Six Chinese nationals charged in US over alleged economic espionage plot

http://www.theguardian.com/world/2015/may/19/six-chinese-nationals-charged-us-economic-espionage

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The US Department of Justice has announced the arrest of a Chinese professor and the indictment of five other Chinese nationals over an alleged plot to steal trade secrets from two electronics manufacturers which design delicate electronic parts for iPhones.

According to a 32-count indictment unsealed by the DoJ on Tuesday, the group were part of a nine-year plot to obtain US trade secrets for universities and companies controlled by the Chinese government.

They included professor Hao Zhang, a professor at Tianjin University in China who was arrested on Saturday at Los Angeles international airport after arriving to attend a scientific conference. The five other suspects indicted for “conspiracy to commit economic espionage” are believed to be in China.

It was the third time in as many years that US authorities have made accusations of economic espionage conducted on behalf of China.

“As today’s case demonstrates, sensitive technology developed by US companies in Silicon Valley and throughout California continues to be vulnerable to coordinated and complex efforts sponsored by foreign governments to steal that technology,” said US attorney Melinda Haag in a statement.

David Johnson, FBI special agent in charge in San Francisco, called the scheme a “methodical and relentless effort by foreign interests to obtain and exploit sensitive and valuable US technology through the use of individuals operating within the United States”.

The indictment alleges that after studying in the US, the men took jobs at Avago Technologies in California and Skyworks Solutions in Massachusetts – both companies which market secure communications equipment to the US military.

Zhang, 36, is a former Skyworks employee and a full professor at Tianjin University. The five others charged were Wei Pang, 35, a former Avago employee who is also a full professor at Tianjin University; Jinping Chen, 41, a professor at Tianjin University and a member of the board of ROFS Microsystems; Huisui Zhang, 34, a Chinese national who studied with Pang and Hao Zhang at the University of Southern California; Chong Zhou, 26, a Tianjin University graduate student; and Zhao Gang, 39, general manager of ROFS.

According to the indictment, staff at Tianjin University helped the engineers acquire funding from Chinese government to build a facility to manufacture wave filters and acoustic resonators.

The defendants are alleged to have started a shell company to manufacture the same kinds of filters and acoustic resonators made by the companies that employed two of the engineers.

The technologies in question are the bulk acoustic wave (BAW) filter and the film bulk acoustic resonator (FBAR) filter. “I want to call the company ‘clifbaw’,” one of the defendants is alleged to have written in an email. “China Lift BAW technology ~ Clifbaw. haha.”

Both Wei Pang and Hao Zhang received degrees from the University of Southern California, where they carried out research with funding from the US Defense Advanced Research Projects Agency (Darpa).

After earning their doctorates, Pang joined Avago and Zhang took a job at Skyworks. Together they teamed up with classmate Husui Zhang to spirit away PowerPoint presentations, layouts, readings and other trade secrets from Avago and from Zhang’s bosses at Massachusetts-based Skyworks, according to the DoJ.

The affidavit alleges that in 2009, Zhang filed a US patent application “based on stolen Avago Air Bridge technology, listing himself as the sole inventor”. When Zhang filed a patent, wrote Matthew A Parrelia, chief of the computer hacking and intellectual property unit at the DoJ, it was based on technology created by Avago, Pang’s employer. Similarly a patent filed by Pang was based on technology taken from Skyworks, the affidavit alleges.

In 2011 the head of Zhang and Pang’s operations in China is said to have emailed the pair and TJU’s Jinping Chen to warn them that they’d used company documents in a presentation to prospective clients. “The material which you sent UMC last time shows very clearly the world AVAGO,” he wrote. “[I] suggest the necessary revisions be made just to avoid any unnecessary problems for us later.”

The group’s actions came to light, according to Parrelia’s affidavit, when Pang’s old boss at Avago, Dr Rich Ruby, attended a conference in Shenzhen and discovered Pang and Zheng’s new laboratory and recognized the technology being used.