U.S Federal Court Convicts Senior Chinese Intelligence Officer of Economic Espionage, Theft Of GE Aviation Trade Secrets

A U.S federal jury on Friday (Nov 5) convicted Yanjun Xu, a senior Chinese intelligence official, of conspiring to and attempting to commit economic espionage and theft of trade secrets.

Yanjun Xu was the first Chinese intelligence officer to be extradited to the United States .

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.

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.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

In Oct 18, Yanjun Xu, who also goes with at least two other aliases Qu Hui and Zhang Hui, was arrested and charged for allegedly attempting to steal trade secrets from GE Aviation and other US aerospace companies.

Xu was serving as the deputy director of China's Ministry of State Security (MSS), the country's intelligence agency. He was extradited to the US with co-operation from Belgian authorities and faced judicial trial.

Xu was charged with attempting to steal classified information on composite materials used in GE's fan blades and fan blade encasement. These speciality materials are more durable, weigh less and cost less.The composites are a pivotal component in the Leap engine developed by West Chester-based CFM, a joint venture between GE Aviation and Snecma Moteurs of France. The engine powers the Airbus A320 Neo, the Boeing 737 Max and the China Comac C919.

Xu used multiple aliases to target specific companies in the United States and abroad that are recognized as leaders in the field of aviation. He identified experts who worked for the companies and recruited them to travel to China, often initially under the guise that they were traveling to give a presentation at a university. Xu and others paid the experts stipends on top of covering travel costs.

In March 2017, a GE Aviation employee in Cincinnati, Ohio, was solicited to give a report at a university in China. The employee traveled to China two months later to present at the university and was introduced to Xu. Xu and others paid the employee’s travel expenses and a stipend.

In January 2018, Xu requested “system specification, design process” information from the employee and – 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.

In February 2018, Xu began discussing with the employee the possibility of meeting in Europe during one of the employee’s business trips and asked the employee to send a copy of the file directory for his company-issued computer.

Xu traveled to Belgium on April 1, 2018, to meet with the employee and was arrested at that time.

“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.

“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. “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.”

Also Read: China Waging An Espionage War On The US? Top Chinese Spy Accused Of Stealing Sensitive Aviation Secrets