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Wednesday, June 18, 2008

Another Little Case of Espionage Involving Israel, China and the US

This NBC article leaves out a very important fact in this espionage case in which this man was convicted of "selling" fighter pilot software to China. (authorities have declined to say whether or not he made the sale) He did this while he was working for an Israeli company, Orad. He stole this technology then sold it to China disquised as a product manufactured by that Israeli company. And I suppose Orad had no idea that their employ was doing this, seeing as how he was working for them in China at the time.

Read from the US Department of Justice:

Former Chinese National Charged with Stealing Military Application Trade Secrets from Silicon Valley Firm to Benefit Governments of Thailand, Malaysia, and China

Quote from Meng's attorney:

"Mr. Meng was not engaged in acts of espionage on behalf of a foreign government," his attorney, Manuel Araujo, wrote in court documents. "He was engaged in the pursuit of making sales on behalf of his employer, Orad Ltd." (source)

So........where are the charges and investigation brought against Orad? They do have an office in New Jersey.

Want to know what Orad is doing in China nowadays? They won the Olympics Games contract from Central China Television to cover the Behjing games

A little "espionage" with the Olympics anyone?

UPDATE: From the Department of Justice:

According to court records, Meng committed economic espionage by misappropriating a trade secret, known as “Mantis 1.5.5,” from his former employer, Quantum3D Inc., with the intent to benefit a foreign government, specifically the People’s Republic of China (PRC) Navy Research Center in Beijing. He did so by using the Mantis 1.5.5 trade secret as part of a demonstration project in attempting to sell products of his new employer, Orad, Hi-Tec Systems Ltd., which was a direct competitor of Quantum3D. The trade secret at issue, known as “Mantis,” is a Quantum3D product used to simulate real world motion for military training purposes.



SJ Computer Engineer Sentenced For Selling Secrets To China
Chinese National Sold Fighter Pilot Software To China




CUPERTINO, Calif. -- An engineer who admitted he tried to sell fighter-pilot training software to the Chinese Navy has been sentenced to 24 months in federal prison.



Xiaodong Sheldon Meng, 44, is the first person sentenced on the rare charge of committing economic espionage against the U.S.


It's the most serious crime under the Economic Espionage Act of 1996.

United States Attorney Joseph P. Russoniello announced the software engineer born in China and currently a resident of Cupertino, Calif., was sentenced.

Economic espionage alleges the theft of trade secrets with the intent to benefit a foreign government.

In Meng's case, investigators say they found evidence that he went around giving sales pitches to Asian military officials for software stolen from his former employer, San Jose-based Quantum3D Inc.

Meng was also ordered to serve a three-year term of supervised release following his prison term; pay a fine of $10,000, and forfeit computer equipment seized in the case.

On August 1, 2007, Meng pleaded guilty to two national security violations: one count of violating the Economic Espionage Act and one count of violating the Arms Export Control Act and the International Traffic in Arms Regulations.

Meng’s conviction was the first involving military source code under the Arms Export Control Act and marked the second case in which there was a conviction under the Economic Espionage Act for misappropriating a trade secret with the intent to benefit a foreign government, Justice Department officials said.

According to court records, Meng committed economic espionage by misappropriating a trade secret, known as “Mantis 1.5.5,” from his former employer, Quantum3D Inc., with the intent to benefit the Chinese Navy Research Center in Beijing.

He did so by using the Mantis 1.5.5 trade secret as part of a demonstration project in attempting to sell products of his new employer, Orad, Hi-Tec Systems Ltd., which was a direct competitor of Quantum3D, department officials said.

The trade secret at issue, known as “Mantis,” is a Quantum3D product used to simulate real-world motion for military training purposes.

In addition, Meng violated the Arms Export Control Act by knowingly and willfully exporting to the Chinese a defense article on the United States Munitions List without authorization from the United States, department officials said. (and he was working for WHO again when he did this?)

The product viXsen is a Quantum3D visual simulation software program used for training military fighter pilots who use night visual sensor equipment, including thermal imaging.
Many of these misappropriated Quantum3D products were intended primarily for military purposes, department officials said.

For example, nVSensor is a Quantum3D product used to provide night vision simulation and is exclusively used in military applications for precision training and simulation applications, department officials said.

The investigation also established that defendant Meng was assisting in developing two separate military proposals for two separate Air Forces in Southeast Asia involving visual simulation equipment and source code, department officials said.

Copies of two F-16 Full Mission Simulator proposals involving two different countries were found on Meng’s laptop.

Source

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