Chinese High-Tech Spy Case Inches Closer to Trial

Software engineer Hanjuan Jin is accused of stealing thousands of confidential documents from Motorola.

Did software engineer Hanjuan Jin, who worked at Motorola for about eight years, steal thousands of confidential and proprietary technical documents to share with competitor Lemko and the People's Republic of China?

Jin, in her late 30s, says she didn't. But U.S. federal prosecutors are going after her for allegedly sharing technical and highly-sensitive trade secrets to benefit a "foreign government, namely the People's Republic of China, specifically its military," according to the Dec. 9, 2008, indictment filed by federal prosecutors in Chicago.

While the U.S. government's legal paperwork seeks to shield identity by referring to the victim firm as simply "Company A," it's a safe bet that it's Motorola, which has its own civil lawsuit pending against Jin and cellular-equipment maker Lemko with many identical details—though it doesn't accuse her of sharing secrets with the Chinese government.

The shroud of secrecy will officially drop once a public trial begins; federal prosecutors and Jin's attorneys are due to meet in a Chicago court next week with the expectation of setting a trial date.

The insider threat

Jin was arrested by U.S. Customs officials on Feb. 28, 2007, at Chicago O'Hare International Airport, ready to depart on a one-way ticket to China. She was carrying over 1,000 electronic and paper documents from her former employer—she had just quit Motorola—as well as Chinese documents for military telecommunications technology, according to the Federal Bureau of Investigation (FBI) affidavit filed in court as part of the case.

That's the heart of the feds' criminal lawsuit against Jin, a U.S. citizen born in China, who was released on US$50,000 bail.

But the complex, dizzying saga doesn't end there. The case also involves claims that about a half-dozen Chinese engineers downloaded proprietary documents from both Motorola and Lemko, along with source code, as they made employment leaps between the two competitors, both located in Schaumburg, Ill.

In a separate civil lawsuit filed last September by Motorola against Jin and Lemko, and in subsequent court filings, Motorola also made computer fraud and trade-theft accusations against engineers Shaowei Pan, Xiaohua Wu, Xefend Bai and Xiohong Sheng, who are said to be Chinese nationals with experience working at both Motorola and Lemko.

If that weren't enough, Lemko filed a counter-suit last October and accused Motorola of breaching an agreement between the two companies by not telling Lemko that Motorola found source code belonging to Lemko on the computer used by Sheng. Sheng is described as a former project lead engineer at Lemko who abruptly resigned on Nov. 30, 2006, and began working at Motorola shortly thereafter. Motorola terminated Sheng in July of last year.

The Motorola civil lawsuit against Jin, Lemko and the Chinese engineers who worked for both companies at various points doesn't include the accusation about sharing trade secrets with the Chinese government. But that's the target the feds are going after, and a Chicago judge recently decided, much to Motorola's dismay, that the federal criminal case should proceed before the Motorola civil lawsuit.

Motorola says it can't comment on pending litigation, and Jin's attorney and Lemko didn't immediately return requests for comments.

Security breakdown

Documents filed with the U.S. District Court for the Northern District of Illinois, by federal prosecutors, Motorola and Lemko, paint a startling picture of the enormous influence these engineers apparently had and Jin's alleged ability to take what she wanted. This was all in spite of Motorola's signed agreements promising to protect trade secrets, security guards and a "secure network" that couldn't stop her.

Motorola's own lawsuit acknowledges it found out that Jin, unknown to Motorola at the time, went to work for Lemko during a period she was ostensibly on medical leave from Motorola.

Motorola, in a court document filed last month, claims Jin "installed Motorola's proprietary secure virtual network ('VPN') access software on a Lemko-owned computer, accessed Motorola's protected computers through Motorola's secure VPN from a Lemko-owned computer and accessed Lemko's webmail system from Motorola computers," while also getting "unauthorized access to Motorola source code and other valuable Motorola proprietary trade secrets and confidential information."

Meanwhile, the FBI affidavit from last May and the Dec. 9th federal indictment charge Jin's purpose may have been more sinister than just playing employers against each other.

FBI agent Michael Dickmann's affidavit says when Jin's carry-on was searched at the Chicago airport, $30,000 was found -- a violation of her declaration she was only carrying $10,000. A further inspection of Jin's luggage and laptop revealed several technical documents from "Company A" on media that included a thumb drive, four external hard drives, 29 recordable compact disks and one videotape.

It was later learned that Jin was in possession of 1,300 source-code files belonging to "Company A." There was also a European company's product catalog of military technology written in English and a technical manual in Chinese.

The federal indictment and FBI affidavit describe her interaction with an individual in "Company B" (identified as the chief technology officer there and a former employee of Company A) who introduced Jin to an individual who works for a company in China.

This individual (from "Company C") gave her a military technology catalog to look over, but Jin said she didn't think the individual worked for the Chinese government or military.

She later said she met this individual three times between November 2005 and February 2007 in Beijing, China, where Jin was provided with Chinese hard-copy documents referencing the Chinese military telecommunications system, with one document entitled, "Data Packet Format Protocol of Artillery's Quick Counter Short Messaging Application System."

According to the FBI report, Jin allegedly said she was asked to review the documents "in order to determine the amount of assistance Jin would be able to provide on the project." According to Jin, she wasn't offered money for this assistance nor instructions on how she should handle these documents despite the fact some of them were marked as classified Chinese documents.

According to the FBI affidavit, Jin agreed to help in the belief she might be able to get a job at "Company C." She was going to meet with this individual in China when she was stopped at the Chicago airport on Feb. 28, 2007.

Later, Jin consented to a search of her residence, the affidavit states, and FBI agents found "multiple binders of documents marked as containing confidential and proprietary information belonging to Company A." These technical documents were taken from Jin, along with a laptop that Company A had issued to her.

According to the FBI affidavit, the Company A representatives, upon reviewing the documents, said if six of the proprietary documents became public, "Company A could lose substantial global revenues over the next three years, and that research and development costs for the proprietary information in Jin's possession exceeded $600 million."

Editor's note: Reprinted from Network World.

This story, "Chinese High-Tech Spy Case Inches Closer to Trial" was originally published by Network World.

Copyright © 2009 IDG Communications, Inc.

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