Chinese citizen sentenced in military data-theft case

[Erica Absetz <erica () riskbasedsecurity com>]

http://articles.washingtonpost.com/2013-03-25/world/38006926_1_development-of-military-technologies-information-and-technologies-chinese-citizen

NEWARK, N.J. — Measured in millimeters, the tiny device was designed
to allow drones, missiles and rockets to hit targets without satellite
guidance. An advanced version was being developed secretly for the
U.S. military by a small company and L-3 Communications, a major
defense contractor.

On Monday, Sixing Liu, a Chinese citizen who worked at L-3’s space and
navigation division, was sentenced in federal court here to five years
and 10 months for taking thousands of files about the device, called a
disk resonator gyroscope, and other defense systems to China in
violation of a U.S. arms embargo.

The case illustrates what the FBI calls a growing “insider threat”
that hasn’t drawn as much attention as Chinese cyber operations. But
U.S. authorities warned that this type of espionage can be just as
damaging to national security and American business.

“The reason this technology is on the State Department munitions list,
and controlled . . . is it can navigate, control and position
missiles, aircraft, drones, bombs, lasers and targets very
accurately,” said David Smukowski, president of Sensors in Motion, the
small company in Bellvue, Wash., developing the technology with L-3.
“While it saves lives, it can also be very strategic. It is rocket
science.”

Smukowski estimated that the loss of this tiny piece of technology
alone could ultimately cost the U.S. military hundreds of millions of
dollars.

In the past four years, nearly 100 individual or corporate defendants
have been charged by the Justice Department with stealing trade
secrets or classified information for Chinese entities or exporting
military or dual-use technology to China, according to court records.
A number of other cases involving China remain under seal, according
to the Justice Department.

The targets of all this theft are some of the biggest and best-known
U.S. defense contractors and private companies, with household names
such as Northrop Grumman, Boeing, General Dynamics, Ford, DuPont and
Dow Chemical.

“America is a global leader in the development of military
technologies and, as such, it has become a leading target for the
theft and illicit transfer of such technologies,” said John Carlin,
acting assistant attorney general for national security. “These
schemes represent a threat to our national security. The intelligence
community has assessed China to be among the most aggressive
collectors of sensitive U.S. information and technologies and our
criminal prosecutions across the country reflect that assessment.”

Earlier this month, a Chinese citizen who worked as a contractor at
NASA’s Langley Research Center was arrested at Dulles Airport and
charged with making false statements to federal agents about the
laptop and SIM card he was carrying. According to an FBI affidavit,
the suspect, Bo Jiang, 31, had taken a NASA laptop that contained
sensitive information on a previous trip to China.

Following the arrest, Maj. Gen. Charles F. Bolden Jr., the NASA
administrator, told a House committee that he was limiting access to
NASA for the citizens of several countries, including China, pending a
full security review.

In a classic espionage case, a 59-year-old former Army defense
contractor in Hawaii was charged this month with passing classified
information to his 27-year-old Chinese lover whom he first met at a
military conference.

Benjamin Pierce Bishop, a former Army officer with a top-secret
security clearance, worked at U.S. Pacific Command as a contractor. He
is accused of turning over information about nuclear weapons, missile
defense, and radar systems. The woman may have attended the conference
“to target individuals . . . who work with and have access to U.S.
classified information,” according to an FBI affidavit.

Last year, the FBI began a public campaign to alert the defense
industry and other businesses to the “insider threat.” As part of the
effort, billboards were placed along commuter corridors near nine
leading research centers.

C. Frank Figliuzzi, the former head of the FBI’s Counterintelligence
Division, told Congress last year that perhaps the most important
measure against the theft of proprietary information “is identifying
and taking defensive measures against employees.”

Liu, who holds a doctorate in electrical engineering, came to the
United States in 1993 and held a series of jobs at Bandag and Primex,
tire manufacturers, and John Deere. In 2009, he went to work at L-3’s
space and navigation division in northern New Jersey, where he was
part of a team of engineers testing the technology created by Sensors
in Motion, a pioneer in gyroscope-based navigation and guidance
systems.
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