---------------------------------------------------
French spy facing treason charges 'was snared by Chinese honeytrap'
French spy facing treason charges 'was snared by Chinese honeytrap'
- David Chazan, Paris
The headquarters of the General Directorate for External Security (DGSE), France's equivalent of MI6 Credit: MARTIN BUREAU/AFP
A former French intelligence agent facing treason charges was reportedly ensnared by a Chinese “honeytrap” when he began an affair with an interpreter in Beijing, it emerged on Sunday.
The retired spy, named as Henri M., 71, and another former operative, Pierre-Marie H., 66, are being held in prisons near Paris, accused of passing “information detrimental to fundamental national interests” to a foreign power.
According to a report in the Journal du Dimanche newspaper, Henri M. fell for a woman who worked as an interpreter for the French ambassador in Beijing after he was posted there in 1997 as station chief for France’s DGSE foreign intelligence service, the equivalent of Britain’s MI6. Security sources confirmed the report.
Henri M.’s wife stayed in France when he moved to Beijing, leaving him vulnerable to the charms of the interpreter, who has not been named. She was reportedly suspected of being a Chinese intelligence agent or informant.
The ambassador, Pierre Morel, became concerned about the relationship and asked for Henri M. to be recalled to France in 1998.
Henri M. then left the intelligence service and started a business importing Chinese furniture. He was divorced and returned to Beijing in 2003, where he married the former interpreter at the French embassy the following year.
The couple moved to Hainan Island off China’s southern coast, which serves as its main nuclear submarine base, and Henri M. opened a restaurant.
Many questions remain about why he and Pierre-Marie H. were only arrested two decades after Henri M. first came under suspicion.
Franck Renaud, a Journal du Dimanche reporter and the author of a 2010 book that alluded to the scandal at the Beijing embassy, said: “Did the DGSE want to avoid a crisis and at the same time let Chinese intelligence believe that Henri M. might be a double agent feeding them false information?”
Florence Parly, the French defence minister, confirmed the charges against the two former agents but declined to specify whether the foreign power involved was China.
Cleared of Spying for China, She Still Doesn’t Have Her Job Back
Cleared of Spying for China, She Still Doesn’t Have Her Job Back
May 17, 2018
An independent board ruled that the Commerce Department must reinstate Sherry Chen to her job at the National Weather Service, after a judge suggested that officials had buried exculpatory evidence.Maddie McGarvey for The New York Times
It is the case that the government simply will not let die.
Three years ago, the Justice Department dropped espionage-related charges against Sherry Chen, a Chinese-American hydrologist at the National Weather Service, clearing her of accusations that she had used a stolen password to download information about the nation’s dams and lied about a meeting with a high-ranking Chinese official.
But Ms. Chen still can’t get back to work. Even though her name was cleared, her employers at the Commerce Department — which oversees the National Weather Service — continue to press their case that Ms. Chen be fired for many of the same charges she was exonerated of, according to two people familiar with the case but not authorized to speak about it publicly.
The Commerce Department said it planned to fire Ms. Chen in 2015. She appealed to the federal Merit Systems Protection Board, an independent, bipartisan board charged with safeguarding the rights of civil servants. Last month — in an unusually strong-worded statement — the board ruled that the Commerce Department must reinstate her, give her back pay and cover her legal fees.
In the ruling, the judge overseeing the case, Michele Szary Schroeder, suggested that Commerce officials had buried exculpatory evidence that would have cleared Ms. Chen. She also wrote that the two officials who had decided to fire Ms. Chen appeared “more concerned about being right than doing the right thing.”
“Based on the unyielding nature of their testimony, I would not have been surprised if they rejected that 2 + 2 = 4,” Judge Schroeder wrote of the two Commerce Department officials who advocated for Ms. Chen’s dismissal.
Despite that ruling, the Commerce Department plans to appeal the ruling and press ahead with Ms. Chen’s dismissal, according to the people familiar with the case.
Congressional officials say the case against Ms. Chen and separate charges that were brought and then dropped against a Chinese-American professor at Temple University continue to raise concerns that Chinese-Americans have become targets for prosecution and workplace discrimination.
“I am dumbfounded,” said Representative Ted Lieu, a Democrat from Los Angeles, who, along with other members of the Congressional Asian Pacific American Caucus, has been following Ms. Chen’s case closely. “The appropriate reaction is for the Department of Commerce to apologize to Sherry Chen. Instead, they’re going to jack up her already large legal costs and trauma, and only continue to drag this story out and highlight for the American public that this termination should never have happened in the first place.”
Mr. Lieu, who as a lawyer brought cases before the Merit Systems Protection Board, and others say that an appellate court is unlikely to reverse the board’s decision, especially given new findings that Commerce officials may have hid evidence that would have exonerated Ms. Chen.
Among other findings, the case revealed that Commerce Department officials buried a dozen sworn statements from Ms. Chen’s co-workers at the National Weather Service. Those statements suggested that she had work-related reasons to access a national dams database, and the password she used was not stolen — it was a shared “office password.”
Investigators also failed to include findings that the information Ms. Chen had shared with her former colleague in China was publicly available and not a secret.
“I can discern no reason how the agency could have reached the conclusion that these materials were not relevant,” Judge Schroeder wrote in her ruling, adding that the agency’s decision to exclude that exculpatory evidence “defied logic.”
As part of her initial appeal to the Merit Systems Protection Board, Ms. Chen said she was a “victim of gross injustice.” The judge agreed. “After reviewing the evidence and testimony in this matter, I believe Ms. Chen’s assertion is correct.”
A version of this article appears in print on May 18, 2018, on Page B3 of the New York edition with the headline: Spy Charges Were Erased, But She’s Still Out of a Job. Order Reprints | Today’s Paper | Subscribe
Cleared of Spying for China, She Still Doesn’t Have Her Job Back
May 17, 2018
An independent board ruled that the Commerce Department must reinstate Sherry Chen to her job at the National Weather Service, after a judge suggested that officials had buried exculpatory evidence.Maddie McGarvey for The New York Times
It is the case that the government simply will not let die.
Three years ago, the Justice Department dropped espionage-related charges against Sherry Chen, a Chinese-American hydrologist at the National Weather Service, clearing her of accusations that she had used a stolen password to download information about the nation’s dams and lied about a meeting with a high-ranking Chinese official.
But Ms. Chen still can’t get back to work. Even though her name was cleared, her employers at the Commerce Department — which oversees the National Weather Service — continue to press their case that Ms. Chen be fired for many of the same charges she was exonerated of, according to two people familiar with the case but not authorized to speak about it publicly.
The Commerce Department said it planned to fire Ms. Chen in 2015. She appealed to the federal Merit Systems Protection Board, an independent, bipartisan board charged with safeguarding the rights of civil servants. Last month — in an unusually strong-worded statement — the board ruled that the Commerce Department must reinstate her, give her back pay and cover her legal fees.
In the ruling, the judge overseeing the case, Michele Szary Schroeder, suggested that Commerce officials had buried exculpatory evidence that would have cleared Ms. Chen. She also wrote that the two officials who had decided to fire Ms. Chen appeared “more concerned about being right than doing the right thing.”
“Based on the unyielding nature of their testimony, I would not have been surprised if they rejected that 2 + 2 = 4,” Judge Schroeder wrote of the two Commerce Department officials who advocated for Ms. Chen’s dismissal.
Despite that ruling, the Commerce Department plans to appeal the ruling and press ahead with Ms. Chen’s dismissal, according to the people familiar with the case.
Congressional officials say the case against Ms. Chen and separate charges that were brought and then dropped against a Chinese-American professor at Temple University continue to raise concerns that Chinese-Americans have become targets for prosecution and workplace discrimination.
“I am dumbfounded,” said Representative Ted Lieu, a Democrat from Los Angeles, who, along with other members of the Congressional Asian Pacific American Caucus, has been following Ms. Chen’s case closely. “The appropriate reaction is for the Department of Commerce to apologize to Sherry Chen. Instead, they’re going to jack up her already large legal costs and trauma, and only continue to drag this story out and highlight for the American public that this termination should never have happened in the first place.”
Mr. Lieu, who as a lawyer brought cases before the Merit Systems Protection Board, and others say that an appellate court is unlikely to reverse the board’s decision, especially given new findings that Commerce officials may have hid evidence that would have exonerated Ms. Chen.
Among other findings, the case revealed that Commerce Department officials buried a dozen sworn statements from Ms. Chen’s co-workers at the National Weather Service. Those statements suggested that she had work-related reasons to access a national dams database, and the password she used was not stolen — it was a shared “office password.”
Investigators also failed to include findings that the information Ms. Chen had shared with her former colleague in China was publicly available and not a secret.
“I can discern no reason how the agency could have reached the conclusion that these materials were not relevant,” Judge Schroeder wrote in her ruling, adding that the agency’s decision to exclude that exculpatory evidence “defied logic.”
As part of her initial appeal to the Merit Systems Protection Board, Ms. Chen said she was a “victim of gross injustice.” The judge agreed. “After reviewing the evidence and testimony in this matter, I believe Ms. Chen’s assertion is correct.”
A version of this article appears in print on May 18, 2018, on Page B3 of the New York edition with the headline: Spy Charges Were Erased, But She’s Still Out of a Job. Order Reprints | Today’s Paper | Subscribe
Preventing Chinese espionage at America’s universities
By Josh RoginMay 22
People walk past a propaganda billboard showing Chinese President Xi Jinping along a street in Beijing on March 2. (Mark Schiefelbein/AP)
As part of America’s overdue awakening to China’s foreign influence operations campaign inside the United States, the intelligence community and lawmakers are shining new light on how the Communist Party is operating inside America’s higher-education system and raising the alarm about the possibility of Chinese intelligence-gathering in parts of the United States it hasn’t operated in before.
Now drawing increased attention are the Confucius Institutes. These Communist Party-sponsored educational collaborations are on more than 100 U.S. university campuses and often operate through opaque arrangements with host institutions. And while nobody wants to demonize educational or cultural exchanges between the United States and China, the push for more transparency in and oversight of these collaborations is gaining steam.
“Communist China is infiltrating American universities to meddle with our curricula, silence criticism of their regime, and steal intellectual property including sensitive dual-use research,” said Sen. Ted Cruz (R-Tex.). “The Confucius Institutes are the velvet glove around the iron fist of their campaigns on our campuses. The American government needs new tools to protect the integrity of our universities and research, and to block academic espionage.”
Cruz is introducing legislation intended to boost government authorities’ capacity to deal with foreign intelligence organizations operating inside the American education system. Called the Stop Higher Education Espionage and Theft Act of 2018, the bill doesn’t mention China by name, but it is a clear attempt to give the U.S. law enforcement community more tools to deal with the Chinese Communist Party’s expansion inside American educational institutions.
The legislation would create a way for the FBI to designate an entity as a “foreign intelligence threat to higher education” and then require academic institutions to follow strict reporting and disclosure rules for any financial interactions with designated foreign entities.
That’s a direct response to FBI Director Christopher A. Wray’s unprecedented public warning in February testimony that Confucius Institutes are among the entities used by the Chinese government as “nontraditional collectors, especially in the academic setting,” in large and small cities all across the United States.
“It’s across basically every discipline,” said Wray. “And I think the level of naivete on the part of the academic sector about this creates its own issues. They’re exploiting the very open research and development environment that we have, which we all revere.”
Wray specifically called out Confucius Institutes, saying the FBI was “watching warily” and investigating in “certain instances.”
Cruz’s bill would also lower the threshold for universities for reporting on foreign financial contributions or gifts, from $250,000 to $50,000. That mirrors language in a House legislative effort led by Rep. Joe Wilson (R-S.C.) that would also bring Confucius Institutes under the reporting rules of the Foreign Agents Registration Act.
Public examples of espionage at U.S. universities due to their relationship with Confucius Institutes are hard to come by. Their classes on Chinese language and culture are often benign. Their value lies in the relationships they provide between the Chinese government and the American institutions that host them.
But according to journalist Daniel Golden, who wrote a book on intelligence collection on American campuses, the risk is that Confucius Institutes provide the Chinese government opportunities for intelligence-gathering that the United States is not prepared to counter. The faculty at the institutes are, for example, chosen by Hanban, the Communist Party’s educational arm, and are subject to government pressure.
“Chinese intelligence does see Confucius Institutes as a way to gather information,” Zao Cheng Xu, director of the Confucius Institute at Indiana University-Perdue University Indianapolis, told Golden.
Intelligence-gathering is not the only reason Confucius Institutes are coming under scrutiny. There are several reported examples of Confucius Institutes and their staff working to stifle criticism of China on campus. Often, universities self-censor in order to keep the funding and the reciprocal access to China that the relationships enable.
The National Association of Scholars reported last year that “to a large extent, universities have made improper concessions that jeopardize academic freedom and institutional autonomy. Sometimes these concessions are official and in writing; more often they operate as implicit policies.”
Due to internal criticism, or under pressure from lawmakers such as Cruz and Sen. Marco Rubio (R-Fla.), several American universities have cut ties with their Confucius Institutes. Rather than stifle positive collaboration with China, the policy and academic worlds should come together to set principles and best practices based on transparency, disclosure and firm barriers preventing undue pressure or influence. Congress can play a role in setting those rules.
That could dispel distrust, ensure accountability and set a model for all types of U.S.-China exchange. Cooperation with China is positive, but must be based on clear guidelines and without tolerance for the Chinese Communist Party’s attempts to abuse American institutions for their own objectives.
China's Spies Elude U.S. Vacuum Cleaner
Industrial espionage is too complex to be captured by a pat metaphor.
More stories by Adam MinterMay 9, 2018, 10:00 PM EDT
The investigation into scientist Wen Ho Lee spun out of control, leading activists to allege he was targeted because of his race.
Photographer: Carolyn Cole/Los Angeles Times/Getty Images
President Donald Trump could never be accused of underestimating the impact of Chinese economic espionage and technology transfer on the United States. “We’re talking about big damages,” he said when discussing retaliation for intellectual property theft in a January interview. “We’re talking about numbers that you haven’t even thought about.”
His tariffs and a recently floated proposal to restrict certain Chinese researchers in the U.S. are calibrated to be equally tough. But will they work?
To answer this question, I spoke to Mara Hvistendahl, a national fellow at the New America Foundation, a contributing correspondent at Science, and an expert on Chinese industrial espionage. During the eight years she covered science and politics from China, she wrote a series of groundbreaking storiesthat demystified and personalized China’s hackers and scientists. She’s currently at work on her next book, “The Scientist and the Spy,” which examines industrial espionage, China, and the FBI. It’ll be published in 2019. Our conversation has been lightly edited:
Adam Minter: In February FBI Director Christopher Wray told a Senate Intelligence Committee hearing that Chinese students, academics and researchers are exploiting the U.S.’s “very open research and development environment” and constitute a “whole-of-society threat.” Is that a new outlook at the bureau?
Mara Hvistendahl: To be clear, industrial espionage — which is sometimes perpetrated by Chinese professors and researchers — is a significant threat. But Wray’s comments touched a nerve because they follow on a long line of intelligence officials making blanket statements about the role played by Chinese-Americans in Beijing’s intelligence efforts. For years, the prevailing theory about Chinese espionage was that Beijing used a “vacuum cleaner” approach, relying on a large number of amateur collectors of Chinese descent to vacuum up small amounts of information. You can see how that metaphor lends itself to broad generalizations about an entire group. But it turns out that the metaphor is wrong.
The vacuum-cleaner theory — which dates back to the late 1990s — has lately come under attack by a new cohort of experts on Chinese intelligence, most notably Jamestown Foundation fellow Peter Mattis. If you look at the actual espionage cases that have emerged from China, there is a broad diversity of approaches taken. Instead of one central actor controlling an army of informal collectors, a number of different actors are often separately pursuing a variety of goals. So spying might originate with the Ministry of State Security or the People’s Liberation Army, or it might originate with private-sector businesses that have other motives for wanting information. And these entities often rely on collectors who are not of Chinese descent. But this more complex landscape is much harder to sum up with a pat metaphor. So the vacuum-cleaner comparison won’t die.
AM: To what extent are China’s industrial policies dependent on information gleaned from foreign research efforts, including universities, whether legally or illicitly?
MH: If you look at Chinese development plans like Made in China 2025, which aims to make China a leader in strategic areas like robotics and advanced medical devices, there’s a clear emphasis on assimilating foreign technologies. What makes this issue so complicated is that this emphasis exists alongside legitimate and robust scientific development. There is now extensive scientific cooperation between the United States and China, with many researchers traveling back and forth and often even holding posts in both countries. The FBI now has to make sense of that. And it’s not easy.
Scientists, meanwhile, are caught in the middle. On the one hand, they are often encouraged — by their universities, by U.S. government research organizations — to collaborate with colleagues in China. On the other hand, they worry that they could be prosecuted for a wrong move. So they’re getting mixed messages.
AM: One of the themes in your work on Chinese hacking is that it’s wrong to assume every incident or plan is cooked up at the highest levels of China’s intelligence bureaucracy. Does it go for economic espionage?
MH: Yes. There have certainly been examples of Chinese military or state ministry personnel engaging in industrial espionage, but these typically involve technologies with military applications. When a Chinese business sets out to steal a U.S. competitor’s technology or trade secret, state approval is often implicit rather than explicit — meaning that the Chinese government prioritizes certain areas for development, and then looks the other way once an abuse is committed.
Policymakers often get hung up on whether the Chinese government is directly involved in a specific case and end up overlooking the role played by the private sector. Some of the experts I talked with point out that to really combat IP theft, you have to create penalties that affect the companies responsible for it, rather than just going after the researchers who are caught in the act of stealing a trade secret. To compare this to the fight against drug trafficking, you can’t go after drug runners without looking at the cartels.
AM: In recent years, the FBI has successfully prosecuted several cases of Chinese economic espionage, including some connected to research institutions. But there have also been some very high-profile failures that raise questions of outright prejudice, as well as agent and prosecutorial incompetence. Is there a risk that — as the FBI raises the profile and fears around such cases — we might see more of the latter than the former?
MH: Any time something becomes a top priority, you see questionable cases being brought. This happened with terrorism after 9/11 and it’s happening now with industrial espionage.
But groups like the Committee of 100 point out that after 9/11, the FBI reached out to Muslim American groups to ensure that the bureau’s response was appropriate. They’re calling for the same thing to happen now. Scientists need to be turned into allies rather than potential threats in the effort to combat industrial espionage.
It’s also important to note that the long-term fallout from a single bungled case can be significant. If you look at the Wen Ho Lee case, for example: In 1999, Lee was accused of stealing secrets connected to the U.S. nuclear arsenal. He committed clear security breaches, but the investigation into his actions spun out of control, leading activists to allege that Lee was targeted because of his race. Not surprisingly, this perception damaged recruitment efforts at America’s leading weapons labs. In the years following the debacle, Los Alamos had difficulty attracting new scientists of Asian descent. Several Chinese-born scientists who worked at the lab, meanwhile, accepted positions back in China. So many left, according to a South China Morning Post report, that a group of researchers in China became known as the “Los Alamos club.”
AM: Even before the Trump administration, there seemed to be fairly widespread, bipartisan, even international, support for the idea that China’s technology transfer demands had gone too far. What was the preferred route to dealing with them before the Trump administration?
MH: There have been a number of approaches put on the table over the past five years, most notably by the IP Commission, an independent body then led by Jon Huntsman, the former U.S. ambassador to China (and now U.S. ambassador to Russia). These include blocking offending companies from using the American banking system and improving the International Trade Commission’s process for sequestering goods containing stolen IP.
The Obama administration made a lot of noise about IP theft from China, and had some limited success in addressing the issue. So President Trump is certainly not the first president to take on this challenge.
AM: The Trump administration raised the possibility of excluding certain Chinese researchers from the United States, or at least restricting their access to various research areas. What impact would that have on U.S. science?
MH: Additional security reviews in some fields might make sense. But reducing the total number of visas granted — if indeed that is what’s planned — would be a mistake. There’s no question that Chinese scientists and engineers are critical to innovation. According to the National Science Foundation, about half of the Ph.D.s in science and engineering granted in the United States each year go to foreigners: of these, almost a third are Chinese citizens, more than to any other nationality.
The IP Commission actually recommended increasing increase the number of green cards given to Chinese students in the United States, to induce them to stay rather than return to China. And that makes sense to me. We need to proceed cautiously. But if the end goal in cracking down on industrial espionage is to safeguard American innovation, we’re not going to accomplish that by closing off our borders to the people who power our scientific community.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Adam Minter at aminter@bloomberg.net
To contact the editor responsible for this story:
Matthew Brooker at mbrooker1@bloomberg.net
Missouri City, Houston men caught up in alleged espionage scheme involving Chinese company
Missouri City, Houston men caught up in alleged espionage scheme involving Chinese company
Two businessmen, including one who is a Chinese national, have been indicted on charges alleging that they conspired to commit economic espionage and steal trade secrets from a business in the United States on behalf of a company in China that was engaged in manufacturing buoyancy materials for military and civilian uses.
The charges were announced Friday by Assistant Attorney General for National Security John C. Demers, U.S. Attorney for the District of Columbia Jessie K. Liu, Assistant Director Bill Priestap of the FBI’s Counterintelligence Division, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, and Chief Don Fort of the Internal Revenue Service’s Criminal Investigation (IRS-CI).
Shan Shi, 53, a U.S. citizen from Houston, and Gang Liu, 32, a Chinese national, were among six individuals named in a superseding indictment returned on April 26, 2018, in the U.S. District Court for the District of Columbia. All six individuals initially were indicted in June 2017 on a charge of conspiracy to commit theft of trade secrets. The superseding indictment includes that charge and adds the conspiracy to commit economic espionage count against Shi and Liu, as well as a federal money laundering conspiracy count against Shi. CBM-Future New Material Science and Technology Co. Ltd. (CBMF), a Chinese company based in Taizhou, and its Houston-based subsidiary, CBM International, Inc. (CBMI), have also been indicted on all three charges.
The other defendants include Uka Kalu Uche, 36, a U.S. citizen from Spring, Texas; Samuel Abotar Ogoe, 75, a U.S. citizen from Missouri City, Texas; Kui Bo, 41, a Canadian citizen who had been residing in the Dallas area; and Hui Huang, 33, a Chinese national. All of the defendants pled not guilty last year to the charges in the original indictment, with the exception of Huang, who has not been apprehended and is believed to remain at large in China.
A seventh defendant previously pled guilty in December 2017 to a charge of conspiracy to commit theft of trade secrets.
“The superseding indictment in this case demonstrates that we will vigorously enforce laws meant to protect against economic espionage and related offenses,” said U.S. Attorney Liu. “The charges also reflect the tireless dedication of the FBI, Commerce Department’s BIS, IRS, and other law enforcement organizations to prosecuting theft of intellectual property.”
“The ongoing theft of American technology is a severe threat to our national security, and this is doubly true for technology with direct military applications. As this situation demonstrates, the FBI remains committed to working with its partners to combat this threat,” said FBI Assistant Director for Counterintelligence Priestap.
“This indictment is a good example of the community, industry, and law enforcement working together,” said FBI Special Agent in Charge Turner. “Economic espionage is a growing threat that costs the U.S. economy billions of dollars and puts our national security at risk. The FBI will continue to work with its partners to bring perpetrators of economic espionage to justice.”
“This superseding indictment alleges a vast criminal conspiracy involving everything from trade secret theft to money laundering and other financial crimes,” said IRS Criminal Investigation Chief Fort. “By unraveling this scheme, we were able to hold those accountable who would profit from such a scheme while sending a message to others who would commit similar crimes in the future that they, too, will be brought to justice.”
According to the indictment, China has promoted military, social, and economic development initiatives with a goal of making the country a marine power and has prioritized the development of engineered components of deepwater buoyancy materials. The charges in the indictment involve the development of syntactic foam, a strong, lightweight material that can be tailored for commercial and military uses, including oil exploration, aerospace and stealth technologies, and underwater vehicles, such as submarines.
According to the indictment, from at least 2013 through May 2017, Shi operated on behalf of CBMF, which intended to create a facility in China to sell syntactic foam. CBMF received research funds from state funding in China and was part of a collaborative innovation center with Chinese government entities.
The indictment alleges that Shi and Liu conspired with the other defendants to steal trade secrets from a global engineering firm, referred to in the indictment as “Company A,” that is a producer in the global syntactic foam market.
In March 2014, according to the indictment, Shi incorporated CBMI, which was owned and funded by CBMF, in Houston. The indictment alleges that CBMF employees wired approximately $3.1 million to CBMI between June 2014 and May 2017.
According to the indictment, Shi and others recruited and hired current and former employees of “Company A” in Houston, including Liu, for the purpose of aiding CBMF’s capability to make syntactic foam. Liu previously worked for “Company A” as a material development engineer and had access to proprietary and trade secret data. He and others are accused of passing along those trade secrets. According to the indictment, the technology was ultimately destined for China, to benefit the government and other state-owned enterprises.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
The maximum statutory penalty for conspiracy to commit economic espionage is 15 years of incarceration. The maximum for conspiracy to commit theft of trade secrets is 10 years, and the maximum for conspiracy to commit money laundering is 20 years. The charges also carry potential financial penalties. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case is being investigated by the FBI’s Houston Field Office, Commerce’s BIS Office of Export Enforcement, and the IRS-CI.
The case is being prosecuted by Assistant U.S. Attorneys Jeffrey Pearlman, Zia Faruqui, and Michael Romano of the District of Columbia, and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.
Missouri City, Houston men caught up in alleged espionage scheme involving Chinese company
Two businessmen, including one who is a Chinese national, have been indicted on charges alleging that they conspired to commit economic espionage and steal trade secrets from a business in the United States on behalf of a company in China that was engaged in manufacturing buoyancy materials for military and civilian uses.
The charges were announced Friday by Assistant Attorney General for National Security John C. Demers, U.S. Attorney for the District of Columbia Jessie K. Liu, Assistant Director Bill Priestap of the FBI’s Counterintelligence Division, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, and Chief Don Fort of the Internal Revenue Service’s Criminal Investigation (IRS-CI).
Shan Shi, 53, a U.S. citizen from Houston, and Gang Liu, 32, a Chinese national, were among six individuals named in a superseding indictment returned on April 26, 2018, in the U.S. District Court for the District of Columbia. All six individuals initially were indicted in June 2017 on a charge of conspiracy to commit theft of trade secrets. The superseding indictment includes that charge and adds the conspiracy to commit economic espionage count against Shi and Liu, as well as a federal money laundering conspiracy count against Shi. CBM-Future New Material Science and Technology Co. Ltd. (CBMF), a Chinese company based in Taizhou, and its Houston-based subsidiary, CBM International, Inc. (CBMI), have also been indicted on all three charges.
The other defendants include Uka Kalu Uche, 36, a U.S. citizen from Spring, Texas; Samuel Abotar Ogoe, 75, a U.S. citizen from Missouri City, Texas; Kui Bo, 41, a Canadian citizen who had been residing in the Dallas area; and Hui Huang, 33, a Chinese national. All of the defendants pled not guilty last year to the charges in the original indictment, with the exception of Huang, who has not been apprehended and is believed to remain at large in China.
A seventh defendant previously pled guilty in December 2017 to a charge of conspiracy to commit theft of trade secrets.
“The superseding indictment in this case demonstrates that we will vigorously enforce laws meant to protect against economic espionage and related offenses,” said U.S. Attorney Liu. “The charges also reflect the tireless dedication of the FBI, Commerce Department’s BIS, IRS, and other law enforcement organizations to prosecuting theft of intellectual property.”
“The ongoing theft of American technology is a severe threat to our national security, and this is doubly true for technology with direct military applications. As this situation demonstrates, the FBI remains committed to working with its partners to combat this threat,” said FBI Assistant Director for Counterintelligence Priestap.
“This indictment is a good example of the community, industry, and law enforcement working together,” said FBI Special Agent in Charge Turner. “Economic espionage is a growing threat that costs the U.S. economy billions of dollars and puts our national security at risk. The FBI will continue to work with its partners to bring perpetrators of economic espionage to justice.”
“This superseding indictment alleges a vast criminal conspiracy involving everything from trade secret theft to money laundering and other financial crimes,” said IRS Criminal Investigation Chief Fort. “By unraveling this scheme, we were able to hold those accountable who would profit from such a scheme while sending a message to others who would commit similar crimes in the future that they, too, will be brought to justice.”
According to the indictment, China has promoted military, social, and economic development initiatives with a goal of making the country a marine power and has prioritized the development of engineered components of deepwater buoyancy materials. The charges in the indictment involve the development of syntactic foam, a strong, lightweight material that can be tailored for commercial and military uses, including oil exploration, aerospace and stealth technologies, and underwater vehicles, such as submarines.
According to the indictment, from at least 2013 through May 2017, Shi operated on behalf of CBMF, which intended to create a facility in China to sell syntactic foam. CBMF received research funds from state funding in China and was part of a collaborative innovation center with Chinese government entities.
The indictment alleges that Shi and Liu conspired with the other defendants to steal trade secrets from a global engineering firm, referred to in the indictment as “Company A,” that is a producer in the global syntactic foam market.
In March 2014, according to the indictment, Shi incorporated CBMI, which was owned and funded by CBMF, in Houston. The indictment alleges that CBMF employees wired approximately $3.1 million to CBMI between June 2014 and May 2017.
According to the indictment, Shi and others recruited and hired current and former employees of “Company A” in Houston, including Liu, for the purpose of aiding CBMF’s capability to make syntactic foam. Liu previously worked for “Company A” as a material development engineer and had access to proprietary and trade secret data. He and others are accused of passing along those trade secrets. According to the indictment, the technology was ultimately destined for China, to benefit the government and other state-owned enterprises.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
The maximum statutory penalty for conspiracy to commit economic espionage is 15 years of incarceration. The maximum for conspiracy to commit theft of trade secrets is 10 years, and the maximum for conspiracy to commit money laundering is 20 years. The charges also carry potential financial penalties. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case is being investigated by the FBI’s Houston Field Office, Commerce’s BIS Office of Export Enforcement, and the IRS-CI.
The case is being prosecuted by Assistant U.S. Attorneys Jeffrey Pearlman, Zia Faruqui, and Michael Romano of the District of Columbia, and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.
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