Federal Jury Convicts Chinese Spy of Attempted Trade Secret Theft and Attempted Economic Espionage

The new LEAP-1A engine developed by CFM, a joint venture between France's Safran and General Electric, is pictured during its handover ceremony on April 15, 2016 in Colomiers, outside Toulouse.
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A federal jury convicted a Chinese spy of attempted trade secret theft and attempted economic espionage, the U.S. Justice Department stated.

A federal jury convicted 41-year-old Yanjun Xu in the United States Southern District Court of Ohio on Friday, according to the Justice Department.

Xu, a Chinese national, is a Deputy Division Director in the Jiangsu Province Ministry of State Security and “is the first Chinese intelligence officer to be extradited to the United States to stand trial,” according to the Justice Department.

“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 $5 million,” authorities stated.

“Xu 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 in prison for each count and a $250,000 fine,” according to the Justice Department. 

Dating back to at least December of 2013, the spy used several aliases while selecting leading companies in the aviation industry, the Justice Department stated. He would select experts who were employed by the companies and invite them to China to speak at a university, which the Justice Department referred to as a “guise.” The spy and others covered the travel fair for the experts and provided them with stipends.

In one specific instance, Xu tried to steal information regarding technology connected to GE Aviation’s composite aircraft engine fan to assist China, authorities stated. No other company has been able to duplicate the fan.

A GE Aviation employee was invited to give a presentation at a Chinese university in March of 2017, and the employee went to China two months later to attend the presentation, per the Justice Department.

Xu asked the employee for “system specification, design process” particulars in January of 2018. “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,” the authorities stated. 

A month later, the Chinese spy contacted the employee about a potential meeting in Europe as the employee was headed there for a business trip and requested the worker “send a copy of the file directory for his company-issued computer.”

On April 1 of 2018, Xu traveled to Belgium to meet with the GE Aviation employee and was arrested, the Justice Department reports.

Xu was extradited to the United States in October of 2018, according to authorities.

“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, according to the Justice Department. “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.”

“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, per the Justice Department. “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.”

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