Economic Espionage

SAN JOSE -- Two engineers about to go on trial on charges of stealing confidential computer chip designs from their Silicon Valley employer and a partner firm were indicted Wednesday on the rare and more serious charge of economic espionage, prosecutors said. The indictment returned by a grand jury in U.S.

WASHINGTON - Driven in part by the global financial crisis, foreign intelligence services, corporations and computer hackers have stepped up efforts to steal technology and trade secrets from American companies, the FBI's top spy hunter told Congress on Thursday. A related threat - illegal sales of U.S. technology - was highlighted when a major military contractor, United Technologies Corp., and two subsidiary units agreed in federal court to pay a $75-million fine for illegally selling embargoed software and components to China that the country used to build a sophisticated attack helicopter called the Z-10.

During his stint as a U.S. Commerce Department trade negotiator during the mid-1980s, Clyde Prestowitz wondered why the Japanese side seemed to know about the divisions within the American team over semiconductor talks and about the contents of his briefing book. Prestowitz never learned how Japanese officials acquired their knowledge. But he and other U.S. officials assumed they were being bugged and took care to make important calls only over secure lines in the U.S. Embassy in Tokyo.

Congress gave final approval to one of the most sweeping ethics overhauls in years, clamping down on insider trading by lawmakers and administration officials in an election year push to improve the public's low opinion of Washington. The Senate passed the legislation overwhelmingly Thursday, 96 to 3, sending it to President Obama, who had called for such a measure during his State of the Union address. Few lawmakers want to stand in the way of ethics reforms at the moment, and the bill was received with gusto in Congress - even though one of its most compelling provisions was stripped by Republicans in the House.

The emerging nation, cash-rich but technologically poor, is shopping for a national telecommunications system and an American company is in the thick of the bidding. Not only is the contract worth several billion dollars, but the winner will have a leg up on future work for that country--and for its equally affluent neighbors. But the U.S. firm is narrowly underbid by an overseas rival. Another case of American business failing the test of international competitiveness? Not this time.

A computer programmer accused of stealing software from Goldman Sachs Group Inc. faces up to 15 years in prison after being convicted on two federal criminal counts. A U.S. District Court jury in Manhattan found Sergei Aleynikov, 40, guilty Friday on one count of economic espionage and one count of transporting stolen goods across state lines. He is set to be sentenced in March. Aleynikov, who worked on Goldman's high-frequency-trading desk, was arrested a month after he quit the investment bank last year to work for a Chicago start-up, Teza Technologies, which was trying to build its own trading operation.

Senate OKs Stronger Penalties for Economic Espionage: Stealing trade secrets would become a federal felony under an economic espionage bill passed by the Senate and sent to President Clinton for his signature. Approved by voice vote, the bill would subject people convicted of stealing business secrets for a foreign government, company or agent to up to 25 years in prison and up to a $250,000 fine. The maximum fine for organizations convicted of such thefts would be $10 million.

FBI Director Louis J. Freeh asked Congress on Wednesday to give the bureau greater legal authority to counter rampant and fast-growing economic espionage against the United States by both friendly nations and traditional adversaries. Freeh said the FBI is now investigating 800 cases of economic espionage against the United States, double the number of just two years ago. He warned that the intelligence services of at least 23 nations now make U.S.

WASHINGTON - Driven in part by the global financial crisis, foreign intelligence services, corporations and computer hackers have stepped up efforts to steal technology and trade secrets from American companies, the FBI's top spy hunter told Congress on Thursday. A related threat - illegal sales of U.S. technology - was highlighted when a major military contractor, United Technologies Corp., and two subsidiary units agreed in federal court to pay a $75-million fine for illegally selling embargoed software and components to China that the country used to build a sophisticated attack helicopter called the Z-10.

The governments of France and Israel are extensively involved in economic espionage against the United States, the Central Intelligence Agency has claimed for the first time in a public report. By contrast, Japan, sometimes accused by lawmakers of being among the most aggressive in trying to steal U.S. corporate secrets, takes part in "mostly legal" information gathering, the CIA concluded.

A computer programmer accused of stealing software from Goldman Sachs Group Inc. faces up to 15 years in prison after being convicted on two federal criminal counts. A U.S. District Court jury in Manhattan found Sergei Aleynikov, 40, guilty Friday on one count of economic espionage and one count of transporting stolen goods across state lines. He is set to be sentenced in March. Aleynikov, who worked on Goldman's high-frequency-trading desk, was arrested a month after he quit the investment bank last year to work for a Chicago start-up, Teza Technologies, which was trying to build its own trading operation.

A Chinese-born engineer living in Orange County was convicted Thursday in the first-ever trial under the Economic Espionage Act. Dongfan "Greg" Chung, 73, of Orange, a former aerospace engineer at the Boeing plant in Huntington Beach, was found guilty of acting as a foreign agent, conspiring to violate the Economic Espionage Act and seven other charges. He was found not guilty of obstruction of justice. The ruling came after a 10-day trial and roughly three weeks of deliberation by U.S.

A Chinese-born engineer stole trade secrets critical to the U.S. space program and passed them to China for three decades without detection, a federal prosecutor in Santa Ana said Tuesday during opening statements. The non-jury proceeding against former Boeing Co. engineer Dongfan "Greg" Chung represents the first time an economic espionage case has reached trial in the United States. Six similar cases have settled before trial since the Economic Espionage Act passed in 1996.

SAN JOSE -- Two engineers about to go on trial on charges of stealing confidential computer chip designs from their Silicon Valley employer and a partner firm were indicted Wednesday on the rare and more serious charge of economic espionage, prosecutors said. The indictment returned by a grand jury in U.S.

A 19-year-old Los Angeles man pleaded guilty Monday to stealing and posting on the Internet sensitive information that might have allowed customers to pirate broadcasts from DirecTV, the nation's largest satellite-TV provider. The case against Igor Serebryany is one of the few criminal prosecutions -- the first in Los Angeles -- under the U.S. Economic Espionage Act of 1996. Federal prosecutors have invoked the law in only about 30 cases, said Assistant U.S. Atty. James Spertus.

A GOP congressman who said in 1997 that he had "evidence" former Democratic fund-raiser John Huang had passed classified information to an Indonesian company never received such reports, according to FBI documents made public Thursday. Notes taken by FBI agents who investigated the case show that former Rep. Gerald B.H. Solomon (R-N.Y.

It was portrayed as a minor incident, a mere embarrassment to the intelligence community: Five Americans--four of them CIA officers--were accused by France in February of conducting an economic espionage operation against the government in Paris. The French--U.S. allies, after all--expressed outrage. The U.S. ambassador to Paris, Pamela Harriman, summoned by the French to receive an official protest, privately fumed as well. The affair briefly made headlines, then faded. But now, U.S.

Despite passage of the 1996 Economic Espionage Act, the FBI says foreign spies have stepped up their attacks on U.S.-based companies, and a new national survey estimates that intellectual property losses from foreign and domestic espionage may have exceeded $300 billion in 1997 alone. Governments of at least 23 countries, ranging from Germany to China, are targeting U.S. firms, according to the FBI. Urging U.S.

The United States has recalled three CIA agents at Germany's insistence in a fresh sign of tension between the two allies over the scale and purpose of U.S. intelligence-gathering in Germany. The repatriation of the three Americans, described as a married couple and their supervisor working under cover out of the U.S. Consulate in Munich, came after they were accused of using false pretenses to recruit German citizens for unspecified economic espionage, German officials said.

Despite passage of the 1996 Economic Espionage Act, the FBI says foreign spies have stepped up their attacks on U.S.-based companies, and a new national survey estimates that intellectual property losses from foreign and domestic espionage may have exceeded $300 billion in 1997 alone. Governments of at least 23 countries, ranging from Germany to China, are targeting U.S. firms, according to the FBI. Urging U.S.