Newspaper article International New York Times

U.S. Charges 5 in Chinese Army with Cyberspying ; Justice Department Says Trade Secrets Were Stolen from Big American Firms

Newspaper article International New York Times

U.S. Charges 5 in Chinese Army with Cyberspying ; Justice Department Says Trade Secrets Were Stolen from Big American Firms

Article excerpt

The Justice Department says trade secrets were stolen from several large American companies, including Westinghouse and United States Steel.

The Department of Justice said Monday that it had charged five people in the Chinese People's Liberation Army in connection with the theft of trade secrets from some of the largest American companies, including Westinghouse Electric and United States Steel Corp.

The move was a rare instance of the United States' charging foreign government employees with economic espionage, and it increased the tensions between American and Chinese officials who have accused one another of using military assets to hack into computers and launch cyberattacks.

By indicting those suspected of being members of the Chinese Army's most famous cyberwarfare operation, Unit 61398, the Obama administration is using the legal system to make a case it has until now made only in classified briefings: that the Chinese military leadership is stealing American intellectual property and designs for its own profit.

At a news conference in Washington, the Justice Department said it was searching for five people: Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu and Gu Chunhui. It is unlikely that any of them will ever be brought to trial in the United States.

Attorney General Eric H. Holder Jr. said they had "targeted the U.S. private sector for commercial advantage."

"We allege," Mr. Holder added, "that members of Unit 61398 conspired to hack into computers of six U.S. victims to steal information that would provide an economic advantage to the victims' competitors, including Chinese state-owned enterprises." The other companies said to be American targets of Chinese hacking were Alcoa World Alumina, Allegheny Technologies and SolarWorld.

In Beijing, a Foreign Ministry statement denounced the indictment as based on "fabricated facts" and said that it "grossly violates the basic norms governing international relations and jeopardizes China-U.S. cooperation."

The statement continued, "The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber theft of trade secrets," and it added that "China is a victim of severe U.S. cyber theft, wiretapping and surveillance activities." The activities of a joint U.S.-Chinese cyber working group were being suspended, it said.

Whether the statement will be followed by other retaliatory measures remained unclear.

The Justice Department said the five men were indicted on May 1 by a federal grand jury in Pennsylvania and charged with conspiring to commit computer fraud and accessing computers without authorization for the purpose of commercial advantage, among other crimes.

"This case should serve as a wake-up call to the seriousness of the ongoing cyberthreat," Mr. Holder said. He added that "this indictment makes clear that state actors who engage in economic espionage, even over the Internet from faraway places like offices in Shanghai, will be exposed for their criminal conduct and sought for apprehension and prosecution in an American court of law."

Mr. Holder gave examples of damage from the alleged cyberattacks.

He said that while the company SolarWorld was rapidly losing market share to Chinese competitors that were pricing exports well below costs, the hackers were stealing pricing and strategy information from SolarWorld's computers. And while Westinghouse was negotiating with a Chinese state-owned enterprise over the construction of nuclear power plants, he said, the hackers stole trade secret designs for components of those plants. …

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