Friday, October 19, 2018

Chinese intel officer arrested and charged with economic espionage

If convicted, Yanjun Xu could face up to 25 years in federal prison.

Image Credit: Wall Street Journal

The U.S. Justice Department recently unsealed a 4-count indictment against a Chinese intelligence officer who has been extradited and charged with attempting to commit economic espionage and theft of trade secrets from multiple aviation and aerospace companies. This marks the first time that the U.S. government has extradited a Chinese intelligence officer facing economic espionage charges.

Beginning in 2013, Yanjun Xu, a Deputy Division Director with China’s Ministry of State Security (MSS), allegedly worked with several other MSS officials to target and extract sensitive information from at least three aviation companies, including Cincinnati-based GE Aviation. Responsible for counter-intelligence, foreign intelligence, and political security as MSS operatives, Xu and his co-conspirators used multiple aliases and fraudulent academic credentials to deceive employees from the companies into traveling to China in attempts to steal trade secrets from them.

Pursuant to a federal complaint, Xu was arrested in Belgium on April 1. After his extradition to the U.S., he was indicted by a federal grand jury in the Southern District of Ohio.

On Wednesday, the Justice Department announced that Xu, aka Qu Hui, aka Zhang Hui, has been charged with conspiracy to commit economic espionage, conspiracy to commit trade secret theft, attempted economic espionage by theft or fraud, and attempted theft of trade secrets by taking or deception.

“This indictment alleges that a Chinese intelligence officer sought to steal trade secrets and other sensitive information from an American company that leads the way in aerospace,” said Assistant Attorney General for National Security John Demers. “This case is not an isolated incident. 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. We will not tolerate a nation that reaps what it does not sow.”

According to the complaint, one of Xu’s targets is among the world’s top aircraft engine suppliers for both commercial and military aircraft. The second target is headquartered in the U.S. and a leading manufacturer of both commercial jetliners and defense systems, while the third target is a leading U.S. company in the field of unmanned aerial vehicle (UAV) technology.

“Innovation in aviation has been a hallmark of life and industry in the United States since the Wright brothers first designed gliders in Dayton more than a century ago,” stated U.S. Attorney Benjamin Glassman. “U.S. aerospace companies invest decades of time and billions of dollars in research. This is the American way. In contrast, according to the indictment, a Chinese intelligence officer tried to acquire that same, hard-earned innovation through theft. This case shows that federal law enforcement authorities can not only detect and disrupt such espionage, but can also catch its perpetrators. The defendant will now face trial in federal court in Cincinnati.”

“This unprecedented extradition of a Chinese intelligence officer exposes the Chinese government’s direct oversight of economic espionage against the United States,” noted Assistant Director Bill Priestap of the FBI’s Counterintelligence Division.

If convicted, Xu could face up to 25 years in federal prison.

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