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Accused Double Agent to Be Freed on Bond

Judge orders release of Chinese American businesswoman Leung, who faces U.S. charges involving confidential FBI documents.

June 20, 2003|David Rosenzweig | Times Staff Writer

A federal judge in Los Angeles ordered accused Chinese double agent Katrina Leung released on $2-million bond Thursday, with conditions limiting her travel and requiring her to wear an electronic monitoring device.

Leung, who is charged with illegally obtaining, copying and possessing classified FBI documents, will remain in custody for about two more weeks while the deeds to family-owned properties are transferred to the court to secure her bond, her lawyers said.

"We're very gratified about the ruling," said defense co-counsel Janet I. Levine. "She will be home with her family and able to assist us in fighting her case. She's going to stay home. She's not going anywhere."

Leung, 49, a wealthy businesswoman from San Marino, has been held without bail since her arrest April 9 along with retired FBI counterintelligence agent James J. Smith, 59, of Westlake Village. Smith recruited her as a paid informant and supervised her activities for nearly 20 years. The two were also lovers.

Smith was charged with criminal gross negligence in allowing Leung access to classified documents and with fraud for allegedly covering up information that raised doubts about her credibility.

The government contends that Leung was feeding information about FBI counterintelligence operations to the Chinese Ministry of State Security. She has admitted receiving $100,000 from the Beijing government for her services.

Leung's defense maintains that she acted under instructions from her FBI handlers to enhance her credibility with high-level Chinese officials.

In reaching her decision to grant Leung bail, U.S. District Judge Florence-Marie Cooper said she gave considerable weight to Leung's having been aware of the allegations against her for at least four months before she was arrested and making no attempt to flee.

During that time, Cooper noted, Leung submitted to several days of grueling FBI interrogation and two searches of her home, which turned up the classified documents she is accused of illegally obtaining.

Cooper also cited a written declaration from USC professor Stanley Rosen, an expert on China's treatment of political prisoners, that the Chinese government would probably turn Leung away if she sought sanctuary at one of its embassies. If she managed to enter China on her own, according to Rosen, she would probably be tried, imprisoned and possibly sentenced to death for having spied for the FBI. Leung is a naturalized U.S. citizen.

Opposing her release, Assistant U.S. Atty. Michael Emmick argued that Leung's risk of flight was "so great that even a $2-million secured bond would be insufficient." He expressed concern that Leung and her husband were liquidating their assets, making flight risk more likely. But defense attorney John Vandevelde assured the judge that the proceeds were being deposited into his firm's trust account to pay her legal fees.

Vandevelde said the Leungs had transferred all of their overseas assets -- about $300,000 held in Hong Kong banks -- to the United States and were selling their $1.8-million home in San Marino and two other properties to meet expected legal costs.

In addition to the spy charges, Leung and her husband, Kam Leung, a biochemist, are under investigation for allegedly cheating on their income tax returns.

Emmick also cited a letter that Leung had written to a high-level Chinese government official in 1998 in which she said she would "never let my motherland down." Levine countered that the letter had been written at the direction of the FBI. She called the prosecution "disingenuous" for raising the issue.

The defense had sought Leung's release on $1-million bond, but Cooper doubled the figure to increase the likelihood of her appearing for trial. In allowing bail, Cooper bucked, not only the prosecution, but the recommendation of the court's pretrial services agency and an earlier ruling by a federal magistrate.

Under terms of her release, Leung will be restricted to her home, her lawyers' offices in downtown Los Angeles and an unidentified location where defense attorneys are allowed to review classified government documents in the case.

The electronic monitoring device she must wear will be equipped with global positioning system software, enabling court officials to know her whereabouts at every moment.

No date has been set for her trial. She is not directly charged with espionage, but rather with two lesser counts of illegally copying and three counts of illegally possessing confidential FBI documents that could be used to injure the United States or help a foreign nation.

The defense has attacked the possession charges, arguing that they fail to allege that Leung had reason to believe the documents could be used to harm U.S. interests.

One document is a transcript and summaries of a series of conversations that Leung allegedly had with her handler at the Chinese Ministry of State Security in late 1990 and early 1991.

Another relates to an FBI investigation, code named Royal Tourist, of a former TRW nuclear physicist, Peter Lee, who subsequently pleaded guilty to passing classified information to Chinese scientists. He received a suspended five-year sentence after the government concluded that he had been a pawn in a Chinese spying operation.

The third document contains a list of fugitives being sought by Chinese authorities.

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