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Surging Chinese Espionage Targets U. S. Space Components

Chinese Fengyun-2 spin stabilized geosynchronous orbit weather satellite is placed in its Long March faring at the Xichang launch site in January 2012. Photo Credit: China Defense Mashup.com

The FBI is pursuing a growing number of Chinese agents trying to obtain and smuggle U. S. space system components into China for use in spacecraft being developed by the Chinese People’s Liberation Army (PLA).

“Multiple cases of economic espionage and theft of dual use and military technology have uncovered pervasive Chinese collection activities”,  Army Lt. Gen. Ronald L. Burgess Jr.  Director of the Defense Intelligence Agency (DIA) told the Senate Armed Services Committee Feb. 16.

“China has used its intelligence services to gather information via a significant network of agents and contacts utilizing a variety of methods to obtain U. S. technology to advance their defense industries, global command and control and strategic warfighting capabilities, the DIA director said in a formal Threat Assessment document and briefing to the Congress.

Key missile and stealth technology is also a target of increased Chinese espionage, Justice Dept prosecutions indicate.

Chinese economic espionage and smuggling has already involved secret technology from the Delta IV launch vehicle, space shuttle, the B-2 bomber and space radiation hardened components.

U. S. analysts agree that China is developing a broad range of new military spacecraft and that by smuggling in U. S. space components and designs is a way to increase the capability and reliability of these satellites.

Just this month a Chinese national was indicted by a federal grand jury in Colorado on charges of conspiracy and violations of the Munitions Control Act for allegedly attempting to ship to China hundreds of U. S. satellite computer chips packaged as baby formula.

The radiation hardened chips were bound for Shanghai, where they would have likely ended up inside spacecraft being developed by the PLA,  according to documents involved in the case.

Rare image shows a Chinese Beidou navigation spacecraft being lowered into a vacuum chamber for testing. Photo Credit: China Defense Mashup.com

Chinese manufacturers have not yet mastered hardening microchips that are as well protected against space radiation as U. S. made chips.  The lack of such protected circuits can be fatal to a spacecraft. For example, the Russians found that the recent failure their Phobos mission craft occurred because its circuits contained non radiation hardened chips.

The U. S. components involve in the most recent China case are radiation hardened “programmable read-only memory” (PROM) devices that facilitate the start-up of space based computer systems and also “static random access memory” (SRAM) devices to store information in space-based hard drives.

“China relies on foreign technology, acquisition of key dual-use components…to advance its military modernization,” says a 2011 Defense Dept. report to Congress.

China “also utilizes a large, well-organized network of enterprises, defense factories, affiliated research institutes, and computer network operations to facilitate the [smuggling] of sensitive U. S. information and export-controlled technology,” says the Defense Dept.  report.

According to the grand jury indictment returned earlier this month in Colorado, federal investigators allege the man, Philip Chaohui He (aka Philip Hope) purchased more than 300 integrated circuits in May, 2011 from Aeroflex, a company in Colorado Springs, Colorado. Court papers state that Aeroflex employees grew suspicious of Mr. He’s motives for buying such components.

Mr. He planned to send the electronics to China in two shipments, one in July, 2011, and another in October, the indictment says.
According to the indictment, the first shipment allegedly contained the PROM computer chips. Mr. He allegedly smuggled those into China himself during the summer of 2011 by carrying them into Mexico with a co-conspirator, then flying them from Mexico City to Shanghai, federal authorities believe.

The second shipment that led to his arrest had the SRAM chips, the indictment says.

The indictment alleges that Mr. He drove to the port of Long Beach on Dec. 11, 2011 with the 200 radiation hardened SRAM integrated circuits worth nearly $550,000 in the trunk of his car. The chips were concealed in plastic infant formula containers inside five sealed boxes marked “baby milk powder” in Chinese, the indictment says.

The indictment alleges that at the port,  Mr. He met two men, including one with a Chinese passport “in front of a docked ship bearing a Chinese flag. The Chinese flagged ship was registered to Zhenhua Port Machinery Co. Ltd.  a subsidiary of the  Chinese government owned corporation China Communications Construction”.  The ship was scheduled to return to China in a few days.

After his arrest, he was extradited back to Colorado where if convicted he faces up to 35 years in prison and up to $1.5 million in fines on charges of conspiracy, attempted unlawful export and attempted smuggling of U. S. defense articles.

China’s most powerful satcom is the DFH-4 spacecraft bus. Photo Credit: China Defense Mashup.com

The Justice Dept.  cited other cases of Chinese space component smuggling. Investigators from the FBI, Immigration and Customs Enforcement (ICE)and the Pentagon’s Defense Criminal Investigative Service (DCIS) have worked several recent important cases. They are:

Economic Espionage / Theft of Shuttle and Delta IV Secrets– According to the Justice Dept., NASA investigators and the FBI collaborated on the FBI arrest of Dongfan “Greg” Chung, a former Rockwell and Boeing engineer on charges of “economic espionage” and the shipment to China of restricted technology and Boeing trade secrets involving the space shuttle and the Delta IV launch vehicle. Chung has been sentenced to 15 years in prison and three years of close supervision after serving his term.

NASA and the FBI discovered that Chung served as an illegal agent of China for more than 30 years and kept more than 300,000 pages of Boeing secrets stashed in his home as part of his Chinese espionage mission. The Justice Dept. says the documents were shipped to China by mail, by ship and also routed by another U. S. based Chinese agent named Chi Mak.  Shuttle and Delta IV secrets were also sent to China by diplomatic pouch from the Chinese Consulate in San Francisco, the Justice Dept. says. Chung also made several verbal briefings in China to government military and technology personnel.

More Radiation-Hardened Defense Components–On March 24, 2011, Lian Yang, a Chinese resident of Washington state, pleaded guilty to conspiring to violate the Arms Export Control Act by attempting to sell radiation hardened military and aerospace technology to China. Yang attempted to purchase and export from the United States to China 300 radiation-hardened, PROM programmable semiconductor devices that are used in satellites.  The complaint alleges that Yang contemplated creating a shell company in the United States that would appear to be purchasing the parts, concealing the fact that the parts were to be shipped to China.

In another case, the Justice Dept says that two Chinese nationals, Hong Wei Xian, and Li Li, have pleaded guilty in federal court in Virginia for conspiring to violate the Arms Export Control Act by attempting to export more PROM circuits designed for satellite use. The pair is associated with the Beijing Space Science and Technology Development Company, China’s primary contractor for satellite and launch vehicle development. They have been sentenced to two years in prison.

Military Technical Data to China – Another Chinese man “Sixing Liu”, aka “Steve Liu,” of Deerfield, Ill., has been arrested in Chicago on a criminal charge of exporting defense-related technical data without a license. Liu, a native of China with a doctorate degree in electrical engineering, worked as a senior staff engineer for Space & Navigation, a New Jersey-based division of L-3 Communications.

He was part of a team that worked on precision navigation devices and other innovative components for the U.S. Defense Dept. In November 2010, he traveled to China and, upon his return to the United States later that month, federal inspectors found him to be in possession of a computer that contained hundreds of documents related to the company’s projects, as well as images of Liu making a presentation at a technology conference sponsored by the Chinese government. Many of the documents on his computer were marked as containing sensitive proprietary company information and/or export-controlled technical data which he carried into China and revealed to officials there.

Electronics Used in Military Radar & Electronic Warfare—In early 2011 Ms. Yufeing Wei was sentenced in the District of Massachusetts to 36 months in prison, while her co-defendant, Zhen Zhou Wu, was sentenced to 97 months in prison. Their company, Chitron Electronics, Inc. was fined $15.5 million. The pair and their company were convicted of conspiring for a period of more than ten years to illegally export sensitive U. S. components to China.  They included military components and sensitive electronics used in military phased array radar, electronic warfare and missile systems. Several Chinese military entities were among those receiving the exported equipment, the Justice Dept. says.

Stealth Missile Exhaust Designs and B-2 bomber Data to China –Also in early 2011 a federal judge in the District of Hawaii sentenced Noshir Gowadia, 66, of Maui to 32 years in prison for communicating classified national defense information to China. Gowadia assisted the China in developing a low-signature cruise missile exhaust system capable of rendering a Chinese cruise missile resistant to detection by U. S. infrared missiles, the Defense Dept. report to Congress says. A jury also convicted Gowadia of three counts of illegally communicating classified information to China regarding lock-on range for infrared missiles that could be used to attack U.S. B-2 bombers. Gowadia was also convicted of unlawfully exporting classified information about the B-2, this country’s most highly classified aircraft.

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