Industrial Espionage Case

A number of people have called my attention to a case of alleged industrial espionage by Chinese nationals working in the U.S. These are former foreign students at USC, and are thus likely current or former H-1Bs.

As I’ve mentioned before, the tech industry has stated that foreign students are the best of the foreign workers, and the industry has supported legislation to grant fast-track green cards to them. If the allegations here are true, though, in this case the foreign workers are takers, rather than contributors.

It is interesting to see the USC connection, since that university has often ranked Number 1 in the nation for total number of foreign students, including large numbers from China.

Those contacting me seem to believe that this recent case will galvanize members of Congress to change their pro-H-1B views. But that’s not going to happen. There have been about two dozen cases in the last few years of alleged theft of industrial secrets by immigrant Chinese engineers and scientists, including several convictions, without any mention by Congress in connection to H-1B that I can recall. In fact, I can’t recall industry leaders mentioning it either. The latter may simple consider it the cost of doing business, with the H-1B program being a net gain for them overall. And people in Congress might think, “If the industry doesn’t care, why should we care?”

Such incidents do call into question the attitude among many in the U.S. government that a benefit of the H-1B program is that “We get to steal China’s engineers.” I’ve said that this attitude is silly to begin with, but it appears that in these cases, some institutions in China are stealing back.

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10 thoughts on “Industrial Espionage Case

  1. This happens at UC Davis as well. I knew a PhD in an engineering department that said a visiting Chinese “professor” had blatantly falsified all the “research” that was done during his stay. He was probably spending his time browsing the intranet and sending documents back to China.

    When I was a student around 2001 I worked in the plant genomics building. I would often go in late (around midnight) on weekends to finish up work and the only other person there was always this one Chinese professor who could be seen carrying around 3 foot tall stacks of paper (literally) and scanning them throughout the night. I always wondered what he was up to, especially since he was literally on the phone speaking Chinese every time I saw him, even while carrying those stacks of paper.

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  2. Um, hot news of a crime that allegedly occurred ten years ago? There must be a lot more to this story than in that first link. And the material was proprietary, not patented? Hmm. Of course as a patent it would already be public.

    Y’know, back when I was a tad of a lad everyone made a BIG DEAL out of making sure the copyrights were clearly spelled out on every little computer program anyone wrote, but I guess it was both a change to the copyright laws to make the copyright implicit, and that the program I’ve worked with recently were unlikely to benefit any third parties, but I haven’t been bothered about that in ten years or more.

    Indeed, if the companies don’t care, I can hardly see Congress making an issue out of it, Congress is pretty much bought and paid for on this issue as we’ve seen, maybe 530 or so members have no opinions on the matter except what they are paid to believe.

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  3. There have been case after case, Chinese mostly, intercepted at the airport with documents. It’s so ridiculous, because now they don’t need to carry the documents. They can just download the originals onto a flash drive, put them into a Dropbox folder, or do something electronic. Poof!! Your entire intellectual property, stolen because of your desire to get cheap scab labor.

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  4. As I listen to them on CNBC saying it will be embarrassing to America if the TPP fails, I’m thinking you are probably right.

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  5. Then there is the issue of federally funded research in “the interest of national security” that is performed by foreign nationals in the laboratories of faculty members who maintain close ties with their home countries, These relationships include faculty appointments at foreign universities as well as membership in government sponsored research consortia.

    Some even publicly admit that they use their university funded travel to their home country to conduct their business. (I have proof via reimbursement request paperwork.)

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  6. Oops, posted that last one with an odd handle I used elsewhere in the blogosphere and leaked in here, “Simple Guy” is me.

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  7. if 10% of “citizen” STEM workers are unethical, its double or triple that with H1-B workers – at least in my experience. I had one H1-B manager mysteriously escorted out of the building. Rumors were that he’s was taking a cut, via kickbacks from staffing firms, out of most of his H-1B employees billing rates.

    After the recent Aetna data breach, a fellow H1-B co-worker admitted that most of these breaches are probably done internally by H1-Bs. Many are DBAs that have unlimited access to databases with personal and credit data. He said they most likely export the data to thumb drives and sell them to crooks in Third world nations.

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  8. Here are some major media sources on Chinese technological spying in the U.S. It’s not mentioned much, and never in the context of H1-B or similar visas.

    http://www.washingtonpost.com/world/national-security/chinese-citizen-sentenced-in-military-data-theft-case/2013/03/25/dc4567fa-9593-11e2-ae32-9ef60436f5c1_story.html?hpid=z1

    ‘In the past four years, nearly 100 individual or corporate defendants have been charged by the Justice Department with stealing trade secrets or classified information for Chinese entities or exporting military or dual-use technology to China, according to court records. A number of other cases involving China remain under seal, according to the Justice Department.’

    http://www.nytimes.com/2013/06/06/world/asia/wide-china-push-is-seen-to-obtain-industry-secrets.html

    ‘Though considerable attention has been focused on Chinese cyberespionage efforts, the institute is at the vanguard of a related push to bolster China’s competitiveness by acquiring overseas technology directly from Chinese scientists working in the United States and other developed countries, say American officials and analysts.’

    http://investigations.nbcnews.com/_news/2013/08/06/19566531-chinese-firm-paid-insider-to-kill-my-company-american-ceo-says

    ‘Federal prosecutors call the alleged cyber theft from American Superconductor (AMSC) in Devens, Mass., one of the most brazen cases yet of Chinese economic espionage in the United States….

    Sinovel, along with two of its executives and the former American Superconductor engineer, were recently indicted by a federal grand jury on charges of trade theft and wire fraud.’

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  9. http://www.nytimes.com/2014/02/05/us/chinese-implicated-in-agricultural-espionage-efforts.html

    ‘What ensued was about a year of F.B.I. surveillance of Mr. Mo and his associates, all but one of whom worked for the Beijing Dabeinong Technology Group or its subsidiary Kings Nower Seed. The result was the arrest of Mr. Mo last December and the indictment of five other Chinese citizens on charges of stealing trade secrets in what the authorities and agriculture experts have called an unusual and brazen scheme to undercut expensive, time-consuming research.’

    http://www.nytimes.com/2014/02/03/business/media/imax-faces-a-threat-in-china.html

    ‘Imax’s misappropriation claims are centered on Gary Tsui, a former Imax software engineer who is accused of taking the company’s technology and using it to found or provide engineering help to low-cost Chinese rivals.

    [related]

    http://www.nytimes.com/2013/03/03/world/middleeast/seized-arms-off-yemen-raise-alarm-over-iran.html?hp

    The missiles were labeled QW-1M and bore stencils suggesting that they had been assembled at a factory represented by the state-owned China National Precision Machinery Import and Export Corporation, sanctioned by the United States for transfers of missile technology to Pakistan and Iran.’

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