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February 11, 2008 

U.S. Arrests Four People for Engaging in Economic Espionage Involving China

The Justice Department today announced arrests in two separate cases involving in economic espionage charges involving China.

In the first case, Tai Shen Kuo, age 58, and Yu Xin Kang, age 33, both of New Orleans, Louisiana, and Gregg William Bergersen, age 51, of Alexandria, Virginia, were arrested on espionage charges related to the passage of classified U.S. government documents and information to the government of the People’s Republic of China (PRC).

Both Kuo and Kang were charged by criminal complaint with conspiracy to disclose national defense information to a foreign government, in violation of 18 U.S.C., Section 794(a) and (c). Bergersen was charged in a separate complaint with conspiracy to disclose national defense information to persons not entitled to receive it, in violation of 18 U.S.C., Section 793(d) and (g).

According to the Justice Department, the criminal conduct spanned a two-year period from January 2006 to February 2008. Kuo, a naturalized U.S. citizen and New Orleans businessman, gathered national defense information on behalf of the government of the PRC.

Working under the direction of an individual identified in the complaint affidavit only as “PRC Official A,” Kuo cultivated friendships with Bergersen and others within the U.S. government and obtained from them sensitive U.S. government information, including classified national defense information. Much of the information pertained to U.S. military sales to Taiwan.

Bergersen, a Weapons Systems Policy Analyst at the Arlington, Va.-based Defense Security Cooperation Agency, an agency within the Department of Defense, was charged with being the source of the classified information collected by Kuo. Kang, a citizen of the PRC and a Lawful Permanent Resident of the United States, served as a conduit of information between PRC Official A and Kuo.

In the second case, Dongfan “Greg” Chung, 72, of Orange, California, who was employed by Rockwell International from 1973 until its defense and space unit was acquired by Boeing in 1996, was arrested at his residence by special agents with the FBI and investigators with NASA. Chung, who is expected to make his initial court appearance here this afternoon, was named in an indictment returned last Wednesday by a federal grand jury.

The indictment accuses Chung of eight counts of economic espionage, one count of conspiracy to commit economic espionage, one count of acting as an unregistered foreign agent without prior notification to the Attorney General, one count of obstruction of justice, and three counts of making false statements to FBI investigators.

Chung, a native of China who is a naturalized U.S. citizen, held a Secret security clearance when he worked at Rockwell and Boeing on the Space Shuttle program. He retired from the company in 2002, but the next year he returned to Boeing as a contractor, a position he held until September 2006. The indictment alleges that he took and concealed Boeing trade secrets relating to the Space Shuttle, the C-17 military transport aircraft and the Delta IV rocket. Chung allegedly obtained the materials for the benefit of the PRC.

The case against Chung is related to the Chi Mak case. The indictment alleges that Chung and PRC officials exchanged letters that discussed cover stories for Chung’s travel to China and recommended methods for passing information, including suggestions that Chung use Chi Mak to transmit information.

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I don't get it? This is an incredible story but I have seen this behavior repeated far too long. Lesson number one. If you are going to illegally provide a foreign country with intelligence information, make sure you have the brokerage blessing of a Congressman or Senator. That way you can send them 30-40K in the form of campaign contributions (extortion, bribery and fraud) whic is standard procedure. When the State Dept provides military weapons or intelligence to Syria, Egypt, or Pakistan or any unstable Gov't. they want, it is OK? But when a private citizen does the same it is not OK? The Gov't has more than compromised out national security far more than any private citizen or group of citizens ever could. So this prosecution does not make much sense in light of the evidence. Perhaps they should consider prosecuting scientific misconduct by falsification and fabrication as shown on our website here;

S. Ray DeRusse

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