U.S. Arrests Chinese Intelligence Officer for Economic Spying

  • U.S. Arrests Chinese Intelligence Officer for Economic Spying

U.S. Arrests Chinese Intelligence Officer for Economic Spying

Herb Stapleton, Assistant Special Agent in Charge, FBI, right, speaks alongside US Attorney Benjamin C. Glassman, left, during a news conference, Wednesday, October 10, 2018, in Cincinnati.

In a rare feat, federal agents lured a Chinese government spy to Belgium, where authorities transferred him this week to the United States for prosecution on economic espionage charges, USA officials said Wednesday.

Federal authorities have charged a Chinese national for his alleged efforts to steal sensitive technology from major US aerospace firms by recruiting employees at those firms.

"I can't recall an economic espionage case where we first arrested the person they were running inside the United States and then got the person running him from overseas, " said Carlin, author of the forthcoming book Dawn of the Code War.

The indictment was unsealed on Wednesday following the suspect's extradition.

"It significantly raises the stakes for China and is a part of the deterrence program that some people thought would never be possible".

Cybersecurity experts said the arrest was another sign of the escalating trade tensions between the two countries, adding they had seen increasing espionage by Beijing for business advantage.

"China is actively engaging in targeted and persistent intrusion attempts against multiple sectors of the economy, including biotech, defense, mining, pharmaceutical, professional services, transportation and more", said CrowdStrike Chief Technology Officer Dmitri Alperovitch.

The other companies he allegedly targeted were described as "one of the world's largest aerospace firms, and a leading manufacturer of commercial jetliners and defence, space and security systems". He is accused of using a false identity, recruiting an employee of GE Aviation to lecture and pass along to the Chinese aviation secrets developed by the US aerospace manufacturer.

The indictment returned by a federal grand jury in the Southern District of OH details the interaction between Mr. Xu and two employees of US companies.

The employee traveled to China in June 2017 and gave a presentation at a public university in Nanjing, they said.

FBI Counterintelligence Assistant Director Bill Priestap said the arrest and extradition are unprecedented and "exposes the Chinese government's direct oversight of economic espionage against the United States".

"This case is not an isolated incident", the head of the Justice Department's National Security Division, John Demers, said in a statement.

A senior justice department official said the case was "part of an overall economic policy of developing China at American expense". "But we can not tolerate a nation stealing our firepower and the fruits of our brainpower".

The Chinese Embassy and Xu's lawyers did not immediately respond to requests for comment.

Xu was not arrested on hacking charges, but for attempting to commit economic espionage and steal trade secrets after trying to recruit several insiders from multiple United States aviation and aerospace companies.

On September 26 the U.S. charged electrical engineer Ji Chaoqun with knowingly acting as an agent of China, due to his contacts with an unnamed "high-level intelligence officer" from the Jiangsu State Security Department.

The uneasy relationship between Mr Trump and Chinese President Xi Jinping seems to have put an end to a previous understanding reached by Barack Obama.

According to the Washington Post, one of Xu's alleged coconspirators is Ji Chaoqun, a Chicago man arrested last month.

Top law enforcement officials picked up that theme on Wednesday.