Chinese spy charged with stealing US aviation secrets

By Ellen Nakashima / The Washington Post

In a rare feat, federal agents lured a Chinese government spy to Belgium, where authorities transferred him this week to the United States for prosecution on economic espionage charges, U.S. officials said Wednesday.

Yanjun Xu, a senior officer with the Ministry of State Security, is accused of seeking to steal trade secrets from leading defense aviation firms, top Justice Department officials said. His capture helps vindicate U.S. law enforcement officials who have faced criticism in recent years that indictments of foreign operatives are not likely to result in the defendants setting foot in a courtroom.

Officials and former officials said it is apparently the first time that a Chinese government spy has been brought to the United States to face charges.

The announcement comes as the Trump administration has significantly ramped up its rhetoric against China amid a trade war and general worsening of relations between the world powers. Last week Vice President Mike Pence accused Chinese security agencies of “mastermind[ing] the wholesale theft of American technology – including cutting-edge” military blueprints.

Justice Department officials said the indictment is but the latest example of China seeking to develop its economy at the expense of American firms and know-how.

“No one begrudges a nation that generates the most innovative ideas and from them develops the best technology,” Assistant Attorney General for National Security John Demers said. “But we cannot tolerate a nation stealing our firepower and the fruits of our brainpower. We will not tolerate a nation that reaps what it does not sow.”

Xu, also known as Qu Hui and Zhang Hui, was charged with conspiring and attempting to commit economic espionage and steal trade secrets from multiple U.S. aviation and aerospace companies. The indictment was unsealed Wednesday – the same day that Xu appeared in federal court in Cincinnati.

“This case shows that federal law enforcement agencies cannot only detect and disrupt espionage, but can also catch its perpetrators,” said U.S. Attorney for the Southern District of Ohio Benjamin Glassman.

The MSS is a civilian spy agency responsible for counterintelligence, foreign intelligence and domestic political security. It has also been implicated in a major hack of a Navy contractor developing undersea warfare capabilities, including secret plans to build a supersonic anti-ship missile for use on U.S. submarines by 2020.

Xu is a deputy division director with the Jiangsu Province Ministry of State Security [JSSD], a provincial arm of the MSS.

“If not the first, this is an exceptionally rare achievement – that you’re able to catch an espionage operative and have them extradited to the United States,” said John Carlin, a former assistant attorney general for national security. “It significantly raises the stakes for China and is a part of the deterrence program that some people thought would never be possible.”

Beginning in December 2013 and continuing until his April 1 arrest in Belgium, Xu targeted experts working for aeronautics companies inside and outside the United States, including Cincinnati-based GE Aviation, officials said. GE Aviation has spent decades developing its unique jet engines and fan blades.

Xu recruited the experts to travel to China, often under the guise of asking them to deliver a university presentation and passing himself off as an official with the Jiangsu Science and Technology Association.

“I can’t recall an economic espionage case where we first arrested the person they were running inside the United States and then got the person running him from overseas,” said Carlin, author of the forthcoming book Dawn of the Code War, said.

Xu often exchanged information with individuals at Nanjing University of Aeronautics and Astronomics [NUAA], one of the top engineering schools in China and which has significant influence over China’s aerospace industry, according to court documents.

GE Aviation cooperated with the FBI early on in the investigation, which dates back more than a year, officials said.

Xu’s case is linked to the arrest last month of Ji Chaoqun, 27, a Chinese citizen living in Chicago, according to individuals familiar with the matter. Ji was accused of passing information on eight Americans to Chinese intelligence officers for possible recruitment.

Ji targeted individuals in science and tech industries, seven of whom worked for or recently retired from U.S. defense contractors. All were naturalized U.S. citizens born in Taiwan or China.