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December, 2017

US indicts three Chinese nationals for alleged cyberhacking and IP theft

Original article: United States Justice Department

The United States Justice Department has indicted three Chinese nationals for allegedly cyberhacking and stealing the intellectual property of three companies in Pittsburgh. The hackers are alleged to have pilfered intellectual property from navigations-systems maker Trimble, German technology firm Siemens and Moody's Analytics. 


The three charged in the Pittsburgh case, Wu Yingzhuo, Dong Hao and Xia Lei, are affiliated with the Guangzhou Bo Yu Information Technology Co. (called Boyusec), according to the Justice Department.  

Analysis:

If the charges are true, they may represent a violation of an agreement Chinese President Xi Jinping and then US President Barack Obama made in 2015 that prohibits state-sponsored corporate espionage. It depends on whether the suspects were working for the Chinese government. 


The Justice Department is not prosecuting the case as state-sponsored hacking. However, intelligence and cybersecurity analysts cited by CNN say that Boyusec works as a contractor for the Chinese Ministry of State Security. A recent Reuters report also cites U.S. officials as saying that the defendants had links to the Chinese state. 


The charges against all three defendants are serious. The Justice Department alleges that Wu Yingzhuo stole trade secrets from Trimble pertaining to a satellite system it was developing. Wu and his co-conspirators stole at least 275 megabytes of data "that would have assisted a Trimble competitor in developing, providing and marketing a similar product without incurring millions of dollars in research and development costs," the Justice Department says. 


Wang Yingzhuo, meanwhile, is accused of hacking into Siemens' computer network and leading the theft of 407 gigabytes of the company's proprietary commercial data. 


Led by Xia Lei, the co-conspirators also hacked into Moody's email accounts and gained access to an employee email which provided them with proprietary and confidential economic analyses, findings and opinions.


If found guilty, the defendants could face lengthy prison sentences. All three are charged with wire fraud, which carries a penalty of up to 20 years in prison, as well as conspiring to commit computer fraud and abuse, and conspiring to commit trade secret theft - each of those offenses can be punished with a maximum of 10 years in jail. 


Thus far, the Trump administration has not spoken publicly about the case, likely because Trump is holding out for help from Beijing reigning in its feckless North Korean neighbor. Accusing China of breaking its agreement to refrain from corporate espionage probably won't help Washington's case - although it's hard to think of anything that will. 

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