Former Manager For International Airline Pleads Guilty To Acting As An Agent Of The Chinese Government

The U.S. Justice Department released the below information:

In Brooklyn, New York, Ying Lin pleaded guilty to acting as an agent of the People’s Republic of China (PRC), without notification to the Attorney General, by working at the direction and control of military officers assigned to the Permanent Mission of the People’s Republic of China to the United Nations.  Lin, a former manager with an international air carrier headquartered in the PRC (the Air Carrier), abused her privileges to transport packages from John F. Kennedy International Airport (JFK Airport) to the PRC aboard Air Carrier flights at the behest of the PRC military officers and in violation of Transportation Security Administration (TSA) regulations.  The proceeding was held before United States District Judge Ann M. Donnelly.

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr of the FBI’s New York Field Office, and Special Agent in Charge Angel M. Melendez, Department of Homeland Security, Homeland Security Investigations (HSI) announced the guilty plea.

“This case is a stark example of the Chinese government using the employees of Chinese companies doing business here to engage in illegal activity,” said Assistant Attorney General Demers.  “Covertly doing the Chinese military’s bidding on U.S. soil is a crime, and Lin and the Chinese military took advantage of a commercial enterprise to evade legitimate U.S. government oversight.”

“The defendant’s actions as an agent of the Chinese government helped Chinese military officers to evade U.S. law enforcement scrutiny of packages that they sent from New York to Beijing,” stated United States Attorney Donoghue.  “This case demonstrates how seriously we address counterintelligence threats posed by individuals in the United States who work for foreign governments, such as China.” 

“The FBI and our law enforcement partners do all we can every day to protect this country from the threats we can see, and we work even harder to find the threats we can’t see,” said FBI Assistant Director-in-Charge Sweeney.  “Ms. Lin was secreting packages through some of the country's busiest airports, using her work with the Chinese government to thwart our security measures.  We believe this case isn’t unique and hope it serves as an example that the Chinese and other foreign governments can't break our laws with impunity.”

“Lin’s criminal actions exploited the international boundary of the United States as she used her position to smuggle packages onto planes headed to China,” said HSI Special Agent-in-Charge Melendez. “We are committed to ensuring the integrity of our international airports so they are not used as a front for illicit activities.”

Lin worked for the Air Carrier from 2002 through the fall of 2015 as a counter agent at JFK Airport and from the fall of 2015 through April 2016 as the station manager at Newark Liberty International Airport.  During her employment with the Air Carrier, Lin accepted packages from the PRC military officers, and placed those packages aboard Air Carrier flights to the PRC as unaccompanied luggage or checked in the packages under the names of other passengers flying on those flights.  As the PRC military officers did not travel on those flights, Lin’s actions were contrary to a security program that required that checked baggage be accepted only from ticketed passengers, thereby violating TSA regulations.  In addition, Lin encouraged other Air Carrier employees to assist the PRC military officers, instructing those employees that because the Air Carrier was a PRC company, their primary loyalty should be to the PRC.

In exchange for her work at the direction and under the control of PRC military officers and other PRC government officials, Lin received benefits from the PRC Mission and PRC Consulate in New York.  These benefits included tax-exempt purchases of liquor, cigarettes and electronic devices worth tens of thousands of dollars.  These benefits also included free contracting work at the defendant’s two residences in Queens, New York, by PRC construction workers who were permitted under the terms of their visas to work only on PRC government facilities.

When sentenced, Lin faces up to 10 years’ imprisonment.  As part of the guilty plea, Lin agreed to forfeit approximately $25,000 as well as an additional $145,000 in connection with her resolution of the government’s forfeiture verdict in United States v. Zhong, No. 16-CR-614 (AMD).

Mr. Demers and Mr. Donoghue expressed their appreciation to the Transportation Security Administration for their assistance on the case.  The government’s case is being handled by the National Security and Cybercrime Section.  Assistant United States Attorneys Douglas M. Pravda, Alexander A. Solomon, Ian C. Richardson and Sarah M. Evans are in charge of the prosecution, with assistance from Trial Attorney Matthew R. Walczewski of the Department of Justice’s Counterintelligence and Export Control Section.  The forfeiture aspect of the case is being handled by EDNY Assistant United States Attorney Brian Morris of the Office’s Civil Division.

Critical Infrastructure Vulnerable To Attack, NSA Deputy Director Says

David Vergun at the Army News Service offers the below piece:

WEST POINT, N.Y., April 21, 2016 — Strong dependence on industrial control systems, or ICS, is a serious vulnerability for industry, the National Security Agency’s deputy director said here yesterday.

"There's no doubt that Chinese military planners understand the importance of industrial control systems and the critical infrastructure they control," Richard H. Ledgett Jr. (seen in the above DoD released photo) said in his keynote address during a dinner at the Joint Service Academy Cyber Security Summit at the U.S. Military Academy.

Security Threat Inadequately Addressed

Historically, ICS has been strong because of its obscurity, he explained, calling it "weird software with proprietary systems."

But over time, ICS has become less obscure, and providers, working on thin profit margins, haven't adequately addressed the security threat, he said. "Adversaries are seeing what they can get by compromising those industrial control systems," he added.

In 2007, Idaho National Laboratory ran the Aurora Generator experiment, which demonstrated that the electric grid could be compromised. There are other notable examples, he said.

"You don't need to cause physical harm to affect critical infrastructure assets," Ledgett pointed out. For instance, he said, remote hackers using stolen credentials caused a Ukrainian blackout about four months ago that took down the country’s entire power grid.

"These are all fairly significant events," he said. "We're seeing more and more of that by adversaries."

Internet of Things

More and more devices are being connected to the Internet, Ledgett noted. Some 6.4 billion things worldwide will be connected by the Internet this year, he said, and by 2020, that number will be about 20.8 billion. The challenge is identifying emerging risks and vulnerabilities that come about with the introduction of new hardware and software, he said.

"Any system is only as strong as its weakest link," Ledgett said. Most types of devices connected to the Internet are built with differing security profiles and updated on differing timescales, and every time it's updated, that's another opportunity for a security vulnerability, he added.

Cybercrime is one example, Ledgett said. A million pieces of malware come out every day, he said, and 1.5 million criminal cyber events take place every year.

"Today, anyone with a computer and a fairly decent level of knowledge and an Internet connection can pose a very serious threat to an individual, a business, a city and a foreign nation," he said.

The Joint Service Academy Cyber Security Summit was co-hosted by the Army Cyber Institute and Palo Alto Networks.

Chinese National Sentenced For Illegally Exporting Military Electronics Componets

The U.S. Justice Department and the FBI released the below information on September 10th:

BOSTON—Zhen Zhou Wu, a Chinese national, was re-sentenced yesterday to 84 months in prison for conspiring over a 10-year period to illegally export military and sophisticated electronics to the People’s Republic of China (PRC).

Wu was also convicted of illegally exporting sensitive electronic components to the PRC on 12 occasions between 2004 and 2007. Several Chinese military entities were among those to whom the defendant exported the equipment, which is used in military phased array radar, electronic warfare, and missile systems. He was also ordered to pay a $15,000 fine. After serving his sentence, Wu will be subject to deportation to the PRC.

On March 19, 2013, the U.S. Court of Appeals for the First Circuit affirmed Wu’s conviction on 15 of the 17 counts of export violations for which a jury convicted him after a six-week trial in 2010. The First Circuit vacated two counts of conviction that charged Wu with illegally exporting parts designated on the United States Munitions List because it held that the jury instructions given were constitutionally inadequate. However, the First Circuit observed that “from 1996 until 2008, Wu and his co-defendant, Yufeng Wei, shipped tens of millions of dollars worth of sophisticated electronic components from the United States to China, with little regard for whether the parts that they sold were export-controlled.” Further, the First Circuit found that Wu’s company “specifically pursued military customers; and Wu promoted himself as both an exporter of military supplies and an export compliance expert.” Lastly, the First Circuit determined that “Wu and Wei repeatedly attempted to disguise the fact that they were exporting to China and that they lacked the necessary licenses to do so.”

Because two counts of the conviction were vacated, the case was remanded for a re-sentencing hearing. Wei’s re-sentencing hearing has not yet been scheduled.

On May 17, 2010, Wu; his ex-wife, We;, and his company, Chitron Electronics Inc., were convicted of conspiring to unlawfully export to the PRC military electronics from 1997 to 2007 and export restricted electronics components and illegally exporting such parts to the PRC on numerous occasions between 2004 and 2007. The defendants’ illegal enterprise involved the use of Chitron Electronics Inc., a company Wu established in Waltham, Massachusetts, as a front company for its parent company, Chitron Electronics Limited, headquartered in Shenzhen, PRC. Wu used Chitron-US to procure export restricted equipment from U.S. suppliers and then export the goods to from Waltham to China through Hong Kong without the suppliers’ knowledge. The exported equipment is used in electronic warfare, military radar, fire control, military guidance and control equipment, missile systems, and satellite communications. Many of Chitron’s customers were Chinese military research institutes and military entities respon

The Department of Defense’s Defense Technology Security Administration concluded in a report filed with the court that the defendants’ activities in this case seriously threatened “U.S. national and regional security interests.” According to the Department of Defense, the parts the defendants were convicted of illegally exporting are “vital for Chinese military electronic warfare, military radar, fire control, military guidance and control equipment, and satellite communications.” The report further concluded that the illegally exported parts are “precisely the [types of] items...that the People’s Liberation Army actively seeks to acquire.”

United States Attorney Carmen M. Ortiz; Acting Assistant Attorney General John P. Carlin of the Justice Department’s National Security Division; John J. McKenna, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office; Bruce Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Leigh-Alistair Barzey, Resident Agent in Charge of Defense Criminal Investigative Service in Boston made the announcement. The case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit. 

Defense Secretary Chides Communist China For Cyber-Espionage

Ernesto Londondo at the Washington Post offers a piece on Defense Secretary Chuck Hagel (seen in the above DoD photo) confronting the Communsist Chinese over cyber-espionage.

SINGAPORE — Defense Secretary Chuck Hagel took China to task for alleged cyber-espionage on Saturday, drawing a sharp response from a Chinese general who questioned whether the United States’ growing military presence in Asia is anything more than a challenge to Beijing’s rise.

Delivering the keynote speech at the annual security summit here known as the Shangri-La Dialogue, Hagel said the United States is “clear-eyed about the challenges in cyber” and echoed past assertions by the Obama administration that multiplying cyberattacks on U.S. government and industry portals “appear to be tied to the Chinese government and military.”

You can read the rest of the story via the below link:

http://www.washingtonpost.com/world/hagel-rebukes-china-for-cyber-espionage/2013/06/01/da9c1c6c-ca6f-11e2-9cd9-3b9a22a4000a_story.html