Chinese Man Charged in Plot to Steal U.S. Military Data

A Chinese citizen was charged with plotting to steal data from U.S. defense contractors, including a successful hack of Boeing Co. (BA)’s computer system, amid an expanding crackdown on industrial espionage by China.

Su Bin, the owner of a Chinese aviation technology company with an office in Canada, conspired with two unidentified individuals in China to break into the computer networks of U.S. companies to get information related to military projects, according to charges unsealed July 10 in federal court in Los Angeles. Su advised the two others in China on what data to target, according to the charges.

Su’s alleged co-conspirators claimed to have stolen 65 gigabytes of data from Boeing related to the C-17 military cargo plane, according to the criminal complaint. They also allegedly sought data related to other aircraft, including Lockheed Martin Corp. (LMT)’s F-22 and F-35 fighter jets.

More on Cybersecurity:

The Obama administration escalated its effort to punish technology theft in May, charging five Chinese military officials with stealing trade secrets through cyber-espionage and casting the hacker attacks as a direct economic threat. Secretary of State John Kerry, who visited China this week, said the hacking has a “chilling effect on innovation.” Chinese state-run media in return have alleged that products made by U.S. companies, including Apple Inc. (AAPL) iPhones, pose a security threat.

Safeguarding Information

Boeing said yesterday in an e-mailed statement that safeguarding information and intellectual property is a “top priority” and the planemaker is cooperating with the FBI, the U.S. Attorney’s Office and the Air Force Office of Special Investigations.

“We appreciate that the government brought its concerns about a potential compromise of our protected computer systems to our attention,” Chicago-based Boeing said. “Our cooperation with the government’s investigation demonstrates the company’s commitment to holding accountable individuals who perpetrate economic espionage or trade secret theft against U.S. companies.”

Has the Internet Ever Seemed Scarier?

Su was arrested in British Columbia on June 28, Lyse Cantin, a spokeswoman for the Canadian Department of Justice, said in a statement. A bail hearing is scheduled for July 18, Cantin said.

Laura Eimiller, a spokeswoman for the FBI in Los Angeles, declined to comment on the people or entities that Su worked for.

No one answered a phone call to the Chinese embassy in Washington seeking comment yesterday after regular business hours on the Su case.

Multiple Organizations

Su owns an aviation technology company called Lode-Tech and is in contact with Chinese military and commercial aerospace entities, according to the criminal complaint.

The two unidentified Chinese individuals are “affiliated with multiple organizations and entities in the PRC,” according to U.S. prosecutors.

They are involved with an “entity” that has set up technology bases and does surveillance work and intelligence collection outside China to “avoid diplomatic and legal complications,” according to the criminal complaint, citing a report one of the two individuals sent to the other.

They helped gather information about 32 U.S. military projects, many of which involved multiple defense contractors, according to the filing, citing a Feb. 27, 2012, e-mail between the two Chinese individuals. Su has been working with the two other individuals since the summer of 2009, according to the criminal complaint.

The Boeing C-17 data was stolen in 2010 and there’s no evidence it includes classified information, prosecutors said.

‘Big Money’

Su and one of his co-conspirators in China were also looking to sell the C-17 information and other technology they stole for “big money” to Chinese aircraft corporations, according to the U.S., which cited e-mails between the two.

Su said in an e-mail to one of the co-conspirators: “It’s not that easy to sell the information. If money is collected for the sample of 17, it won’t be easy to collect your big money that would follow.”

In another e-mail, Su said “They are too stingy!” without identifying who he was referring to.

Su and the other individuals were seeking information that they could match to buyers or customers willing to pay a significant price, prosecutors said.

F-22 Component

They also obtained information about an F-22 component and a flight test plan for the F-35., according to the criminal complaint. An additional report Su sent to the two people in China in 2011 pertained to an unidentified U.S. “Project A” that would allow them to “stand easily on the giant’s shoulders,” according to the complaint.

“Lockheed Martin is cooperating with the government’s investigation into the matter,” Jennifer Allen, a spokeswoman for the Bethesda, Maryland-based company, said in an e-mailed statement. Allen referred further questions to the Federal Bureau of Investigation.

Boeing in April said it moved up its schedule to close its C-17 aircraft final assembly plant in Long Beach, California, by three months to the middle of 2015. Boeing said the adjustment was a result of “current market trends and the timing of expected orders.” The company first announced plans to end C-17 production in September 2013.

C-17 Globemaster

The C-17 Globemaster is a four-engine military transport that has “delivered cargo in every worldwide operation since the 1990s,” according to Boeing’s website. The plane, which can refuel in flight, can accommodate loads as bulky as the M-1 Abrams, the U.S. Army’s main battle tank.

China’s Y-20 shares some of the same attributes, with four engines mounted on wings placed high on the fuselage. Like the C-17, the Y-20 also has its main, multiwheel undercarriage set close to the hull, an arrangement common among military cargo planes to ease loading and unloading.

There are 216 Globemasters deployed among 12 U.S. military bases, according to Boeing’s website. Smaller detachments are in service in the U.K., Australia, Canada, Hungary, Qatar and the United Arab Emirates.

The case is U.S. v. Su Bin, 14-01318, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in federal court in Los Angeles at

epettersson@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.