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July 26, 2007 

Articles Detail Chinese Defense and Commercial Espionage Activities in U.S. and Law Enforcement's Efforts to Counter Such Activities

USA Today recently published two very detailed, well-researched and informative articles on Chinese defense and commercial espionage activities in the U.S. and law enforcement's efforts to deal with these threats. Both of the stories were written by David J. Lynch, USA Today's former Beijing bureau chief.

The first story, "Law Enforcement Struggles to Combat Chinese Spying", contains detailed information on the FBI's surveillance, arrest and trial of Chi Mak, the Chinese-born engineer who was convicted on May 10th of trying to export U.S. defense technology to China.

The article notes that:

Beijing's goals aren't limited to traditional national security interests. The world's fastest-growing economy operates a shadowy technology bazaar where individuals offering trade secrets find a ready buyer. About one-third of all economic espionage investigations are linked to Chinese government agencies, research institutes or businesses, according to Bruce Carlson of the FBI's counterintelligence division, who leads the bureau's efforts to combat Chinese spying. Since 2001, the number of FBI investigations of suspected Chinese economic espionage cases increased 12%. "The basis for the whole program is money. People (in the USA) are looking to make a buck. China has money to spend," says Carlson
motion from the bail hearing, The on-line version of the article contains links to several documents from the Chi Mak case, including the U.S. Government's trial memorandum, the FBI affidavit on Mak, defendant Mak'sMak's motion for judgment of acquittal and/or for new trial and the U.S. Attorney's opposition to Mak's motion for judgment of acquittal and/or for new trial.

The second story, "FBI Goes on Offensive Against China's Tech Spies" discusses the commercial espionage cases involving Metaldyne and DuPoint. Metaldyne, is a Michigan-based manufacturer that developed a proprietary manufacturing process to heat and mold powdered metal and press it into solid metal parts. In June 2006 a federal grand jury indicted three employees on 64 counts of stealing trade secrets and other crimes. The grand jury alleged that the individuals worked together to steal confidential information from Metaldyne and supply it to a competitor in China. The three pleaded not guilty and are scheduled to face trial in October 2007. In October 2006 Gary Min, a former research chemist at DuPont, pleaded guilty to the theft to trade secrets from DuPont, including information relating to materials used in airplane construction, that were valued at more than $400 million.

The article states that:
Left unchecked, such economic espionage threatens the foundations of U.S. prosperity, say current and former counterintelligence officials. In an era of globalization, competitors in low-wage developing countries can produce most products less expensively. The United States' economic advantage revolves around the sophisticated technology and unique know-how residing in corporate laboratories and research institutes. So that's where the corporate thieves and foreign spies concentrate their efforts.
The article also discusses the FBI's efforts to combat economic espionage and to alert U.S. companies of the dangers. For example, the article notes that the FBI is pursuing 143 economic espionage cases, up from 122 the previous year, and that the FBI has "increased the number of agents assigned to counter alleged Chinese espionage from about 150 in 2001 to more than 350 today." The story also states that during "the past year, the [FBI's] 56 field offices each identified the 10 highest-value corporate targets in their areas and spoke with their top executives about the potential threat they confront — mostly from their own employees."

The on-line version of the story contains links to the plea agreement for Gary Min, the DuPont chemist accused of theft of trade secrets, and the indictment of the three Metaldyne employees accused of stealing trade secrets from the company.

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