Tuesday, September 27, 2011
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Ninth Circuit Upholds Conviction of Economic Spy for Chinese
By KENNETH OFGANG, Staff Writer
An elderly ex-engineer for Boeing Corporation was properly convicted and sentenced for passing his employer’s secrets to Chinese officials, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The judges upheld U.S. District Judge Cormac Carney’s findings, after a nonjury trial, that Dongfan “Greg” Chung was guilty of economic espionage, conspiracy, acting as an unregistered agent of a foreign government, and lying to federal agents. Carney, a Central District of California judge who sits in Santa Ana, sentenced Chung to 15 years, eight months in prison in July of last year.
Chung, 75, was reportedly the first person ever to go on trial under the Economic Espionage Act of 1996. Carney found that he kept more than 300,000 pages of sensitive papers in his home, and rejected his claims that he had permission to take the documents home for work and that he kept them because he intended to write a book.
Statute of Limitations
Prosecutors presented evidence of what they said was a scheme going back 30 years, although the charges were limited by a five-year statute of limitations. Documents showed that Chung told the Chinese he wanted to contribute to his “motherland” and its “Four Modernizations”—a program launched in the 1970s to expand Chinese economic power by focusing on the military, technology, industry and agriculture.
The FBI learned about Chung while investigating Chi Mak, an engineer working for a naval contractor. Among the documents seized from Mak’s home was a letter in which he asked for information about airplanes and the space shuttle and thanked Chung for previously providing unspecified information to China.
Mak was convicted of acting as an unregistered foreign agent and other crimes in 2007. Chung, who was fired by Boeing in 2006 after agents found the letter, was indicted in 2008.
The EAA makes it a crime, punishable by up to 15 years in prison, to, among other things, receive or possess documents containing trade secrets that the person knows to have been stolen or obtained without authorization, with intent to benefit a foreign country or entity.
Space Shuttle
Carney found Chung guilty on six counts of violating the act and one count of conspiring to violate it, based on his possession of four documents related to a phased array antenna that Boeing developed for the space shuttle and two related to the Delta IV Rocket.
The judge also found that Chung made a false statement to agents when he told them he had permission to take documents home. His supervisor testified that while employees occasionally received such permission, he had no memory of giving Chung approval to do so.
Chung’s lawyers also argued that even if he violated company policy by taking the papers home, it was not a crime to do so, and that there was no evidence he passed information to the Chinese after February 2003, the beginning of the five-year limitations period.
But Judge Susan Graber, writing for the Ninth Circuit, said that even allowing for the possibility that his supervisor had given Chung permission to take some documents home, without remembering having done so, several employees testified that no one was allowed to keep documents at their residences long-term. That was sufficient for the district judge to find that Chung lied, the appellate jurist said.
Graber also said there was sufficient evidence that the documents contained trade secrets, and that Chung possessed them with intent to benefit China.
“Given Defendant’s history of passing technical documents to China...a rational trier of fact reasonably could infer from Defendant’s more recent possession of similar documents that his intent to benefit China persisted well into the limitations period and extended to his possession of the trade secrets,” the judge wrote. “Moreover, given Defendant’s history of delivering information to China, and the absence of any evidence
(other than his own exculpatory testimony) regarding his scholarly or literary intentions, a rational fact-finder could reasonably discount Defendant’s explanation that he possessed the documents because he intended to write a book.”
The appellate panel also upheld the sentence, which was less than the 20 years recommended by prosecutors but greater than the term argued for by the defense. Chung, who reportedly told the judge at sentencing that he was “not a spy...only an ordinary man,” is presently scheduled for release in 2023 and his housed at a low security prison in Texarkana, Texas, according to the Bureau of Prisons.
The defense argued that the sentence was excessive because the judge improperly relied on a section of the Sentencing Guidelines dealing with the illegal gathering of national defense information. The provision should not have applied because none of the data in Chung’s possession was classified or governmental, his attorney argued.
But Graber said Carney was correct because the defendant was convicted of a crime for which there is no specific guideline, and the district judge applied the most analogous guideline. She noted that the same guideline applies to all crimes involving the obtaining of defense information that is not “top secret,” and that there is no requirement that the material be classified for that guideline to apply.
The case is United States v. Chung, 10-50074.
Copyright 2011, Metropolitan News Company