A Question of Counterintelligence or Law Enforcement?
By Harvey Rishikof
Introduction
Economic or industrial espionage is an old problem. As the current head of the National Counterintelligence Executive (NCIX) under the Director of National Intelligence (DNI), Joel F. Brenner, likes to muse, espionage itself is as old as Joshua reconnoitering the Promised Land, and it will be with us forever.[1] In the Cold War the archetype for technological counterintelligence, as well as industrial espionage, was the American born Russian spy Dr. George Koval’s penetration of the Manhattan Project for the atomic bomb.[2] But the paradigm is shifting in the economic era of globalization. The end of the Cold War and the explosion of technology, increased access to computers and the internet, potential profits, poor prosecutorial tools, fear of reporting the theft, and inadequate federal and state laws, have all contributed to the attractiveness of economic espionage.[3] In the words of Bernard Esambert, former Chairman of the Board of the Pasteur Institute, “Today’s economic competition is global. The conquest of markets and technologies has replaced former territorial and colonial conquests. We are living in a state of world economic war and this is not just a military metaphor... the companies are training the armies and the unemployed are the casualties.”[4]
International commerce and advancing technology have increased the likelihood of and opportunity for economic intelligence and industrial espionage, placing intellectual property and trade secrets at increased risk of appropriation. Consider the iPod, while Apple developed it, its 451 parts are made in several different countries, including Japan, Philippines, Korea, China, and Taiwan.[5] Such outsourcing although efficient and cost effective, leaves Apple open to foreign industrial espionage at critical stages of design. When viewed from the perspective of the NCIX trying to protect economic secrets in a world of shifting boundaries, world supply lines, and spheres of influence, it is a monumental challenge:
Boundaries of every kind are eroding—legally, behaviorally, electronically—in all aspects of our lives: Between the public and private behavior of ordinary people; for example, the sense of dress and decorum appropriate to the home, the street, the office, or houses of worship. Between the public and private—that is, secret—behavior of governments. Between the financing, legal norms, and research activities of public as opposed to private institutions; [and] universities, for instance. Between state and non-state actors and the relative size of the resources they control. Cyber boundaries are also eroding—and not always in ways we like—but simply because we are sometimes helpless to enforce them.[6]
But those in charge are still responsible, and they have to try to craft a response to the new era of globalization, computerization, secrets, and spying. The mission therefore is increasingly difficult and will not go away because the stakes are so high. Our recent economic downturn may only enhance the incentives to increase this type of spying. In the elegant words of Joel Brenner the “intellectual thieves” seem to have the upper hand at the moment. As he recently explained at a public-private sector conference:
The fact is, intellectual thieves are eating our lunch—eating your lunch. The public and private sectors are both leaking badly. I’m not talking about just the pirating of DVDs and movies in Asia. I’m talking about significant technologies that are walking out of our laboratories on electronic disks, walking onto airplanes bound for foreign ports, and re-entering the country as finished products developed by foreign entrepreneurs. In effect, we’re buying back our own technology. This is bad enough when we’re talking about commercial innovation. But when we’re talking about technology with substantial defense applications, we’re talking about losses of intellectual capital that in wartime could cost many lives of our fellow citizens. These losses are occurring, and they are occurring in a targeted, systematic manner.
Protecting innovative technology before it can be patented or classified is an urgent task, and it is difficult. If any of us knew how to do it, he’d be very rich, because it’s a question of handicapping basic research.[7]
Protecting critical business information is not only a bottom line issue but also may be increasingly a national security issue. Companies however, are fearful of government classification schemes that will hinder innovation and openness. Given this reality and boundary erosion, perhaps it is not surprising that a former head of the French intelligence service in 1994 admitted that his agency spied on U.S. executives abroad and “bugged” first-class seats on Air France to monitor conversations.[8] Moreover, this arena is complicated not only by the fact that the key to our information networks is openness but the information can be transmitted through standard business practices – merger and acquisitions, joint ventures, strategic alliances, and licensing agreements. Therefore, both military friends and foes may be adversaries in the economic arena of espionage. Sometimes the attack is from government-sponsored espionage, other times it is the private illicit acquisition of proprietary information, and sometimes it may be a combination of the two.
As one can imagine, it is hard to find data in this arena. As one of my old professor’s use to say – studying smuggling is hard and potentially dangerous. A measure of the extent of the growing problem is the number of prosecutions for the illegal export of US technology as reported by the 2003 Annual Report on Foreign Economic Collection and Industrial Espionage (FECIE). During fiscal year 2003, US Department of Immigration and Customs Enforcement (ICE) conducted more than 2,000 investigations involving violations of the Arms Export Control Act, International Traffic in Arms Regulations, Export Administration Regulations, International Emergency Economic Powers Act, and the Trading with the Enemy Act. Those investigations resulted in 120 arrests, 75 criminal indictments, and 55 convictions.[9]
According to a survey published in 2007 by the American Society for Industrial Security (ASIS), the financial impact of individual cases of espionage range from less than $10,000 to more than $5.5 million per incident, for a cumulative year-end total in the American economy of billions of dollars in losses – to reputation, image, goodwill, competitive advantage, core technology, and profitability.[10] But as we began to recognize in the late 1990s corporations are of strategic interest to the United States on three levels since they: 1) produce classified products for the government; 2) produce dual-use technology used in both the public and private sectors; and 3) are responsible for R&D and the creation of leading-edge technologies critical to maintaining U.S. economic security. Losses at any of these levels could affect U.S. international competitiveness and security.[11] Regardless of the source, the threat to US interests is real, and the US is extremely vulnerable.
The 2005 Annual Report to Congress on FECIE reported that 108 countries – both friend and foe – were involved in information collection efforts against the United States.[12] China, Russia, and India top the list. The FECIE reports indicate that foreign collectors tend to target dual-use technology, which can be used for both peaceful and military objectives, and military technology. There is no dispute that foreign governments go after trade secrets for the sake of national security advantage. But what is the United States government’s role in company v. company warfare? Should investigations be considered a counterintelligence or law enforcement matter? Do these old jurisdictional boundaries and responsibilities still work? What should be a secret, and what is the government’s role in making that determination? What can be done to protect US interests?
The critical issue in the new world of commerce is whether one can clarify the differences between economic and industrial counter-espionage and explain why the latter is particularly problematic. To many, governments have long engaged in economic intelligence but have found the need to engage in economic espionage declining as more and more critical information is available through open sources. Industrial espionage, on the other hand, may be becoming the most prevalent form of economic espionage as governments seek industry-related information for the intelligence they need on battlefield capabilities, for design of counter-measures, and for preparation of the battlefield – including how to attack energy grids, and industrial plants important for war-making etc. Industrial espionage involving the theft of trade secrets, perhaps at one time seemed to be able to be restricted to an industrial sphere, but dual use technologies erase what once was an easy distinction as government involvement becomes more prevalent.
Some recent cases --How to balance counterintelligence v. law enforcement?
At the time of the passage of the Economic Espionage Act in 1996 (EEA), 23 to 26 countries were identified as practicing suspicious collection and acquisition activities and 12, in particular, were targeting trade secrets. In particular the technology categories, many of which are dual-use technologies, listed in the Military Critical Technology List published by the DOD were of greatest interest.[13] The FBI had seen the number of cases of suspected economic espionage under investigation in its Economic Counterintelligence Program started in 1994 leap from 400 to 800 cases by 1996. By 2005 the number of countries involved in collection efforts against sensitive and protected US technologies had risen dramatically.
More specifically, the immediate issue is whether the government should be engaged in a back-door industrial policy by determining which industrial products deserve protection with federal dollars. Criterion might be direct relevance to national security, actually threatened industries, or a mixed strategy using a case-by-case approach. Recent cases brought under the EEA are illustrative of the range of potential problems for prosecution under the current charging schemes as the government tries to establish foreign involvement.
If the companies are selected according to their direct relevance to national security (i.e. they have defense contracts) then the contracting process becomes the tool the FBI and others use for building their database of which industries to help—regardless of whether the thief is a foreign government or a competing firm acting on its own. This is, of course, a very defensive posture but allows for a potential marshalling of resources. An example of such a national security case is United States v. Meng that involved military technology, computer source code, and economic opportunity.[14]
In 2007 Xiaodong Sheldon Meng, formerly a resident of Beijing, China, and a resident of Cupertino, California, was charged with stealing military combat and commercial simulation software and other materials from his former employer Quantum3D, a company based in San Jose, California. Meng was charged under the EEA with stealing the trade secrets from Quantum3D with the intent that they would be used to benefit the foreign governments of China, Thailand, and Malaysia.
Many of Quantum3D’s products were designed primarily for military purposes, including military combat training in simulated real-time conditions during the day and night and the use of advanced infrared (IR), Electro-Optical (EO), and Night Vision Goggle (NVG) devices. The indictment alleges that Meng stole numerous Quantum3D products, including “viXsen™” and “nVSensor™,” which were used exclusively in military applications and designed for precision training of military fighter pilots in night vision scenarios among other applications. Both “viXsen™” and “nVSensor™” are classified as defense articles on the U.S. Munitions List and cannot be exported outside the United States without an export license.
In 2003 after a number of years of employment, Meng entered into a consulting agreement with Quantum3D in which he would serve as an independent consultant for Quantum3D in Asia. In this capacity he tried to sell sensitive source code to the Malaysian Air Force. In 2004 he severed his relationship with Quantum3D, joined a competitor, and attempted to sell Quantum3D products to the Chinese and Thailand.[15] In essence Meng given his knowledge of the products became the carrier.
Another recent case highlighting the overlap of economic and industrial espionage in the national security area and they type of cases to focus on is the 2007 Chi Mak case. In the Chi Mak case, five members of a southern California family were charged with acting as agents of the People’s Republic of China and with conspiring with each other to export United States defense articles to the People’s Republic of China a violation of the Arms Export Control Act. This technology theft ring focused on acquiring corporate proprietary information and embargoed defense technology related to the propulsion, weapons and electrical systems of U.S. warships. The family, the father a naturalized citizen from China, had pursued a long-term plan of infiltration over years.
Though the object was clear, who sponsored the ring? Chi Mak was a support engineer at L-3 Communications working on navy quiet drive propulsion technology. The espionage effort appears to have been directed by a Chinese academic at a research institute for Southeast Asian affairs at Zhongshan University in Guangzhou, China. The Chi family encrypted the information it was passing back to China into a computer disk that appeared to contain television and sound broadcasts. It was literally embedded in the other data in encrypted form. This effort has all of the earmarks of professional espionage tradecraft and state-directed espionage, with sophisticated control and sophisticated clandestine communications means. The government university in Guangzhou could have been cover for a state-directed espionage effort. However, Chi Mak and his alleged co- conspirators could just as well have been part of a sophisticated economic espionage operation run out of a university research institute. The future plea agreements will perhaps make clear the true nature of the conspiracy.[16]
This “direct relevance” approach would require prioritizing military programs and “tagging” all employees with access to high value products. And as these cases illustrate the targeting countries are not beyond “planting” potential operatives as “sleepers” whose goal is to join critical companies and plot long-term career paths.
Alternatively, law enforcement could build a database of those industries actually threatened by foreign governments’ intelligence activities, whether or not the US uses the technology for national security purposes. The rationale here would be: if a foreign government wants the technology, there is national security gain to be had, by definition, in keeping that technology from them. This approach is problematic because of its underlying assumption and because many non-defense firms do not necessarily want the federal government probing their businesses to discover what their R&D involves or interfering in their choices on how to develop, protect or share such technologies.
Such a case was, United States v. Okamoto and Serizawa, when Takashi Okamoto, a resident of Japan, and Hiroaki Serizawa, a resident of Kansas, were indicted of stealing trade secrets from the Cleveland Clinic Foundation (CCF). [17] Okamoto and Serizawa conspired to misappropriate from the CCF certain genetic materials called Dioxyribonucleic Acid (DNA) and cell line reagents and constructs which were developed by researchers employed by CCF, with funding provided by the CCF and the National Institutes of Health, to study the genetic cause of and possible treatment for Alzheimer’s. Alzheimer’s affects an estimated 4,000,000 people in the United States alone and is the most common cause of dementia. The pharmaceutical market for this disease is a potentially rich profit center for any company in the field. The Alzheimer's disease market is forecast to continue to expand significantly over the next ten years. Aided by growing elderly populations, successive product launches have seen global revenues grow at over 35%.[18]
The goal of the conspiracy was to benefit the Institute of Physical and Chemical Research (RIKEN), a quasi-public corporation located in Saitama-Ken, Japan, which received over 94 percent of its operational funding from the Ministry of Science and Technology of the government of Japan. The Brain Science Institute (BSI) of RIKEN was formed in 1997 as a specific initiative of the Ministry of Science and Technology to conduct research in the area of neuroscience, including research into the genetic cause of, and possible treatment for, Alzheimer’s Disease
Okamoto and Serizawa had committed economic espionage by stealing, altering and destroying trade secrets that were property of the CCF, specifically, 10 DNA and cell line reagents developed through the efforts and research of researchers employed and funded by the CCF and by a grant from the National Institutes of Health. [19] Okamoto and Serizawa were also charged with transporting, transmitting, and transferring in interstate and foreign commerce, DNA and cell line reagents developed through the efforts of researchers employed and funded by the CCF.[20]
Should law enforcement be focused on lucrative emerging world markets, as in the above case of Okamoto and Serizawa and be using limited resources to protect private companies from losing market share? How can the federal government, given its limited resources, spread itself across such a large canvas? Will corporations want to cooperate with the government?
A third option is to develop a counter intelligence strategy that mixes the two previous approaches and determines, on a case by case basis, whether the efforts at acquisition by a foreign entity represent a national security threat. United States v. Ye and Zhong[21]presents such a choice. Fei Ye, and Ming Zhong were arrested at the San Francisco International Airport with stolen trade secret information in their luggage while attempting to board an aircraft bound for China. Ye and Zhong admitted to possessing stolen trade secrets for an integrated circuit design from Sun Microsystems, Inc. and Transmeta Corporation with the intent to benefit the Peoples Republic of China.
Ye and Zhong admitted that they intended to utilize the trade secrets in designing a computer microprocessor that was to be manufactured and marketed by a company that they had established, known as Supervision, Inc. They admitted that Supervision was to have provided a share of any profits made on sales of chips to the City of Hangzhou and the Province of Zhejiang in China, from which Supervision was to receive funding. Mr. Ye and Mr. Zhong also admitted that their company had applied for funding from the National High Technology Research and Development Program of China, commonly known as the “863 Program.”
Fei Ye is alleged to have possessed a corporate charter for Hangzhou Zhongtian Microsystems Company Ltd. at his house which states that the joint-venture will raise China’s ability to develop super-integrated circuit design and form a powerful capability to compete with worldwide leaders’ core development technology and products in the field of integrated circuit design.[22]
The problem here is that, in addition to the issues with the first two previous enforcement approaches raise, the Ye and Zhong case introduces a third: acquiring the expertise within the counter intelligence community to analyze industrial R&D at its most cutting edge. And even if the community were successful in doing this, law enforcement would have to employ a sliding authorization for use of counterintelligence tools (wiretaps, undercover surveillance, etc.) during the investigative process or risk alienating firms it might need to cooperate in an eventual prosecution. Any investigations that did not pan out as espionage would have to be prosecuted as crimes, unless companies decide to drop charges in the interest of pursuing profits instead. But could the corporations count on the federal government or IC to pull back once an interest had been pursued? For some of the proponents of the EEA in 1996, the act was an attempt to pursue this third option, but the infrastructure and groundwork has not materialized to pursue such a nuanced course.
Why these cases are of interest is that they illustrate how difficult counterintelligence is when the focus is the private sector? What were the roles of the firms in each of the cases? Did the company alert law enforcement or the other way around? How were decisions made regarding the use of counterintelligence vs. counter-crime techniques and did internal law enforcement disagreements arise that complicated or slowed down investigations? These important questions demonstrate how difficult pursuing prosecutions in this area.[23]
But if government regulations and enforcement continue to prove ineffective the private sector may be the place where an attempted solution will be looked to, in order to stop having our “lunch eaten.” The questions are: 1) are we willing to pay the price to our privacy and will it work? and, 2) what is a US economic interest and what is a multinational conglomerate interest as it pursues its globalization strategy?
These issues of economic and industrial espionage bleed into other categories of security and competition. Recently Joel Brenner characterized the key three strategic challenges now confronting the counterintelligence community: (1) threats to our cyber networks and opportunities to understand and counter them; (2) acquisition vulnerabilities created by the international nature of our markets; and (3) the need for better collaboration in countering espionage.[24]
A corporate security culture must entail a shift in the traditional notions of privacy.[25] This shift will be a challenge to the previous zone of privacy many of us grew up with. Interestingly, the new generation of “MySpace,” “FaceBook,” and YouTube” employees may approach the new transparent work place with a different appreciation for the new corporate security culture of trade secrets. The government’s responsibility historically has been to concentrate on the espionage side of the national security arena and not be so involved in the industrial, a more private sector field. The private sector paid for its own slackness in lost revenue. Modern technology has helped to erode these two distinct arenas and this has created new burdens for the government. As economic warfare become more industrial based, the distinction between economic and industrial espionage becomes less relevant.
One reason for the erosion is that our adversaries have taken such a view, as in the Chinese 863 Program in the Ye and Zhong case. The 863 Program is a funding plan created and operated by the government of the People’s Republic of China, and is also known as the National High Technology Research and Development Program of China. The program was designed by leading PRC scientists to develop and encourage the creation of technology in the PRC and focused on issues such as high technology communications and laser technology, with an emphasis on military applications. The General Armaments Department ("GAD") of the People’s Liberation Army was responsible for the Army, Navy, and Air Force in the PRC, and oversaw the development of weapons systems used by the PRC. The GAD had a regular role in, and was a major user of, the 863 Program.[26]
This approach is perhaps more understandable in political/economic cultures that encourage state-owned enterprises. In countries where government interests can coincide with corporate interests, or national champions, intelligence agencies can be more easily instructed to assist the private sector. This perhaps explains why France over ten years ago established, the Ecole de Guerre Economique (EGE) or School of Economic Warfare. The founder of the school contends that rather than teaching economic espionage it is more the management of information to develop an economic strategy in the context of conflicts to gain market share.[27] For such state corporate-centric approaches the distinction between fair or unfair business practices can become blurred. Some have contended that the US open competitive market based system and our anti-trust laws combined with our Foreign Corrupt Practices Act has made state sponsored economic espionage a non-starter.[28]
The new Director of National Intelligence has many problems on his plate – Iraq, Afghanistan, the Middle East, China, Pakistan, India etc. How will economic-industrial espionage fair? In Andrew Niccol's 1997 science fiction film Gattaca, set in the near future, the Gattaca Aerospace Corporation has created a totally transparent work place with technology able to manipulate genetic codes and monitor all employee interactions. Although the hero is able to fool the system, the world depicted is a possible modern future that would bring corporate monitoring to one possible logical conclusion. If we do start to travel down this path of a culture of corporate security, future generations will have to judge if the price paid for corporate and national security, so that we stopped having our lunch eaten, was in the end worth the meal.
Harvey Rishikof is Former Chair, Department of National Security Strategy and Professor of Law and National Security Studies with National War College.
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[2] See, William J. Broad, A Spy’s Path: Iowa to A-Bomb to Kremlin Honor, New York Times, November 12, 2007 A1.
[3]See Chris Carr, Jack Morton, and Jerry Furniss, “The Economic Espionage Act: Bear Trap or Mousetrap?”, Vol. 8.2 Texas Intellectual Property Law Journal (2000) p. 159, 163-170.
[4] Wanja Eric Naef, Economic and Industrial Espionage: A Threat to Corporate America?; Infocon Magazine Issue One, October 2003 at http://www.iwar.org.uk/infocon/print/espionage-cid.htm.
[5] Hal R. Varian. June 28, 2007. “An iPod Has Global Value. Ask The (Many) Countries That Make It,” http://www.nytimes.com/2007/06/28/business/worldbusiness/28scene.html
[6] See “Welcoming Comments by National Counterintelligence Executive Dr. Joel F. Brenner DNI –Private Sector Workshop on Emerging Technologies,” Carnegie Endowment for International Peace, Washington, DC, 7 December 2006 http://www.ncix.gov/publications/speeches/CarnegieSpeech20061207.pdf
[7] Ibid.
[8] Chris Carr, Jack Morton, and Jerry Furniss, “The Economic Espionage Act: Bear Trap or Mousetrap?”, Vol. 8.2 Texas Intellectual Property Law Journal (2000) p. 159, 161.
[9] See p. 3 Report 2003 at http://www.ncix.gov/publications/reports/fecie_all/fecie_2003/fecie_2003.pdf.
[10] ASIS. Trends In Proprietary Information Loss; Survey Report, 3. August 2007. http://www.asisonline.org/newsroom/surveys/spi2.pdf. The 2001 FECIE report stated that an estimated $100-250 billion was lost in sales at the end of calendar year 2000.
[11] See Statement by FBI Director Louis J. Freeh, Hearing on Economic Espionage before the House Judiciary Subcommittee on Crime, May 9, 1996, at http://www.fas.org/irp/congress/1996_hr/h960509f.htm.
[12] 2005 FECIE Report, 1.
[13] The categories for 1997/1997were: Advanced material coatings; Advanced transportation and engine technology; Aeronautics systems; Armaments and energetic materials; Biotechnology; Chemical and biological systems; Directed and kinetic energy systems; Electronics; Ground systems; Guidance, navigation, and vehicle control; Information systems; Information warfare; Manufacturing and fabrication; Marine systems; Materials; Nuclear systems; Power systems; Semiconductors; Sensors and lasers; Signature control; Space systems; Weapons effects and countermeasures.
[14]The allegations, facts, and plea agreement for this section are drawn directly from the Department of Justice’s web sites at http://www.usdoj.gov/usao/can/press/2006/2006_12_14_meng.indictment.press.html
[15] The Indictment charged Meng under a number of statutes with the following maximum penalties: Conspiracy, in violation of 18 U.S.C. § 371, (five years in prison, a fine of $250,000 or twice the value of the property involved in the transaction, whichever is greater, a three year term of supervised release); Economic Espionage and Attempted Economic Espionage, in violation of 18 U.S.C. §§ 1831(a)(3), 1831(a)(4), (fifteen years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater; a three year term of supervised release; Arm Export Control Act, in violation of 22 U.S.C. § 2778, (ten years in prison, a fine of $1,000,000 or twice the value of the property involved in the transaction, whichever is greater; a three year term of supervised release); Misappropriation of Trade Secrets and Attempted Misappropriation of Trade Secret, in violation of 18 U.S.C. §§ 1832(a)(1), 1832(a)(4), (ten years in prison, a fine of $250,000 or twice the value of the property involved in the transaction, whichever is greater, a three year term of supervised release); Interstate and Foreign Transportation of Stolen Property count, in violation of 18 U.S.C. §§ 2314, (ten years in prison, a fine of $250,000 or twice the value of the property involved in the transaction, whichever is greater, a three year term of supervised release); False Statement to Government Agency, in violation of 18 U.S.C. § 1001, (five years in prison, a fine of $250,000 or twice the value of the property involved in the transaction, whichever is greater, a three year term of supervised release). However, the court could impose any sentence following conviction after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
[16] Case description quoted from the Testimony of Larry M. Wortzel, Before the Subcommittee on Crime, Terrorism, and Homeland Security of the House Committee on the Judiciary Hearing on “Enforcement of Federal Espionage Laws” January 29, 2008, http://www.fas.org/irp/congress/2008_hr/012908wortzel.pdf
[17] The allegations, facts, and plea agreement for this section are drawn from the Department of Justice’s web sites at http://www.usdoj.gov/criminal/cybercrime/Okamoto_SerizawaIndict.htm and http://www.usdoj.gov/criminal/cybercrime/serizawaPlea.htm.
[18] See Alzheimer’s at http://www.piribo.com/publications/diseases_conditions/alzheimers/pipeline_commercial_insight_alzheimers_disease.html
[19] The Indictment is still pending against Okamoto, which charges him with Conspiracy, Economic Espionage Act offenses, and the Transporting of Stolen Property in Interstate and Foreign Commerce.
[20] Thus far Hiroaki Serizawa has pleaded guilty to making false statements to the government. In the plea Serizawa admits he: falsely understated the number of vials of research material which Okamoto had taken from Serizawa’s laboratory (hundreds of vials); initially denied any recent personal contact with Okamoto when in fact Serizawa had been in recent telephone, electronic mail and personal contact with Okamoto; and initially denied any knowledge of Okamoto having accepted a research position with RIKEN when in fact Serizawa knew that Okamoto had accepted a research position at RIKEN. The false statements offense carries a maximum penalty of five years incarceration and a $250,000 fine. Under the law, conspiracy carries a maximum penalty of five years incarceration and a $250,000 fine, while economic espionage carries a maximum penalty of 15 years incarceration and a $500,000 fine, while interstate transportation of stolen property carries a maximum penalty of 10 years incarceration and a $250,000 fine.
[21] The allegations, facts, and plea agreement for this section are drawn directly from the Department of Justice’s web sites at http://www.usdoj.gov/criminal/cybercrime/yeIndict.htm and http://www.usdoj.gov/usao/can/press/2006/2006_12_14_ye.zhong.plea.press.html
[22] Ye and Zhong were charged with a total of ten counts, including: one count of conspiracy, in violation of 18 U.S.C. §§ 371, 1831(a)(5) and 1832(a)(5); two counts of economic espionage, in violation of 18 U.S.C. § 1831(a)(3); five counts of possession of stolen trade secrets, in violation of 18 U.S.C. § 1832(a)(3); and two counts of foreign transportation of stolen property, in violation of 18 U.S.C. § 2314.
[23] In particularly would like to thank the editors, Jennifer Sims and Burton Gerber, for their assistance in framing the article and many helpful suggestions.
[24] Remarks by Joel F. Brenner, National Counterintelligence Executive, “Strategic Counterintelligence: Protecting America in the 21st Century,” The Nro/National Military Intelligence Association Counterintelligence Symposium, Washington DC, 24 October 2007 at http://www.ncix.gov/publications/speeches/NRO-NMIA-CI-Symposium-24-Oct-07.pdf.
[25]
[26] See, Two Bay Area Men Indicted On Charges Of Economic Espionage http://www.intellectualpropertylawfirms.com/national-content.cfm/Article/107306/Two-Bay-Area-Men-Indicted-On-Charges.html.
[27] See, Kelly Uphoff, Tilting the Playing Field: Economic Espionage Hasn't Gone Away Since 9/11Costs to the U.S. Economy Could Be in the Hundreds of Billions of Dollars, at http://www.jinsa.org/articles/view.html?documentid=2835.
[28] Though in 2000 a small controversy erupted when James Woolsey, former DCI, program maintained that the US did not collect or even sort out secret intelligence for the benefit of specific American companies in response to European reports concerning alleged US/British spying on Europe under the Echelon program for industrial espionage purposes. See Woolsey, R. James. "Why We Spy on Our Allies." Wall Street Journal, 17 Mar. 2000.
