U.S. prosecutes more Chinese on intellectual property theft charges
A federal judge last week sentenced a Chinese national to nearly four years in prison for trying to steal U.S. space technology, the latest corporate spy snared by an FBI that has ramped up protection of American businesses amid President Trump’s trade war with Beijing.
Over the past year, the Justice Department has brought public charges against Chinese nationals and entities in 10 separate trade secret cases.
That represents a rapid increase from the three the department brought during the previous year, according to The Washington Times’ review of Justice Department records.
During the same time, Justice scored a guilty plea or conviction in eight older cases, The Times found.
Half of the 16 names on the FBI’s counterintelligence most wanted list are Chinese people charged with theft of intellectual property or trade secrets for Beijing’s benefit.
Among the guilty pleas reviewed by The Times was one from Tao Li, 39, a Chinese national sentenced Friday for conspiring to steal “highly sensitive” electronic components that can withstand significant levels of radiation and heat. The technology has military and space applications, prosecutors said.
Analysts say the increase in prosecutions is the result of the Trump administration’s attempt to limit economic damage wrought by China’s rampant theft of intellectual property, which costs American companies $225 billion to $600 billion a year, according to U.S. trade officials.
“It’s a recognition of exactly how much the country’s economic security is at risk. There are only so many times a business can lose $3 million or $4 million before the government is going to act,” said Nicholas Eftimiades, whose 34-year government career includes stints at the CIA and Defense and State departments.
Economic espionage is at the heart of Mr. Trump’s aggressive use of tariffs to force China to change its ways, though Beijing insists it doesn’t steal trade secrets.
However, the surge in prosecutions is largely the result of the Justice Department’s improved effectiveness in marshaling its efforts to tackle these cases, analysts say.
“I think we are seeing the Justice Department dedicate more resources to the effort and more cohesion to develop more cases,” said Ryan Fayhee, who spent 11 years prosecuting trade secret and espionage cases for the Justice Department before entering private practice.
That consolidation is a direct result of the China Initiative launched in November by then-Attorney General Jeff Sessions, Mr. Fayhee said.
Under the initiative, the Justice Department vowed to aggressively pursue Chinese trade secret theft cases and ensure enough resources are dedicated to prosecuting them quickly and efficiently.
Since the initiative’s launch, several high-profile cases involving Chinese espionage have made headlines.
A former General Electric employee was charged in April with stealing trade secrets to benefit two Chinese competitors in a scheme bankrolled by the Chinese government, prosecutors said.
The Justice Department in August accused a University of Kansas researcher of hiding his ties to a Chinese university while collecting tens of thousands of dollars in research grants from U.S. taxpayers.
In perhaps its largest action, the Justice Department hit the Chinese telecommunications company Huawei with a slew of charges, including stealing trade secrets from T-Mobile.
The FBI earlier this year added Xudong Yao, a 57-year-old software engineer, to its wanted list. U.S. authorities say he fled to China with the propriety source code for a locomotive control system developed by a suburban Chicago company.
Mr. Eftimiades said the caseload increased because the Justice Department is trying to catch up while China expands its espionage efforts.
“We’ve been involved in an 18-year war against terrorism while China was quietly and aggressively moving forward,” he said. “It didn’t become a priority until China started exercising its military power at the expense of the United States, putting us at a strategic disadvantage.”
The China initiative has yielded mixed results, analysts say. Mr. Eftimiades said it has protected companies but has not stopped China from stealing U.S. technology.
“You can point to X number dollars that have been saved or individuals arrested, but it hasn’t deterred China at all,” he said.
Instead, he said, U.S. officials must partner with businesses if they want to successfully combat this threat.
“China’s whole society approach necessitates a whole government response,” he said. “Our government needs to get out of the mindset of trying to do everything by itself. The industry is the target, and they have a place in protecting U.S. security.”