U.S. Charges Chinese Academics with 'Economic Espionage'

Six Chinese nationals, including three university professors, were charged with economic espionage in a U.S. indictment unsealed Tuesday alleging the theft of technology used in mobile phones for Beijing's benefit.

According to a 32-count indictment, the six led a long-running effort to obtain U.S. trade secrets for universities and companies controlled by the Chinese government. 

Among those charged were Tianjin University professor Hao Zhang, who was arrested upon entry into the United States on Saturday, the U.S. Justice Department said in a statement.

Five others named in the indictment were believed to be in China, according to a Justice Department official who noted that this is the 11th case brought for economic espionage under a 1996 law.

All could face lengthy prison sentences if convicted. The charges they face include economic espionage, theft of trade secrets and various conspiracy counts. Each carries penalties that could include 10-15 years in prison plus fines.

The scheme led to the theft of so-called FBAR technology, which enables mobile phones and other devices to filter radio signals and improve performance, according to the Justice Department.

"As today’s case demonstrates, sensitive technology developed by U.S. companies in Silicon Valley and throughout California continues to be vulnerable to coordinated and complex efforts sponsored by foreign governments to steal that technology," said federal prosecutor Melinda Haag.

FBI San Francisco agent in charge David Johnson said the scheme was "a methodical and relentless effort by foreign interests to obtain and exploit sensitive and valuable U.S. technology through the use of individuals operating within the United States.”

- Using stolen secrets - 

In a scheme that allegedly dates back to 2006, the six are accused of working to steal trade secrets from California-based Avago Technologies and Massachusetts-based Skyworks Solutions.

A shell company called Novana was created in the Cayman Islands but led by the Chinese academics and Tianjin University, with Chinese government support, to manufacture rival technology products, according to U.S. investigators.

The Chinese company, called ROFS Microsystems, used technology stolen from the U.S. firms, according to U.S. officials.

"According to the charges in the indictment, the defendants leveraged their access to and knowledge of sensitive U.S. technologies to illegally obtain and share U.S. trade secrets with (the Chinese government) for economic advantage," said Assistant Attorney General for National Security John Carlin.

"Economic espionage imposes great costs on American businesses, weakens the global marketplace and ultimately harms U.S. interests worldwide."

Hao Zhang, 36, is a former Skyworks employee and a full professor at Tianjin University. 

The others charged included Wei Pang, 35, a former Avago employee who is also a full professor at Tianjin University; Jinping Chen, 41, a professor at Tianjin University and a member of the board of ROFS; Huisui Zhang, 34, a Chinese national who studied with Pang and Zhang at the University of Southern California; Chong Zhou, 26, a Tianjin University graduate student; and Zhao Gang, 39, general manager of ROFS Microsystems. 

Pang and Zhang met at USC during their doctoral studies in electrical engineering, where they conducted research on the technology under funding from the US Defense Advanced Research Projects Agency (DARPA). 

After earning their doctorates, Pang joined Avago and Zhang took a job at Skyworks.

ROFS was established as a joint venture between the Chinese university's investment arm and several individuals, including some of the defendants, according to the indictment.

Investigators said the scheme focused on thin-film bulk acoustic resonator (FBAR) technology, which is an important component of mobile communications and which was kept under close guard by the two U.S. companies.

The Chinese defendants schemed to steal the technology and filed for patents in the U.S. and China, presenting themselves as the inventors as they sought funding for the effort, according to the indictment.

They aimed to sell the FBAR components to mobile phone makers including Nokia, Samsung, Motorola and LG, noting that the market for the products was worth an estimated $1 billion in 2006.

Zhang, arrested at Los Angeles International Airport, appeared before a U.S. magistrate on Monday who ordered him held and transported to San Jose to face the charges.