In two separate cases out of U.S. Attorneys’ Offices on opposite coasts, several individuals are charged – one of whom was arrested yesterday – in connection with sophisticated schemes to transfer sensitive technology, goods, and information for the benefit of hostile foreign adversaries, in violation of U.S. law.
In the Eastern District of New York, a father and son team of Iranian nationals are charged with conspiring to export equipment used in the aerospace industry to the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA), in connection with an alleged conspiracy to illegally export U.S. goods and technology without the required licenses.
In the Central District of California, a naturalized chinese was arrested for allegedly stealing trade secrets developed for use by the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles.
A naturalized Chinese was arrested for allegedly stealing trade secrets developed for use by the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles. Chenguang Gong, 57, of San Jose,is charged in a criminal complaint with theft of trade secrets. For least eight years prior to his arrest, Gong participated in PRC Government-sponsored talent programs.
Gong transferred more than 3,600 files from HRL Laboratories, a research and development company owned by The Boeing Company to personal storage devices during his brief tenure with the company last year. Gong worked for HRL from January through April 2023.
According to the complaint, HRL Laboratories only began monitoring Mr. Gong’s network activity after he sent in his resignation on April 14, 2023, claiming that he was “not doing a good job.”
The files Gong allegedly transferred include blueprints for sophisticated infrared sensors designed for use in space-based systems to detect nuclear missile launches and track ballistic and hypersonic missiles, and blueprints for sensors designed to enable U.S. military aircraft to detect incoming heat-seeking missiles and take countermeasures, including by jamming the missiles’ infrared tracking ability.
United States v. Gong (CDCA)
As alleged, Chenguang Gong, 57, of San Jose, California, was arrested yesterday in San Jose and is expected to make his initial appearance today in the Northern District of California. Gong is a native of China and became a United States citizen in 2011.
Gong is charged in a criminal complaint with theft of trade secrets. According to court documents, Gong transferred more than 3,600 files from the research and development company where he worked — identified in court documents as the victim company — to personal storage devices during his brief tenure with the company last year. The files Gong allegedly transferred include blueprints for sophisticated infrared sensors designed for use in space-based systems to detect nuclear missile launches and track ballistic and hypersonic missiles, and blueprints for sensors designed to enable U.S. military aircraft to detect incoming heat-seeking missiles and take countermeasures, including by jamming the missiles’ infrared tracking ability. Some of these files were later found on storage devices seized from Gong’s temporary residence in Thousand Oaks, according to the affidavit in support of the complaint.
Together with the U.S. government and others, the affidavit states, the victim company “has invested tens of millions each year for more than seven years to develop the technology,” and it “would be extremely damaging economically” to the victim company if the technology were obtained by its competitors and “dangerous to U.S. national security if obtained by international actors.”
“We will do everything to protect our nation’s security, including from foreign threats,” said U.S. Attorney Martin Estrada for the Central District of California. “Mr. Gong, who had previously sought to provide the People’s Republic of China with information to aid its military, stole sensitive and confidential information related to detecting nuclear missile launches and tracking ballistic and hypersonic missiles. We know that foreign actors, including the PRC, are actively seeking to steal our technology, but we will remain vigilant against this threat remain vigilant against this threat by safeguarding the innovations of American businesses and researchers.”
“The FBI is committed to protecting our nation’s critical technologies and to pursuing those who look to steal trade secret information for their benefit or for the benefit of foreign adversaries,” said Assistant Director in Charge Donald Alway of the FBI Los Angeles Field Office. “The theft of trade secrets, especially of sensitive military technology, undermines our national security, erodes U.S. competitiveness in the global market, and harms the businesses and individuals who have invested time, resources, and creativity into developing innovative technologies. Our actions today send a strong message that anyone willing to steal proprietary information from U.S. businesses will face consequences in the criminal justice system.”
As alleged in the affidavit, the victim company hired Gong in January 2023 to work at one its laboratories as an application-specific integrated circuit design manager responsible for the design, development and verification of its infrared sensors. Beginning on approximately March 30, 2023, and continuing until his termination on April 26, 2023, Gong transferred thousands of files from his work laptop to three personal storage devices, including hundreds of files after he had accepted a job on April 5, 2023, at one of the victim company’s main competitors.
Many of the files Gong allegedly transferred contained proprietary and trade secret information related to the development and design of a readout integrated circuit that allows space-based systems to detect missile launches and track ballistic and hypersonic missiles while providing resilience and a readout integrated circuit that allows aircraft to track incoming threats in low visibility environments.
Gong also allegedly transferred trade secret files relating to the development of “next generation” sensors capable of detecting low observable targets while demonstrating increased survivability in space, as well as the blueprints for the mechanical assemblies used to house and cryogenically cool the victim company’s sensors. This information was among the victim company’s most important trade secrets worth hundreds of millions of dollars, according to the complaint, and many of the files were marked “[VICTIM COMPANY] PROPRIETARY,” “FOR OFFICIAL USE ONLY,” “PROPRIETARY INFORMATION,” and “EXPORT CONTROLLED.”
During the investigation, the affidavit states, the FBI discovered that, between approximately 2014 and 2022 while employed at several major technology companies in the United States, “Gong submitted numerous applications to ‘Talent Programs’ administered by the People’s Republic of China government.” The affidavit explains that “the PRC has established talent programs through which it identifies individuals located outside the PRC who have expert skills, abilities, and knowledge that would aid in transforming the PRC’s economy, including its military capabilities.” To entice applicants, “the PRC government rewards Talent Recruits with significant financial and social incentives,” noting that the “salaries often meet or exceed salaries the Talent Recruits draw through their non-PRC employment.”
In 2014, while employed at a U.S. information technology company headquartered in Dallas, Texas, the affidavit states that Gong sent a business proposal to a contact at the 38th Research Institute of the China Electronics Technology Group Corporation, a high-tech research institute in China focused on both military and civilian products. In his proposal, translated from Chinese, Gong described a plan to produce high-performance analog-to-digital converters similar to those produced by his employer, noting that the global market for those products “is basically monopolized by several companies in the United States” and that the export of those items from the United States requires a “government export license.”
On May 8, 2023, the FBI executed a search warrant at Gong’s temporary residence in Thousand Oaks, California, and recovered several digital devices containing hundreds of documents marked as confidential or proprietary belonging to the U.S. information technology company, the affidavit alleges.
In another Talent Program application in September 2020, the affidavit states, Gong proposed to develop “low light/night vision” image sensors for use in military night vision goggles and civilian applications. In a video presentation included with Gong’s submission, Gong used a video containing the model number of a sensor developed by an international defense, aerospace, and security company where Gong worked from 2015 to 2019.
According to the affidavit, Gong also travelled to China several times to seek Talent Program funding to develop sophisticated analog-to-digital converters. In his Talent Program applications, Gong underscored that the high-performance analog-to-digital converters he proposed to develop in China had military applications, explaining that they “directly determine the accuracy and range of radar systems” and that “[m]issile navigation systems also often use radar front-end systems.” In a 2019 email, translated from Chinese, Gong remarked that he “took a risk” by traveling to China to participate in the Talent Programs “because [he] worked for . . . an American military industry company[]” and thought he could “do something” to contribute to China’s “high-end military integrated circuits.” The affidavit states that Gong “continued to seek funding from Chinese government programs through at least March 2022.”
BIS and the FBI are investigating the case.
Comments
No comments on this item Please log in to comment by clicking here