US Charges Chinese Army Hackers With Stealing Secrets

Giuseppe Macri Tech Editor
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U.S. Attorney General Eric Holder on Monday formally indicted five officers of the Chinese People’s Liberation Army with economic espionage, trade secret theft, identity theft, conspiracy to commit computer fraud and other crimes against American companies.

“Success in the global market place should be based solely on a company’s ability to innovate and compete, not on a sponsor government’s ability to spy and steal business secrets,” the attorney general said in a DOJ statement Monday. “This administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market.”

The 31 charges mark the first time the U.S. has officially accused another nation of economic espionage, and names six specific companies as alleged victims of intellectual property theft of plant designs, pricing, cost and strategy: Aluminum manufacturer Alcoa, specialty metals producer Allegheny Technologies Incorporated, electric power parts manufacturer Westinghouse, solar energy component maker SolarWorld, U.S. Steel and the U.S. Steelworkers Union.

“We do not collect intelligence to provide competitive advantage to the U.S. or to the U.S. economic sector,” Holder said in a press conference.

The Justice Department head said the U.S. economy is “directly linked to national security.”

“The alleged hacking appears to have been conducted for no reason other than to advantage state-owned companies and other interests in China, at the expense of businesses here in the United States,” Holder said. “The success of American companies since our nation’s founding has been the result of hard work… this is how it ought to be across the globe.”

According to the Washington Post the DOJ has been preparing federal prosecutors to aggressively address cyber espionage and related crimes since 2012, especially in regard to China, which has been the worst offender next to Russia and Iran. Cyber espionage is estimated to cost the U.S. economy from $24 to $120 billion every year.

Last May Chinese hackers accessed blueprints for more than two dozen major U.S. weapons systems — including the new F-35 fighter jet under joint DOD and Lockheed Martin development — in the most prolific and damaging instance of cyber espionage yet, compromising not only intellectual property, but national security as well.

China has responded by canceling a joint U.S.-China cybersecurity forum, and described the charges as “made up” and damaging to “Sino-American cooperation and mutual trust” in a BBC report.

“China is a staunch defender of network security, and the Chinese government, military and associated personnel have never engaged in online theft of trade secrets,” Chinese foreign ministry spokesman Qin Gang said.

The Verge reports Chinese hackers have targeted not only defense contractors but U.S. presidential campaigns, American Universities, media outlets, Silicon Valley giants like Google and other U.S.-based entities.

Officers named in the indictment include Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui of Unit 61398 of the Third Department of the Chinese People’s Liberation Army. It’s unclear what, if any, attempts will be made make the five stand trial in the U.S.

Despite the uncertainty, DOJ officials assert this is merely the first of many forthcoming actions.

“This is the new normal,” FBI Executive Associate Director Robert Anderson said.

“The indictment announced today is an important step,” FBI Director James B. Comey said in Monday’s DOJ statement. “But there are many more victims, and there is much more to be done.  With our unique criminal and national security authorities, we will continue to use all legal tools at our disposal to counter cyber espionage from all sources.”

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