US Jury finds PRC spy guilty of industrial espionage
Targeted GE’s Advanced Additive Technology for Engine Blades
PRC Foreign Ministry says “set up”
One of 33 DOJ convictions of Chinese Commercial Spies
US Aviation companies BEWARE!!!
A federal jury convicted a purported spy of state-sponsored espionage for the People’s Republic of China. The allegations by the US Department of Justice pointed to a multi-year scheme to pry away prized GE research for Chinese aerospace “catch-up. The advanced technology sought was GE’s unique, commercial secret commercial aircraft engine constructed with significant additive content.
If the spy had been successful, the deficient PRC powerplant offerings would have taken a giant leap.
The People’s Republic of China, several years ago, declared that it would successfully enter, and presumably soon thereafter dominate, the global aerospace business. The development of their market entry prototypes has not been seen as a technical or marketing success.
The PRC manifesto has not progressed according to its plans; in order to sell their aircraft overseas, the products must meet strict global regulatory safety standards and the requirements of the airline customers. The venture has not been well received by governments and/or potential buyers:
Not having attained the level of technical sophistication required to participate in this competitive market, the PRC, true to its communist views on property rights, opted to steal the intellectual property which Chinese research had not yet realized.
As the US prosecutors, based in their study of this spy ring, concluded:
“This conviction of a card-carrying intelligence officer for economic espionage underscores that trade secret theft is integral to the PRC government’s plans to modernize its industries,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “But this conviction also serves notice that the United States will not sit by as China, or any other nation-state, attempts to steal instead of researching and developing key technology. Instead, and with the support of our allies, we will continue to investigate, prosecute, and hold accountable those who try to take the fruits of American ingenuity illegally…
“This was state-sponsored economic espionage by the PRC designed to steal American technology and put Americans out of work,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “For those who doubt the real goals of the PRC, this should be a wakeup call; they are stealing American technology to benefit their economy and military. The FBI is partnering with over 50 U.S. Government agencies to share information and investigative resources to stop the PRC’s illegal activities.”
The PRC denies that this was state-sponsored economic espionage, and counters that it was a “set up”. “The allegation is pure fabrication,” Chinese Foreign Ministry spokesperson Wang Wenbin said during a press conference. Minister Wenbin’ s assertion of the US’ fabrication of the PRC espionage campaign for US commercial secret has been disproved by the DoJ’s successful China Initiative’s 33 convictions.
Several years ago, in anticipation of President Trump’s State Visit to the Peoples’ Republic of China, the FAA and its Chinese equivalent signed a ground-breaking aviation cooperation agreement. Given the PRC’s proclivity to steal information, does this agreement make sense?
As early as 2012, Matt Thurber warned about the potential risks that US companies face when they allow Chinese companies to have access to the data for an aircraft Type Certificate (TC). The intellectual property (IP) laws recognized by international authorities get short shrift in China.
American aerospace must be aware of this concerted effort by the PRC. For example, sending any US manufactured aircraft to one of the burgeoning low-cost MROs may provide the target advanced technology by reverse engineering and/or maintenance manuals.
November 09, 2021
US officials have slammed the Chinese government after a state security official was convicted by a federal jury in Ohio last week of attempting to commit economic espionage and the theft of aerospace trade secrets.
The U.S. Department of Justice (DoJ) said Yanjun Xu (41), described as a deputy division director of Sixth Bureau of the Jiangsu Province Ministry of State Security, had targeted companies recognized as leaders in the field of aviation. This included an attempt to steal information about GE Aviation’s exclusive composite aircraft engine fan.
Xu was the first Chinese intelligence officer to be extradited to the US to stand trial and his conviction produced a strident response from senior Justice Department and FBI officials.
FBI Counterintelligence Division assistant director Alan E., Kohler described the case as state-sponsored espionage by the People’s Republic of China (PRC) designed to “steal American technology and put Americans out of work”.
“For those who doubt the real goals of the PRC, this should be a wake-up call; they are stealing American technology to benefit their economy and military,” Kohler said.
“This conviction of a card-carrying intelligence officer for economic espionage underscores that trade secret theft is integral to the PRC government’s plans to modernize its industries,” Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division said the conviction of a card-carrying intelligence officer underscored that trade secret theft was integral to the Chinese government plans to modernize its industry.
“But this conviction also serves notice that the United States will not sit by as China, or any other nation-state, attempts to steal instead of researching and developing key technology,” he said.
[The DOJ recitation of its investigation]
According to court documents and evidence presented at trial, beginning in at least December 2013, Xu used multiple aliases to target specific companies in the United States and abroad that are recognized as leaders in the field of aviation. He identified experts who worked for the companies and recruited them to travel to China, often initially under the guise that they were traveling to give a presentation at a university. Xu and others paid the experts stipends on top of covering travel costs. According to today’s conviction, Xu attempted to steal technology related to GE Aviation’s exclusive composite aircraft engine fan – which no other company in the world has been able to duplicate – to benefit the Chinese state.
In March 2017, a GE Aviation employee in Cincinnati, Ohio, was solicited to give a report at a university in China. The employee traveled to China two months later to present at the university and was introduced to Xu. Xu and others paid the employee’s travel expenses and a stipend.
In January 2018, Xu requested “system specification, design process” information from the employee and – with the cooperation of the company, who was working with the FBI – the employee emailed a two-page document from the company that included a label that warned about the disclosure of proprietary information.
In February 2018, Xu began discussing with the employee the possibility of meeting in Europe during one of the employee’s business trips and asked the employee to send a copy of the file directory for his company-issued computer.
Xu traveled to Belgium on April 1, 2018, to meet with the employee and was arrested at that time.
He was arrested in Belgium after GE cooperated with the FBI.
“He identified experts who worked for the companies and recruited them to travel to China, often initially under the guise they were traveling to give a presentation at a university,’’ the DoJ said in a statement. “Xu and others paid the experts stipends on top of covering travel costs.
According to today’s conviction, Xu attempted to steal technology related to GE Aviation’s exclusive composite aircraft engine fan – which no other company in the world has been able to duplicate – to benefit the Chinese state.”
Xu was convicted of two counts of conspiring and attempting to commit economic espionage, which carries a maximum statutory penalty of 15 years in prison for each count and a fine of up to US$5 million.
He was also convicted of conspiracy to commit trade secret theft and two counts of attempted theft of trade secrets, which carries a maximum statutory sentence of 10 years imprisonment for each count and a US$250,000 fine. A federal district court judge will determine any sentence.
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