CINCINNATI — Prosecutors tied accused Chinese spymaster Yanjun Xu to other espionage cases on Tuesday, trying to persuade a jury that he was part of a wide-reaching conspiracy to attack aviation companies worldwide and steal their trade secrets.

Frederic Hascoet, a project manager with French aviation company Safran, testified that his laptop computer was infected with malware during a visit to China in January 2014. He had traveled there to oversee a joint venture between Safran and a Chinese company to assemble jet engine parts.

“The IT department said I had a virus and they took my laptop. They had to replace the hard drive,” Hascoet said, using a French interpreter.

A federal grand jury in Cincinnati indicted Xu in 2018 on charges of conspiring and attempting to commit economic espionage and theft of trade secrets from Evendale-based GE Aviation. Prosecutors say China desperately wants to duplicate GE’s highly successful gas turbine engine.

But prosecutors say Xu is part of an extensive conspiracy that dates back to at least 2013 and involves Safran and several other aviation companies.

Xu is not specifically named in or charged by a Southern District of California grand jury in the malware attack on Safran. But prosecutors say in a recent court filing that Xu was still part of that conspiracy.

“The superseding indictment references some of Xu’s actions to obtain technical, aviation information from Safran, including that he directed a Safran employee to plant malware into the company network … Xu’s conduct related to the Safran hacking—some of which is reflected in the Southern District of California indictment—is relevant here,” Assistant U.S. Attorney Tim Mangan wrote in a recent motion.

This is the first of several acts of alleged espionage that prosecutors are expected to show the jury over the coming weeks, to establish Xu as a spymaster who tried to recruit employees of aviation companies to share information.

Whether these actions constitute the legitimate sharing of knowledge and expertise, or the illegal theft of trade secrets, will be up to the jury to decide.

Xu is the first Chinese intelligence agent ever to be extradited to the U.S. to stand trial. His trial began before U.S. District Court Judge Timothy Black on Oct. 18 and is expected to last for one month.

Xu, who is also known as Qu Hui and Zhang Hui, is a deputy division director at the Chinese Ministry of State Security, which is the Chinese intelligence agency.

Agents arrested Xu in Belgium in April 2018 and extradited him to the U.S., where a federal grand jury indicted him on charges of conspiring and attempting to commit economic espionage and theft of trade secrets.

“In an aircraft, weight is king … you have to have the lightest aircraft possible,” testified Rizwan Ramakdawala, Manned Aircraft Division Chief at the U.S. Defense Technology Security Administration.

No one else in the world, except for GE, can manufacture jet engine fan blades made from a light, durable composite material, making the technology highly sought-after. China has been trying to duplicate this technology since at least 2015, Ramakdawala testified.

Prosecutors called a former Boeing IT employee as their last witness on Tuesday, asking him to describe the emails he received from Xu requesting that he share information during trips to China.

“We think your information is compatible with the need of Chinese technology … we would like to invite you for an exchange the next time you return to China,” according to an email that Xu sent to former Boeing employee Sun Li in 2016.

Li, who lives in Washington, testified that he visited his father in China once a year. Xu offered to pay for his travel expenses, if he shared information about Boeing with him, but Li said he refused the offer.

“Boeing being an international defense enterprise, it must have sufficient experience for us to reference. I think there is a lot of room for an exchange even in your field of expertise,” Xu wrote in a 2015 email to Li.

CINCINNATI — The head of the FBI’s counterintelligence unit in Southern Ohio testified on Monday that Chinese intelligence agents downloaded 200 family photos of a GE Aviation engineer before meeting him in 2017, to intimidate him to become a spy.

“I think it shows they took the time to learn about their target,” FBI supervisory special agent Bradley Hull said. “The presence of over 200 images brought to a meeting in a foreign country could be used as a manner of coercion … he still has family in China.”

Hull has spent three days on the witness stand laying out the espionage case against alleged spymaster Yanjun Xu, and enduring cross-examination about its possible weaknesses.

The historic case is being heard in U.S. District Court in Cincinnati because it centers on Evendale-based GE Aviation.

China specifically wants to steal trade secrets involving polymetric composites, which Hull said GE has spent hundreds of millions of dollars to develop over decades. GE is the only company to possess this technology, allowing it to build bigger, lighter, and more fuel-efficient commercial aircraft and sell them worldwide.

Courtesy: Marlene Steele

This case began in 2017 when GE noticed suspicious activity by one of its engineers, who had traveled to China to give a presentation at a university with GE documents loaded onto his personal laptop. It launched an internal investigation and alerted the FBI.

“GE looks for employees within its companies with red flags,” Hull said. WCPO is not naming the engineer, who GE suspended without pay in 2017 and fired in 2018, because he has not been charged with a crime.

FBI agents executed a search warrant on the engineer’s home on Nov. 1, 2017, and he began cooperating. He eventually lured Xu to a meeting in Brussels on April 1, 2018, where Belgian police were waiting to arrest him.

Last week a Belgian police chief inspector testified about the money, four cell phones, memory cards, hard drives, magnetic keys, card readers, SIM card holders and other devices he found inside a backpack that was carried by Xu’s colleague, Heng Xu, when police intercepted both men.

Months later Xu was extradited to the U.S., where a federal grand jury indicted him on charges of conspiring and attempting to commit economic espionage and theft of trade secrets.

Xu, who is also known as Qu Hui and Zhang Hui, is a deputy division director at the Chinese Ministry of State Security, which is the Chinese intelligence agency.

Xu’s attorney, Ralph Kohnen, described his client as the victim of an FBI setup and an unfortunate pawn in a trade war between the United States and China.

But prosecutors are using Xu’s own words and images – from emails, text messages, photos, calendar entries, documents, and recordings from his confiscated cell phone – to build their case against him.

“People in intelligence like us – we focus on aviation,” Xu said to a colleague in 2016, according to a transcript Hull read aloud in court. “The leadership asks you to get the materials of the U.S. – the U.S. F-22 fighter aircraft. You can’t get it by sitting home.”

The FBI used Xu’s cell phone to learn the inner workings of Chinese espionage, Hull said, including the names of agents who were in Xu’s chain of command, and how they operated.

For example, text messages reveal that Xu and his colleagues used coded numbers and letters to replace sensitive words in correspondence, such as de-icing technology and U.S. aerial refueling aircraft, Hull said.

Prosecutors showed jurors a photo of Xu’s membership card to the Chinese Communist Party, which Hull said “no one” in the FBI had ever seen before.

Xu has been an agent since 2003, steadily earning promotions. His current post is deputy division director in the Sixth Bureau, Jiangsu Province Ministry of State Security, according to his resume, which was kept as a photo in his cell phone.

Testimony in the case is moving slowly, with two Mandarin interpreters now in the courtroom, who require breaks every 30 minutes. It is expected to last for one month.

CINCINNATI — Jury selection began Monday morning in the case of Yajun Xu, who is accused of recruiting spies to steal aviation and aerospace technology from companies around the world, including Cincinati-based GE Aviation. In a historic case, Xu is the first-ever intelligence agent extradited from China to the U.S. to stand trial.

WCPO I-Team reporter Paula Christian said the judge, unannounced, closed the courtroom to the public as counsel began selecting jurors, including journalists and media covering the case.

Xu, who is also known as Qu Hui and Zhang Hui, is a deputy division director at the Chinese Ministry of State Security.

But to federal prosecutors, he is a spymaster.

“This is espionage, this is real espionage,” said David DeVillers, a former U.S. Attorney for the Southern District of Ohio who briefly oversaw Xu’s case. “We have a real situation where somebody in the intelligence community of the Chinese government is recruiting spies and got extradited for doing it.”

Agents arrested Xu in Belgium in April 2018 and extradited him to the U.S., where a federal grand jury indicted him on charges of conspiring and attempting to commit economic espionage and theft of trade secrets.

Courtesy: Butler County Jail

He faces up to 15 years in prison if convicted.

"This particular trial will have the biggest impact on our relationship with China of any ... criminal case that’s gone to trial of any individual. There’s no doubt about that," DeVillers said.

Because prosecutors allege that Xu was part of a conspiracy, it is likely that the spies he recruited, or tried to recruit, will testify during the month-long trial. His case could expose far-ranging connections to other alleged acts of espionage taking place worldwide.

Federal agents may also reveal how they identify and track Chinese spies, and the methods that large companies, such as GE, use to protect themselves against espionage.

“This is really a precedent-setting case,” said Jim Lewis, a former member of the U.S. Foreign Service and Senior Executive Service, who is now a senior vice president and program director at the Center for Strategic and International Studies in Washington, D.C.

“We’ve never been able to extradite … a Ministry of State Security intelligence agent from another country to the United States,” Lewis said. “Getting them on trial, is really an important step toward making the Chinese rethink the cost of espionage.”

Xu began targeting aviation companies worldwide in December 2013, and possibly even earlier. He recruited employees, asking them to travel to China to make university presentations. He paid their costs and gave them a stipend, according to the indictment.

“Jet engine technology, aerospace technology is important to China because they don’t have indigenous capabilities,” Lewis said. “Particularly for the jet engines you need for fighter aircraft. They can’t make one. So that’s why they keep trying to steal the technology.”

Prosecutors allege that Xu recruited a GE Aviation engineer who was deeply involved in the design and analysis of new commercial jet engines. He was paid $3,500 and free travel, lodging and meals for a one-hour presentation in China.

That engineer, who no longer works at GE, will likely be a key witness in the government’s case against Xu.

Defense attorneys will likely argue that Xu was simply encouraging the legitimate sharing of ideas and research; that it benefitted both nations and wasn’t espionage.

What jurors believe about the true nature of Xu’s motives will decide his fate.

Lot Tan

U.S. District Court Judge Timothy Black will oversee the trial, which pools jurors from largely white, conservative, rural counties stretching to Scioto and Lawrence to the east, and Clinton and Highland counties to the north.

Veteran Cincinnati criminal prosecutors Tim Mangan and Emily Glatfelter will lead the government’s case against Xu. They most recently won a high-profile conviction at trial against Evans Landscaping owner Doug Evans on minority contracting fraud charges in December 2018. He is currently serving a 21-month prison term.

On the defense side, Xu has a large team made up of several former federal prosecutors, including Ralph Kohnen and Bob McBride of Taft Stettinius & Hollister.

Lewis is highly interested not only in the trial, but in China’s reaction should the jury convict Xu.

“That will be one of the things they’ll need to decide is – do they want to raise the stakes by violating the unspoken rules of espionage, to try to get a hostage to get this Chinese agent out of jail,” Lewis said. “If the Chinese can arrest somebody credibly … the Chinese will be looking for an opportunity to see if they can do a swap to trade him out.”

The Southern District of Ohio has been a hotbed for espionage and theft of trade secret prosecutions related to China over the past three years.

China is interested in a broad range of U.S. technology, from biological to engineering, “anything and everything,” DeVillers said.

Lot Tan

“It’s everything, it truly is. It’s extremely broad,” DeVillers said. “We have a lot of research in Ohio, particularly the Southern District of Ohio … with GE, with the universities we have here, with Children’s Hospital,” DeVillers said.

China is interested in a broad range of U.S. technology from biological to engineering, “anything and everything,” DeVillers said.

In May a federal judge sentenced an Ohio State University professor to 37 months in prison. Song Guo Zheng admitted that he did not disclose his affiliation with a Chinese university when securing grants in what investigators called a scheme to share federally funded medical research with China.

Agents arrested Zheng in May 2020 after he arrived in Anchorage, Alaska, aboard a charter flight and as he prepared to board another charter on his way to China. He was carrying three large bags, one small suitcase and a briefcase containing two laptops, three cell phones, several USB drives, several silver bars, expired Chinese passports for his family, deeds for property in China and other items.

In an unrelated case, also in the Southern District of Ohio, judges recently sentenced two former researchers at Nationwide Children's Hospital in Columbus to prison time for selling research to China.

Federal judges sentenced Yu Zhou to 33 months in April and his wife, Li Chen, to 30 months in prison in February, and ordered them to pay $2.6 million in restitution.

The pair conducted research in separate laboratories at the hospital’s research institute from 2008 to 2018. The stolen research was used to treat medical conditions in premature babies, liver fibrosis, and liver cancer.

“It’s a policy, it’s actually a policy in China, to go and get this research. It’s been going on for probably 15 years in earnest, and it needs to stop,” DeVillers said. “The only way to stop it … has to be through prosecution. That’s the only way to stop it.”

Lewis agreed, noting that the very things that make the U.S. unique – freedoms of speech and travel, and civil liberties, are what make it vulnerable to exploitation by China.

“There’s already several hundred Chinese intelligence officers operating in the US,” Lewis said. “We aren’t going to be able to deter them, so we’re just going to have to catch more of them.”