First Chinese spy ever extradited to U.S. sentenced in Cincinnati

CINCINNATI (WXIX) - A Chinese intelligence agent guilty of attempting to steal cutting-edge proprietary technology from GE Aviation was sentenced to 20 years in prison, the FBI Cincinnati Field Office announced Wednesday.

Yanjun Xu is the first-ever Chinese intelligence agent to be extradited to the US to face charges. His trial began Oct. 19 in Cincinnati before US District Judge Timothy Black and he was ultimately convicted on Nov. 5.

“This case sends a clear message: we will hold accountable anyone attempting to steal American trade secrets,” said U.S. Attorney Kenneth L. Parker. “Xu conspired to steal American science and technology. Thanks to the diligent work of the FBI, GE Aviation, and our trial team, he’ll spend decades in federal prison.”

GE Aviation is headquartered in Evendale, Ohio.

The case underscores the threat of Cold War-Esque strategies by the People’s Republic of China to modernize its industries through theft of trade secrets, according to DOJ National Security Division Assistant Attorney General Matthew Olsen.

“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,” Olsen said. “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.”

FBI Counterintelligence Assistant Director Alan Kohler called Xu’s actions “state-sponsored economic espionage by the PRC designed to steal American technology and put Americans out of work.”

Kohler said the case should dispel doubts about the “real goals” of the PRC and serve as “a wake-up call” that “they are stealing American technology to benefit their economy and military.”

Olsen described Xu as a “card-carrying intelligence officer for economic espionage.” In fact, he was a deputy division director at the Chinese Ministry of State Security, China’s intelligence agency, who employed what Patel described as “classic spy techniques” to target US companies at the forefront of aviation research and development.

Beginning in 2013, says Patel, Xu recruited employees at those companies to travel to China, often on the pretense of giving a presentation at a university. The employees were paid stipends, and their travel costs were covered.

Among Xu’s efforts was the attempted theft of technology related to GE Aviation’s exclusive composite aircraft engine fan, which Patel says no other company in the world has been able to duplicate.

A GE Aviation employee was asked to give a report at a Chinese university in March 2017, according to Patel. The employee went to China in May of that year to give a presentation and was introduced to Xu.

In January 2018, Xu requested of the employee “system specification, design process” information, Patel says.

The employee emailed a two-page document from GE Aviation that included a label that warned about the disclosure of proprietary information. At the time, the employee and GE Aviation were working with the FBI.

A month later, Xu talked with the employee about a possible meeting in Europe and asked the employee to send a copy of the file directory for his GE Aviation-issued computer, Patel says.

Xu flew to Belgium on April 1, 2018, to meet with the employee and was arrested.

The DOJ Criminal Division’s Office of International Affairs successfully extradited Xu to the US with assistance from the government of Belgium as well as the Belgian Federal Police.

Patel announced Xu’s conviction Friday evening on two counts of conspiring and attempting to commit economic espionage, two counts of attempted theft of trade secrets and one count of conspiracy to commit trade secret theft.

“The jury, by its guilty verdict here today, held Xu accountable for his classic spy techniques,” said Patel. “Xu conspired to commit economic espionage on behalf of the Chinese government, and he tried to steal the valuable innovation and trade secrets of industry-leading American aviation technology companies. This Office will continue to seek to protect American innovation and hold accountable those who attempt to steal our nation’s science and technology, regardless of status or affiliation, whether civilian, military, or spy.”

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The long-held belief is that China has engaged a huge amount of resources in a concerted, Soviet-style effort to achieve military parity with the U.S. by means of intellectual property theft.

Its likelihood of success is a matter of debate. Some experts have argued there are areas of interest too internally complex to steal outright, such as stealth technology, and that the inevitability of a globally homogenized military IP landscape is overstated. Yet the threat remains, and both the Defense Department and the DOJ are taking it seriously.

Last week, a former U.S. Army helicopter pilot of 23 years who became a contractor was sentenced in federal court. The man acted as an agent for China and took thousands from the Chinese government to provide aviation-related information from the defense contractor that employed him.

But the alleged conspiracies go back years, and increasingly they appear to involve the reflow of China-made parts and infrastructure.

In a high-profile case from 2016, a Chinese national pleaded guilty to hacking into U.S. defense contractors’ computer networks to steal sensitive military data and sent them to China. The data related to the C-17 Globemaster, the Lockheed F-22 and F-35 stealth fighters and the Boeing V-22 Osprey.

Former Defense Secretary Mark Esper warned in 2019 China is perpetrating “the greatest intellectual property theft in human history.” His remarks came in the context of European leaders deciding whether to allow China-based Huawei, the world’s largest communications equipment manufacturer, to build 5G networks in their countries, according to Business Insider.

The DOJ indicted Huawei in January 2019.

Fast forward to October 2019, when the DOJ announced three cases filed against 13 alleged Chinese operatives. FBI Director Christopher A. Wray told the Washington Post the cases show Beijing is trying to “lie, cheat and steal” its way to a competitive advantage in technology.

Three of those suspects are accused in a 10-year intelligence campaign targeting U.S. residents to act as agents for China. The DOJ described it as “a wide-ranging and systematic effort to target and recruit individuals to act on behalf of the PRC in the United States with requests to provide information, materials, equipment, and assistance to the Chinese government in ways that would further China’s intelligence objectives.”

Two other suspects are accused of scheming to steal DOJ files and bribe a U.S. government employee related to the federal investigation and prosecution of an unnamed global telecommunications company based in China. The government employee, unbeknownst to the suspects, was working as a double agent for the U.S.

The Washington Post report links that case to Huawei.

A CNN report from July details an ultra-secret FBI investigation that determined Huawei equipment installed in the U.S. could disrupt U.S. nuclear arsenal communications.

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