Rampant Chinese Espionage against America Continues

News that the Chinese wind turbine company Sinovel engaged in espionage to steal software developed by the US company AMSC is only the latest example of the rampant and ongoing theft of white-developed technology and information in America by Chinese nationals.

In the latest incident, “”Sinovel nearly destroyed an American company by stealing its intellectual property,” Assistant Attorney General John Cronan said in an official Department of Justice statement this week following a court case in Wisconsin over the theft.

As proven at trial, Sinovel stole proprietary wind turbine technology from AMSC in order to produce its own turbines powered by the stolen intellectual property.  AMSC developed the technology – software that regulates the flow of electricity from wind turbines to electrical grids – in Wisconsin and elsewhere.

At the time of the theft in March 2011, Sinovel had contracted with AMSC for more than $800 million in products and services to be used for the wind turbines that Sinovel manufactured, sold, and serviced.

Sinovel was charged on June 27, 2013, along with Su Liying, the deputy director of Sinovel’s Research and Development Department; Zhao Haichun, a technology manager for Sinovel; and Dejan Karabasevic, a former employee of AMSC Windtec Gmbh, a wholly-owned subsidiary of AMSC.

The evidence presented at trial showed that Sinovel conspired with the other defendants to obtain AMSC’s copyrighted information and trade secrets in order to produce wind turbines and to retrofit existing wind turbines with AMSC technology without paying AMSC the more than $800 million it was owed and promised.

Through Su and Zhao, Sinovel convinced Karabasevic, who was head of AMSC Windtec’s automation engineering department in Klagenfurt, Austria, to leave AMSC Windtec, to join Sinovel, and to steal intellectual property from the AMSC computer system by secretly downloading source code on March 7, 2011, from an AMSC computer in Wisconsin to a computer in Klagenfurt.

Sinovel then commissioned several wind turbines in Massachusetts and copied into the turbines software compiled from the source code stolen from AMSC.  The U.S.-based builders of these Massachusetts turbines helped bring Sinovel to justice.  Su and Zhao are Chinese nationals living in China, and Karabasevic is a Serbian national who lived in Austria, but now lives in Serbia.

According to evidence presented at trial, following the theft, AMSC suffered severe financial hardship.  It lost more than $1 billion in shareholder equity and almost 700 jobs, over half its global workforce.

Sentencing is set for June 4.

In May 2017, Chinese national Xu Jiaqiang pled guilty before a White Plains, New York federal court on charges of “economic espionage and theft of a trade secret.”

According to a U.S. Department of Justice (DOJ) statement, the charges stemmed from Xu’s theft of proprietary source code from his former employer, IBM, with the intent to benefit the National Health and Family Planning Commission of the People’s Republic of China.

A 1999 United States House of Representatives Select Committee on U.S. National Security and Military and Commercial Concerns with the People’s Republic of China report, known as the Cox Report, warned that China has stolen classified information on every thermonuclear warhead in the U.S.’s intercontinental ballistic missile arsenal.

China is known to have stolen classified information on the W-56 Minuteman II ICBM, the W-62 Minuteman III ICBM, the W-70 Lance short-range ballistic missile (SRBM), the W-76 Trident C-4 submarine-launched ballistic missile (SLBM), the W-78 Minuteman III Mark 12A ICBM, the W-87 Peacekeeper ICBM, the W-88 Trident D-5 SLBM, and weapon-design concepts and features.

There is a long record of active military espionage by Chinese nationals in the US military on behalf of China.

Some of the more prominent cases include:

– Larry Wu-Tai Chin: He worked in the CIA in Arlington, Virginia, for 35 years while providing China with classified information after becoming an American citizen in 1965. He was convicted in 1986.

Peter Lee: A physicist born in China who worked at the Los Alamos National Laboratory and later for TRW Inc., pleaded guilty in 1999 to lying on security-clearance forms and passing classified national-defense information to Chinese scientists on business trips to Beijing.

Chi Mak: A China-born engineer who worked for L-3 Communications, a California-based defense contractor, copied and sent sensitive documents on U.S. Navy ships, submarines and weapons to China by courier. He was convicted in 2008 for espionage.

Moo Ko-Suen: In May 2006, Ko-Suen pled guilty to being a covert agent of China after attempting to purchase United States military equipment to send to China. The equipment included an F-16 fighter jet engine, an AGM-129A cruise missile, UH-60 Black Hawk helicopter engines and AIM-120 air-to-air missiles.

Wen Ho Lee: A Taiwanese-born scientist who worked for the University of California at the Los Alamos National Laboratory. In December 1999, a federal grand jury indicted him of stealing secrets about the US nuclear arsenal for China. He denied the charges, which were later reduced to improper handling of restricted data, to which he pleaded guilty.

Fei Ye and Ming Zhong: Fei Ye, a U.S. citizen; and Ming Zhong, a permanent resident of the United States; were arrested at the San Francisco International Airport in 2001, accused of conspiracy; economic espionage; possession of stolen trade secrets; and foreign transportation of stolen property stealing trade secrets in designing a computer microprocessor to benefit China.  The case resulted in the first convictions under the Economic Espionage Act of 1996.

Hua Jun Zhao: Zhao was accused of stealing a cancer-research compound from a Medical College of Wisconsin office in Milwaukee in an attempt to deliver it to Zhejiang University. He was convicted for “accessing a computer without authorization and obtaining information worth more than $5,000.”

Walter Liew aka Liu Yuanxuan: He was sentenced to serve 15 years in prison in 2014 for violations of the Economic Espionage Act, tax evasion, bankruptcy fraud, and obstruction of justice, after being found guilty of stealing trade secrets from E.I. du Pont de Nemours & Company to give to state-owned companies of China, Pangang Group companies.

Kun Shan Chun: A native of China and naturalized U.S. citizen, Chun worked as an FBI Technician and had Top Secret clearance. He pled guilty to charges of acting in the United States as an agent of the People’s Republic of China (“China”), without providing prior notice to the Attorney General.

Jerry Chun Shing Lee: In January 2018, the FBI arrested former CIA officer Jerry Chun Shing Lee, charging him with unlawful possession of defense information. It is claimed that he compromised the identities of numerous CIA spies in China leading to their execution by the Chinese secret service.

In 2017, US President Donald Trump ordered an official inquiry into Chinese espionage in America. A report that year from the Commission on the Theft of American Intellectual Property named China as the main offender, estimating the cost to the U.S. economy at up to $600 billion a year.

* The Sinovel sentencing came on the same day that Yinyan Wang, 25, a Chinese national studying in Pennsylvania, pled guilty to one count of misuse of a passport and one count of passport fraud.

On Oct. 20, 2017, Wang took the Graduate Record Exam (GRE) in Boston for another Chinese citizen. At the testing site, Wang presented a counterfeit Chinese passport containing a counterfeit nonimmigrant visa purportedly issued by the United States in the identity of the other student. On five prior occasions between July 2017 and August 2017, Wang took either the GRE or the Test of English as a Foreign Language (TOEFL) exam under assumed names for other people, taking advantage of the fact that most Europeans have difficulty telling Chinese people apart, and, even if they do suspect something, are usually too scared to confront a nonwhite in such circumstances for fear of being called “racist.”

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