Foreign spying against US companies on the rise, FBI says

Jun 29, 2012 By Ken Dilanian, Tribune Washington Bureau

Driven in part by the global financial crisis, foreign intelligence services, corporations and computer hackers have stepped up efforts to steal technology and trade secrets from American companies, the FBI's top spy hunter told Congress on Thursday.

A related threat - illegal sales of U.S. technology - was highlighted when a major military contractor, United Technologies Corp., and two subsidiary units agreed in federal court to pay a $75 million fine for illegally selling embargoed software and components to China that the country used to build a sophisticated attack helicopter called the Z-10.

U.S. officials said Thursday that the fine and other penalties would settle criminal and administrative charges against United Technologies, which is based in Hartford, Conn., and its subsidiaries, Pratt & Whitney Canada and Hamilton Sundstrand. The U.S. prohibits the exporting to China of U.S. military equipment and technology.

Foreign efforts to obtain U.S. technology in violation of U.S. law are not new, but the cost is rising and is a threat to national security, said C. Frank Figliuzzi, who heads the FBI's counterintelligence division. He said U.S. companies have suffered more than $13 billion in losses from economic espionage in the current fiscal year.

"What we're seeing is that foreign nations and their intelligence services are understanding more than ever before that it's cheaper to steal our technology than to use their budget resources in this time of economic crisis to develop it themselves," Figliuzzi told the intelligence subcommittee of the House homeland security committee.

"The theft of U.S. proprietary technology, including controlled dual-use technology and military-grade equipment, from unwitting U.S. companies is one of the most dangerous threats to national security," said John P. Woods, assistant director of investigations at U.S. Immigration and Customs Enforcement.

operating from abroad use increasingly sophisticated attacks to infiltrate corporate networks and siphon out intellectual property secrets. But so-called insiders - employees or contractors who steal documents, or download files onto portable media - are responsible for a growing percentage of cases.

In February, for example, a federal grand jury indicted a San Francisco couple and others suspected of conspiring to steal from DuPont for a Chinese state-owned company. Figliuzzi said it was the first U.S. criminal case alleging state-sponsored economic spying.

The group allegedly stole information on the production of titanium dioxide, a white pigment used to color paper, plastics and paint. Delaware-based DuPont holds the largest share of the $12 billion annual market in the compound. It is one of the largest economic espionage cases in history.

With that case and others, the FBI has made 10 arrests for this fiscal year. Courts have indicted 21 individuals or companies and convicted nine defendants, Figliuzzi said.

Speaking to reporters after the hearing, Figliuzzi said investigators had become more adept at determining who is behind cyber spying from abroad. But he said there is no consensus on how to pursue those people, particularly if they are working for a foreign government.

"That's the big question," he said.

Explore further: LinkedIn membership hits 300 million

5 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

Chinese economic spying 'intolerable': US lawmaker

Oct 04, 2011

A US lawmaker said on Tuesday that Chinese economic espionage, including cyber spying, has reached an "intolerable level" and called for the United States and its allies to confront Beijing.

Security firm: Hackers hit chemical companies

Nov 01, 2011

(AP) -- Cyber attacks traced to China targeted at least 48 chemical and military-related companies in an effort to steal technical secrets, a U.S. computer security company said Tuesday, adding to complaints about pervasive ...

Fears of spying hinder China Mobile license

May 11, 2012

Concerned about possible cyber-spying, U.S. national security officials are debating whether to take the unprecedented step of recommending that a Chinese government-owned mobile phone giant be denied a license to offer international ...

Rare economic espionage case ends in jury deadlock

Nov 24, 2009

(AP) -- Two men accused of the rare charge of economic espionage against the U.S. have been acquitted on two counts, but they could face a retrial on three other counts on which a jury deadlocked.

Rare economic espionage case going to trial

Oct 21, 2009

(AP) -- Two men accused of stealing computer chip blueprints - and trying to tap the Chinese government to help launch a startup built on the contraband - are becoming the first defendants charged with economic espionage ...

Guilty verdict in theft of Motorola secrets for China

Feb 08, 2012

A former software engineer for Motorola was found guilty Wednesday of stealing trade secrets from the US technology firm just before she tried to leave the country for China, the Justice Department said.

Recommended for you

LinkedIn membership hits 300 million

Apr 18, 2014

The career-focused social network LinkedIn announced Friday it has 300 million members, with more than half the total outside the United States.

Researchers uncover likely creator of Bitcoin

Apr 18, 2014

The primary author of the celebrated Bitcoin paper, and therefore probable creator of Bitcoin, is most likely Nick Szabo, a blogger and former George Washington University law professor, according to students ...

White House updating online privacy policy

Apr 18, 2014

A new Obama administration privacy policy out Friday explains how the government will gather the user data of online visitors to, mobile apps and social media sites. It also clarifies that ...

User comments : 0

More news stories

Ex-Apple chief plans mobile phone for India

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

Health care site flagged in Heartbleed review

People with accounts on the enrollment website for President Barack Obama's signature health care law are being told to change their passwords following an administration-wide review of the government's vulnerability to the ...

A homemade solar lamp for developing countries

( —The solar lamp developed by the start-up LEDsafari is a more effective, safer, and less expensive form of illumination than the traditional oil lamp currently used by more than one billion people ...

NASA's space station Robonaut finally getting legs

Robonaut, the first out-of-this-world humanoid, is finally getting its space legs. For three years, Robonaut has had to manage from the waist up. This new pair of legs means the experimental robot—now stuck ...

Filipino tests negative for Middle East virus

A Filipino nurse who tested positive for the Middle East virus has been found free of infection in a subsequent examination after he returned home, Philippine health officials said Saturday.

Egypt archaeologists find ancient writer's tomb

Egypt's minister of antiquities says a team of Spanish archaeologists has discovered two tombs in the southern part of the country, one of them belonging to a writer and containing a trove of artifacts including reed pens ...