6 Chinese Men Charged With Economic Espionage in US

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6 Chinese Men Charged With Economic Espionage in US

What will be Beijing’s response?

Yesterday, the U.S. Attorney’s Office in San Francisco, in consultation with the U.S. Justice Department’s counterespionage section, charged six Chinese citizens – including three Chinese professors – with economic espionage and theft of trade secrets, and conspiracy to commit economic espionage and theft of trade secrets.

“According to the charges in the indictment, the defendants leveraged their access to and knowledge of sensitive U.S. technologies to illegally obtain and share U.S. trade secrets with the [People’s Republic of China] for economic advantage,” Assistant Attorney General John Carlin, head of the national security division told the Washington Post.

One of the defendants, professor Hao Zhang, 36, was arrested last Saturday at Los Angeles International Airport. He had been invited to deliver a lecture at a conference. The other five co-conspirators, including professor Wei Pang, 35, are believed to be still in China.

This new indictment is the most high-profile economic espionage case involving Chinese citizens since last May, when the U.S. Department of Justice charged five PLA Officers with crimes related to “computer hacking, economic espionage and other offenses directed at six American victims in the U.S. nuclear power, metals and solar products industries” and will in all likelihood considerably raise tensions between Washington and Beijing.

The indictment contents that three of the six Chinese men, after studying in the United States, took jobs at three American chip companies, Avago Technologies, Micrel Semiconductor and Skyworks Solutions, where they worked as engineers on thin-film bulk acoustic resonator (FBAR) technology, a type of chip used for filtering wireless signals in cellphones and mobile devices.

Between 2006 and 2007, the three Chinese nationals collaborated with three other alleged co-conspirators in China in developing a business plan and started the search for a Chinese entity that would be interested in manufacturing the U.S. radio frequency filter technology.

The group eventually found a partner in Tianjin University and quickly set up a joint venture company – ROFS Microsystems – with the school’s investment arm, Tianjin Micro Nano Manufacturing Tech, to domestically produce the filters. Next to various Chinese commercial businesses, the company’s customers have also included the People’s Liberation Army, according to the New York Times.

In 2009 and 2010, according to the U.S. Attorney’s Office in San Francisco, two of the Chinese engineers filed patent applications in the United States listing themselves as either sole inventors or co-inventors of some of the U.S. technology sold by ROFS Microsystems. The patent applications were also how the U.S. government became aware of the thefts in 2011.

According to David Johnson, the FBI’s top agent in San Francisco, the Chinese professors’ conduct represented  “a methodical and relentless effort by foreign interests to obtain and exploit sensitive and valuable U.S. technology.” Assistant Attorney General John Carlin noted that “economic espionage imposes great costs on American businesses, weakens the global marketplace and ultimately harms U.S. interests worldwide.”