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Once-hyped Chinese `spy' case goes to the jury

Allegations of a major espionage ring have morphed into an export-law prosecution.

May 08, 2007|H.G. Reza | Times Staff Writer

The counterespionage operation was authorized by the top-secret Foreign Intelligence Surveillance Act court. FBI agents snapped photos of one suspected spy with cameras they had hidden in his house and mounted on light poles across the street and in his company's parking lot.

In fall 2005, authorities dismantled what they said was a family spy ring that had been sending U.S. military secrets to China for two decades. Two alleged spies were arrested at Los Angeles International Airport before they could board a midnight flight to Guangzhou with encrypted information about U.S. warships.

The arrests were followed by media reports fueled by government leaks that billed the investigation as a major espionage case.

But what began as a spy thriller has morphed into a mundane prosecution of violations of federal export control laws.

At the center of the spy ring, said the FBI, was Chi Mak, a naturalized U.S. citizen and electrical engineer at Anaheim-based Power Paragon Inc., a firm that works mostly on Navy contracts. The FBI monitored him for about 18 months with cameras, wiretaps and microphones hidden in his car and work cubicle.

Mak is charged with conspiracy to violate export laws, exporting or attempting to export military information, acting as an agent of the Chinese government and lying to the FBI. He is the first defendant to be tried. After six weeks of testimony in U.S. District Court in Santa Ana, the case was sent to the jury Monday.

Mak's wife, his brother and sister-in-law and their son are still facing charges.

Mak was arrested with great fanfare Oct. 28, 2005.

In early press accounts, anonymous security and intelligence officials said the damage allegedly inflicted to national security by Mak and his relatives could equal the harm done by John A. Walker Jr. and his family of spies, who supplied Navy communication codes to the Soviet Union for 17 years until they were stopped in 1985.

Some counterintelligence officials privately suggested that his access to classified programs could severely compromise the Navy's strategic advantages.

However, when a federal grand jury indicted Mak and two co-defendants in November 2005, they were not charged with spying but only with failing to register as agents of the Chinese government.

It was a bewildering turnaround in a case officials had said would shine a spotlight on two decades of Chinese spying.

Subsequent indictments were later issued against two more family members, and the other charges were added.

Although no one was charged with espionage, during closing statements Monday, Assistant U.S. Atty. Craig Missakian insisted Mak was a spy.

Mak was accused of taking information that was not classified but which prosecutors said was sensitive nevertheless and embargoed to China. Defense witnesses testified that some of the materials could be purchased from the website of the American Society of Naval Engineers until the government put a stop to it, months after Mak's arrest.

Prosecutors said Mak had copied classified documents kept in Power Paragon's safe and which he kept illegally in his office cubicle. During the trial, prosecutors did not produce any witness who said Mak gave information to the Chinese.

But prosecutors said Mak had confessed to providing documents to the Chinese government when federal agents interrogated him. Unlike other interviews with the defendants, this one was not taped. Mak denied he confessed.

The government's case is built around three computer disks containing military-related information. Prosecutors said Mak violated federal law by trying to export the disks to China despite receiving training on export control laws.

Two disks contained reports written by Mak and two other Power Paragon engineers, which Mak delivered at engineering symposiums in the United States. Defense attorneys said Chinese engineers attended the conferences. The disks contained information about an electric-powered propulsion system for warships and a solid-state power switch for ships. The third disk contained a PowerPoint presentation on the future of power electronics.

Power Paragon officials testified that Mak and the other engineers did not receive permission from the company to present the reports.

The information on the disks that related to warships had been discussed in symposiums open to foreigners, defense attorney Ronald O. Kaye said. For this reason, Mak said, he believed the data was in the public domain and legal to give to three friends in China. One of them was Pu Pei Liang, who prosectors said was Mak's Chinese "handler." Mak said Pu was taking care of his sister-in-law's aging mother.

Mak presented one of the documents he is accused of trying to export to China at a 2004 symposium in the U.S. The report was also presented at a conference in Scotland the year before by co-author Yuri Khersonsky, a Power Paragon engineer who was a company vice president at the time.

The other document is about a solid-state power switch for ships presented at a symposium months before his arrest. Two officials from L-3 Communications, Power Paragon's parent company, testified that the document did not contain sensitive information and releasing it to China did not pose a threat to national security.

Mak's trial has been followed closely by civilian export control experts, and many believe that the information he is accused of trying to export to China was in the public domain.

Clif Burns, a Washington attorney and expert on export control laws, has been following the case and discussing it on his blog. "I don't think the government fully knows what it's doing, other than trying to put this guy in jail," Burns said. "They're saying public-domain information can't be shipped to countries subject to arms embargo. That's outlandish."

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