Prosecutors tie alleged spymaster Yangun Xu to malware attack on French aviation company in 2014

Xu's alleged spy conspiracy spanned globe
Prosecutor Matthew McKenzie questions Rizwan Ramakdawala on Oct. 26 in trial of Yanjun Xu.
Posted at 5:08 PM, Oct 26, 2021

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 2018and 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.

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