Economic Spying by China Spurs New Tactics From U.S. Prosecutors

The Justice Department is revamping the way it fights the increasing theft of U.S. trade secrets by foreign governments, particularly China, a top U.S. official said.

“The threat has changed,” Assistant Attorney General John Carlin said in an interview. “We are seeing powerful, dedicated nation-state activity focused on our private sector with the goal of stealing as much as they can.”

Carlin’s remarks come the same week the Justice Department unveiled a 32-count indictment charging six Chinese citizens with stealing wireless technology from two U.S. firms and sharing it with the Chinese government.

The charges, announced on Tuesday, represented the latest move by the U.S. government to pressure Beijing to stop what American officials call the widespread theft of trade secrets to benefit China’s commercial and military industries. U.S. officials have said economic espionage costs the U.S. economy hundreds of billions of dollars each year.

To better counter such threats, Carlin said, the Justice Department has reorganized its elite counterespionage units. For example, the agency’s 250-attorney National Security Division last fall created a new high-level position to oversee the prosecutions of economic espionage crimes.

The department has also boosted training for lawyers on how to battle cyber spies, Carlin said, and improved outreach efforts to private companies to encourage cooperation with federal agents and prosecutors.

Hiring Prosecutors

Carlin hopes to hire about 50 more national security prosecutors over the next two years, in part to handle the increase in economic espionage investigations, according to Justice Department spokesman Marc Raimondi. He declined to provide a more specific breakdown of the workload involving economic spying.

“Intelligence has been telling us that certain state actors are really focusing the bulk of their espionage activity, not just on the government actors, as they traditionally did in the Cold War, but on the private sector,” Carlin said.

In the case unsealed this week, prosecutors allege that two Chinese researchers in the U.S. conspired with officials at a state-run university in China to steal wireless technology from San Jose, California-based Avago Technologies Ltd. and Skyworks Solutions Inc. and mass produce it back home.

It’s at least the 11th case in which the U.S. government has charged someone with economic espionage since the statute was enacted by Congress in 1996, the Justice Department said.

‘Grave Concern’

Chinese Ministry of Foreign Affairs spokesman Hong Lei said in response to questions about the case that China was reviewing the allegations.

“China expresses grave concern about this case,” Hong said at the ministry’s Wednesday press briefing in Beijing. “The Chinese government will make sure in bilateral exchanges that Chinese citizens’ rights and interests will not be harmed.”

The U.S. government has been pressuring China to halt economic spying, an effort that culminated in last year’s indictment of five Chinese military officials on charges of cyber-espionage. The Justice Department alleged that the hackers conspired to steal information from U.S. entities that would be useful to competitors in China.

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