First economic espionage trial in U.S. begins

/ Source: The Associated Press

A Chinese-born engineer stole secret information critical to the nation's space program and shared it with China, prosecutors said Tuesday during opening arguments in the first economic espionage case to reach trial in the United States.

Prosecutors laid out their case against Dongfan "Greg" Chung, 73, in U.S. District Court in Santa Ana.

Chung, a Chinese-born engineer, is accused of working as a spy for China for more than 30 years while employed at Rockwell International and then Boeing Co.

He has pleaded not guilty to charges of conspiracy, economic espionage, lying to federal agents, obstruction of justice and acting as a foreign agent.

The government says he stole secrets on the U.S. space shuttle and the Delta IV rocket. U.S. District Judge Cormac Carney dismissed charges last week relating to the C-17 military transport at the government's request.

Assistant U.S. Attorney Greg Staples told Carney in his opening statement that the lifeblood of Rockwell International and Boeing Co. was the secret information they developed to build the space shuttle and keep ahead of international competition. The information Chung stole took millions of dollars to develop, he said.

"Information, security and betrayal: These are the three pillars of the government's case," he said. "Boeing builds things, but the crucial point in this case is, nothing gets built without information, the kind of information we're talking about."

'My client is a pack rat'
Defense attorney Tom Bienert countered that the government would not be able to prove his client had done anything wrong, particularly after 2003, which is when the defense believes the statute of limitations expired.

"There simply will be no evidence that my client transferred any information to the People's Republic of China, there will be no evidence that he transferred anything, much less anything that would be a trade secret," Bienert said.

Bienert also showed the judge pictures of his client's house with papers and books on every available surface, stacked on the floor and overflowing the bathtub. He said that explained why FBI agents found a quarter-million pages of Boeing documents there.

"What you're going to find is that my client is a pack rat, a man who never found something he didn't hold on to. With all respect to my client, his house gives new meaning to clutter," he said. "His house was filled with more books, documents, stuff than just about anyone would ever see."

Six similar cases have settled before trial since the Economic Espionage Act passed in 1996.

'Chinese compatriot'
Chung worked for Rockwell International until it was bought by Boeing in 1996 and remained with the aerospace giant until he was laid off in 2002. He was brought back as a consultant on stress analysis after the Columbia space shuttle disaster in 2003 and was fired when the FBI began its probe in 2006.

The government believes Chung began spying for the Chinese in the late 1970s, just a few years after he became a U.S. citizen and was hired by Rockwell.

In a letter cited in court documents, Chung allegedly explains to a Chinese contact that he sent three sets of volumes dealing with flight stress analysis to China via sea freight and discusses what prosecutors say is his motive.

"Having been a Chinese compatriot for over thirty years and being proud of the achievements by the people's efforts for the motherland, I am regretful for not contributing anything," according to the letter to the contact at the Harbin Institute of Technology in northern China. "I would like to make an effort to contribute to the Four Modernizations of China."

Prosecutors say they discovered Chung's activities while investigating the case of another suspected Chinese spy, Chi Mak. Searches of Mak's house turned up an address book and a letter containing Chung's name.

Mak was convicted in 2007 of conspiracy to export U.S. defense technology to China and sentenced to more than 24 years in prison. Mak, however, was not charged under the Economic Espionage Act.