United States Indicts Five Chinese Members of China’s People’s Liberation Army for Cyber-theft of American Industrial Trade Secrets

I’ve been blogging about reports of alleged Chinese sponsorship of industrial espionage for as long as I’ve been blogging about this topic. Not only during the last decade have there been numerous successful prosecutions of Chinese nationals who came to America and got caught either stealing or purchasing stolen technology of various industrial interests, but we had Congressional hearings regarding the Economic Espionage Act and its reach and effectiveness and even Congressional vetoes over Chinese technology companies getting access to the American marketplace. NOW we turn another corner and learn the Justice Department has indicted five Chinese nationals, in absentia, who worked for “Unit 61398″ of the PLA and allegedly masterminded the repeated cyber-thefts of lots of American technology and secrets.

The indictment, filed by the US Attorney’s Office for the Western District of Pennsylvania, where many of the US companies who were alleged victims are based, names five Chinese nationals who worked for China’s People’s Liberation Army (PLA) in Unit 61398, a cyber-intelligence-gathering section. It alleges that state-owned companies hired the unit to provide “information technology services” that included economic cyber-espionage.

According to The Christian Science Monitor and the excellent reporting of Mark Clayton “the stolen trade secrets would in some cases give Chinese companies insights into US companies’ pricing, manufacturing techniques, and negotiating positions. In other cases, the five conspirators stole sensitive e-mails and other documents that gave Chinese firms insider knowledge of strategy and vulnerabilities of those US companies, it adds. The US companies attacked are in the steel, solar, nuclear power, and specialty metals industries.”

Mr. Clayton’s piece, quoting from the indictment, goes on to note “The indictment alleges that five defendants – Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui – are officers of Unit 61398 of the Third Department of the PLA who hacked into the computer networks of five US companies and the United Steelworkers Union. Mr. Huang and Mr. Gu, meanwhile, are said to also have managed computer domain accounts that the hackers used in their attacks. Once inside, the PLA hackers set up back doors on the companies’ networks so they could maintain their clandestine footholds even if discovered – all the while downloading gigabytes of proprietary data useful to state-owned Chinese companies that compete with the American companies.”

These indicted PLA agents cannot be tried, pursuant to American criminal procedure, in absentia. As such, these indictments will surely not result in a trial because there is virtually zero chance that the United States will ever be able to bring these indicted men to our shores for a trial. Nonetheless this represents a shot across China’s bow by the United States that our country is aware of what the PLA and Unit 61398 are doing and where they are doing it. As expected, the Chinese have responded with allegations of United States based cyber-spying and claims of its own victimization.

To read the Mark Clayton’s excellent piece, click this link: http://www.csmonitor.com/World/Security-Watch/Cyber-Conflict-Monitor/2014/0519/US-indicts-five-in-China-s-secret-Unit-61398-for-cyber-spying-on-US-firms-video.