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2/11/2008
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Two Arrests Made In Separate Chinese Espionage Cases

A Department of Defense analyst and former Boeing employee have links to the espionage case of a former defense contractor at Power Paragon.

The U.S. Department of Justice announced the arrests of four individuals on Monday and accused them of stealing military and aerospace secrets and sending them to China.

Tai Shen Kuo, age 58, and Yu Xin Kang, age 33, both of New Orleans, La., and Gregg William Bergersen, age 51, of Alexandria, Va., were arrested Monday for espionage. They're charged with sending classified U.S. government documents and data to the government of the People's Republic of China (PRC).

Bergersen worked as a Weapons Systems Policy Analyst at the Arlington, Va.-based Defense Security Cooperation Agency, which is part of the Department of Defense. Kuo, a furniture businessman, is a naturalized U.S. citizen and Kang is a Chinese citizen and a lawful permanent resident of the United States.

Separately, Dongfan "Greg" Chung, 72, of Orange, Calif., a former Boeing employee, was arrested at his home on Monday for allegedly sending information about the Space Shuttle, the C-17 military transport plane, and the Delta IV rocket to the PRC. Chung is a naturalized U.S. citizen and a native of China.

The cases have links to the espionage case of Chi Mak, 67, a former engineer for Anaheim, Calif.-based defense contractor Power Paragon, who was arrested in 2005 and convicted last year of spying for China, his native country, according to a U.S. Justice spokesperson.

Last month, Mak was denied a new trial; he is scheduled to be sentenced on March 24. His sister-in-law and nephew were arrested last month and charged with immigration violations; they face possible deportation.

The arrests follow rising alarm about hi-tech espionage conducted against the U.S. by China and other countries. Last November, the U.S.-China Economic and Security Review Commission (USCC) called Chinese espionage "the single greatest risk to the security of American technologies."

"The threat here is very simple," said Ken Wainstein, the assistant attorney general for National Security, in prepared remarks at a Washington, D.C., press conference on Monday. "It's a threat to our national security and to our economic position in the world -- the threat that is posed by the relentless efforts of foreign intelligence services to penetrate our security systems and steal our most sensitive military technology and information."

While the threat of espionage isn't new, Wainstein said it is a rising risk. "If anything, that threat has only increased with the rise of nonaligned nations that are all seeking advantage in the process of military development," he said. "In fact, one Defense Department report from 2006 noted a 43% increase in the number of suspicious foreign contacts reported by American defense firms -- many of which were presumably foreign operatives probing for protected military information."

Kuo tried to use PGP Desktop Home 9.5 for Windows to encrypt communications he was sending to a Chinese official, according to the FBI affidavit filed in connection with the criminal complaint. It didn't help.

"During later surveillance of Kuo's Internet activity and a court authorized surreptitious search of Kuo's residence, FBI personnel found and seized certain user files and other information necessary to operate the specific encryption packaged purchased by Kuo," the affidavit says.

The affidavit describes an all-encompassing surveillance operation directed at Kuo. In addition to physical surveillance, the FBI monitored his e-mail accounts at Bellsouth.net, Gmail, and Hotmail, as well as his telephone communications. The agency also surreptitiously copied the hard drive on Kuo's laptop and placed audio-visual surveillance equipment in a car Kuo rented.

Such vigilance was notably absent from the Chung case. The complaint against him charges that he began passing information to the Chinese government as far back as 1979.

Wainstein said that in the past six months, the Department of Justice has filed charges in six separate cases involving attempts to acquire different types of technology, including night-vision equipment and accelerometers used in smart bombs and missiles.

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