Risk
4/14/2009
05:30 PM
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%

Chinese National Arrested For Source Code Theft

The information was taken from a New Jersey company that develops, implements, and supports software for environmental applications.

A Chinese citizen on a work visa in the United States was arrested by the FBI last week for allegedly revealing proprietary software code owned by his unidentified U.S. employer to a Chinese government agency.

Yan Zhu, 31, of Lodi, N.J. -- also known as "Westerly Zhu" -- was arrested on charges of theft of trade secrets, conspiracy, wire fraud, and theft of honest services fraud.

"Crimes of this nature do not get much public attention," FBI Special Agent in Charge Weysan Dun said in a statement. "No one is shot, there is no crime scene, no prominent public figures are involved. However, this is an act of economic violence -- a paper crime that robs the victim company of the resources they expended to develop a product."

Dun said that white-collar crimes of this sort are clearly dangerous to America's economic infrastructure. "If American dollars are spent on research and development of a product, and then that product or research is taken without any compensation to American companies, the value of American companies and American products is significantly reduced in the global marketplace," he said.

David Schafer, the assistant federal public defender representing Zhu, declined to comment or to identify Zhu's former U.S. employer.

According to the criminal complaint, Zhu's former employer is an unnamed company based in Mercer County, N.J., that develops, implements, and supports software for environmental applications. One of its applications is an environmental information management portal for the Chinese market.

Zhu, who holds a Ph.D. from Columbia University in geo-environmental engineering, was hired by the U.S. company around April 2006 as a senior environmental engineer and signed a confidentiality agreement.

In July 2007, the U.S. company signed a contract with Shanxi Province, China, to provide its software to the local Environmental Protection Administration ("Shanxi EPA"). The contract called for four payments totaling about $1.5 million -- a down payment and three subsequent payments following the installation of module 1, modules 2 and 3, and module 4.

In November 2007, the Shanxi EPA made the down payment of about $440,000. By March 2008, all four modules were installed, but the U.S. company never received further payment.

The U.S. company subsequently recognized the software it had provided to Shanxi Province had been altered, which would require access to the company's source code. The company also noticed that a Chinese company set up to serve as a payment conduit for the deal was now listed on a Shanxi Web site as a vendor of environmental software.

The complaint alleges that Zhu e-mailed his company's database and more than 2,000 pages of source code to co-conspirators in China and that the individuals have been selling the U.S. company's software to Chinese government agencies without authorization.

In its 2008 report to Congress, the U.S.-China Economic and Security Review Commission warned that "China is targeting U.S. government and commercial computers for espionage."

In 2007, the group said, "Chinese espionage activities in the United States are so extensive that they comprise the single greatest risk to the security of American technologies."

China, however, is not alone in seeking to obtain U.S. technology through espionage. Many nationals of other countries and U.S. citizens have been involved in technology theft or illegal technology exports.


Attend a Webcast on why bad security breaches keep happening to good organizations. It happens Wednesday, April 15. Find out more and register.

The article was edited on 4/15 to correct the amount Shanxi EPA paid in Nov. 2007.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: This comment is waiting for review by our moderators.
Current Issue
Security Operations and IT Operations: Finding the Path to Collaboration
A wide gulf has emerged between SOC and NOC teams that's keeping both of them from assuring the confidentiality, integrity, and availability of IT systems. Here's how experts think it should be bridged.
Flash Poll
New Best Practices for Secure App Development
New Best Practices for Secure App Development
The transition from DevOps to SecDevOps is combining with the move toward cloud computing to create new challenges - and new opportunities - for the information security team. Download this report, to learn about the new best practices for secure application development.
Slideshows
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2017-0290
Published: 2017-05-09
NScript in mpengine in Microsoft Malware Protection Engine with Engine Version before 1.1.13704.0, as used in Windows Defender and other products, allows remote attackers to execute arbitrary code or cause a denial of service (type confusion and application crash) via crafted JavaScript code within ...

CVE-2016-10369
Published: 2017-05-08
unixsocket.c in lxterminal through 0.3.0 insecurely uses /tmp for a socket file, allowing a local user to cause a denial of service (preventing terminal launch), or possibly have other impact (bypassing terminal access control).

CVE-2016-8202
Published: 2017-05-08
A privilege escalation vulnerability in Brocade Fibre Channel SAN products running Brocade Fabric OS (FOS) releases earlier than v7.4.1d and v8.0.1b could allow an authenticated attacker to elevate the privileges of user accounts accessing the system via command line interface. With affected version...

CVE-2016-8209
Published: 2017-05-08
Improper checks for unusual or exceptional conditions in Brocade NetIron 05.8.00 and later releases up to and including 06.1.00, when the Management Module is continuously scanned on port 22, may allow attackers to cause a denial of service (crash and reload) of the management module.

CVE-2017-0890
Published: 2017-05-08
Nextcloud Server before 11.0.3 is vulnerable to an inadequate escaping leading to a XSS vulnerability in the search module. To be exploitable a user has to write or paste malicious content into the search dialogue.

Dark Reading Radio
Archived Dark Reading Radio
In past years, security researchers have discovered ways to hack cars, medical devices, automated teller machines, and many other targets. Dark Reading Executive Editor Kelly Jackson Higgins hosts researcher Samy Kamkar and Levi Gundert, vice president of threat intelligence at Recorded Future, to discuss some of 2016's most unusual and creative hacks by white hats, and what these new vulnerabilities might mean for the coming year.