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Chinese Officer Is Extradited to U.S. to Face Charges of Economic Espionage – The New York Times

The Chinese intelligence official was arrested in Belgium and brought to the United States, an escalation of the Trump administration’s effort to crack down on Chinese spying.

By Katie Benner

WASHINGTON — A Chinese intelligence official was arrested in Belgium and extradited to the United States to face espionage charges, Justice Department officials said on Wednesday, a major escalation of the Trump administration’s effort to crack down on Chinese spying.

The extradition on Tuesday of the officer, Yanjun Xu, a deputy division director in China’s main spy agency, the Ministry of State Security, is the first time that a Chinese intelligence official has been brought to the United States to be prosecuted and tried in open court. Law enforcement officials said that Mr. Xu tried to steal trade secrets from companies including GE Aviation outside Cincinnati, in Evendale, Ohio, one of the world’s top jet engine suppliers for commercial and military aircraft.

A 16-page indictment details what appears to be a dramatic international sting operation to lure Mr. Xu to what he believed was a meeting in Belgium to obtain proprietary information about jet fan blade designs from a GE Aviation employee, only to be met by Belgian authorities and put on a plane to the United States.

China has for years used spycraft and cyberattacks to steal American corporate, academic and military information to bolster its growing economic power and political influence. But apprehending an accused Chinese spy — all others charged by the United States government are still at large — is an extraordinary development and a sign of the Trump administration’s continued crackdown on the Chinese theft of trade secrets.

The administration also outlined on Wednesday new restrictions on foreign investment aimed at keeping China from gaining access to American companies.

The arrest of Mr. Xu “shows that federal law enforcement authorities can not only detect and disrupt such espionage, but can also catch its perpetrators,” Benjamin C. Glassman, the United States attorney for the Southern District of Ohio, said in a statement.

The coming trial, in federal court in Cincinnati, could further expose China’s methods for stealing trade secrets and embarrass officials in Beijing — part of what current and former administration officials said was a long-term strategy to make stealing secrets costly and shameful for China. Federal prosecutors will have to present additional evidence to prove their case, which could include intercepted communications between government officials or even testimony from cooperating witnesses.

“If you can make it less expensive in terms of money and reputation to instead invest in R&D, the country’s behavior can and will change,” said John Carlin, the former head of the Justice Department’s National Security Division, referring to research and development.

In the short term, the Justice Department’s aggressive move is likely to worsen tensions as the United States and China engage in a tit-for-tat trade war. Should China respond to the arrest, current and former administration officials said, it is possible that the Chinese government will expel American diplomats or intelligence officers from Beijing.

The indictment outlines China’s courting of the GE Aviation employee starting in March 2017. The company, a subsidiary of General Electric, was a ripe target because it builds airplane and helicopter engines for the Pentagon.

An individual identified as an unindicted co-conspirator invited the GE Aviation employee on an all-expense trip to China to meet with scientists at Nanjing University of Aeronautics and Astronautics. Once there, the employee was introduced to Mr. Xu, who continued to be in touch by email after the trip.

In January, Mr. Xu invited the employee back to China and told him that he should bring information about GE Aviation’s “system specification, design process.” Over the next two months, Mr. Xu asked the employee for more details, including what the indictment said was proprietary information about fan blade design.

Mr. Xu and the GE Aviation employee discussed increasingly specific pieces of data that Mr. Xu wanted, and the employee even sent Mr. Xu a file directory of documents on the employee’s company-issued laptop.

The two never met again in China, but set up a meeting in Belgium for the employee to pass more secrets to Mr. Xu. In preparation for the employee’s trip to Europe, Mr. Xu asked the employee if he would use an external thumb drive to transfer information from the employee’s work computer when they met in person.

It is unclear from the indictment if the employee at this point was cooperating with the F.B.I. as part of the sting operation, and it is unclear if the employee ever traveled to Belgium. On Wednesday, the Justice Department praised GE Aviation for its cooperation in the investigation and internal controls that the department said “protected GE Aviation’s proprietary information.’’

Mr. Xu was arrested on April 1 in Belgium and remained in custody there until Tuesday. He is now being held in Cincinnati.

Employees of large American corporations traveling to countries like China are often targets for information theft because their devices can be hacked remotely and because they can speak too revealingly of their work while being wined and dined, said Joseph S. Campbell, the former head of the F.B.I.’s criminal investigative division who is now a director at Navigant Consulting.

“Employees who think they’re sharing unimportant information don’t realize that they’re adding to a broad matrix of knowledge,’’ Mr. Campbell said. “Even with unclassified information, China can put together a fuller picture of a company’s sensitive information.”

The government indictment against Mr. Xu leaves open the possibility that the government investigation is continuing. The document says that an unindicted co-conspirator referred to as CF brokered the meeting between Mr. Xu and the GE Aviation employee; it mentions that Mr. Xu was communicating with other Ministry of State Security agents about the spy operation.

The Justice Department is pursuing other thefts of trade secrets for prosecution, said John C. Demers, the head of the Justice Department’s National Security Division. Together, he said, they show that China has a policy of developing its economy to the detriment of the United States.

“This case is not an isolated incident,” Mr. Demers said. “It is part of an overall economic policy of developing China at American expense. We cannot tolerate a nation’s stealing our firepower and the fruits of our brainpower.”

China has also been targeting General Electric’s turbine technology. The F.B.I. arrested in August a dual citizen of the United States and China who worked at General Electric, charging him with stealing the company’s technology for the purpose of helping Chinese companies.

Julian Barnes contributed reporting.

Sorgente: Chinese Officer Is Extradited to U.S. to Face Charges of Economic Espionage – The New York Times

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