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On May 19, 2014, the U.S. Department of Justice announced that a federal grand jury had indicted five Chinese military personnel in a cyber-espionage case involving six U.S. companies and organizations. DOJ alleged that the defendants stole trade secrets and other business information; China rejected the accusations as fabricated and ungrounded. The indictment was an accusation, not a finding of guilt.
What the United States alleged
The Justice Department said the indictment in the Western District of Pennsylvania charged five men—Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu and Gu Chunhui—with offenses including computer hacking, economic espionage, trade-secret theft and related crimes. DOJ alleged that they were officers in Unit 61398 of the Third Department of China’s People’s Liberation Army. It said Wang, Sun and Wen allegedly hacked or attempted to hack U.S. entities, while Huang and Gu allegedly supported the operation by managing infrastructure such as domain accounts. The DOJ announcement described the case as the first criminal charges against known state actors for this type of hacking.
DOJ identified six alleged victims and said the alleged activity spanned 2006 through 2014:
- Westinghouse Electric Co.
- U.S. subsidiaries of SolarWorld AG
- United States Steel Corp.
- Allegheny Technologies Inc.
- The United Steelworkers labor organization
- Alcoa Inc.
What information was allegedly taken
The DOJ summary described different kinds of information sought or accessed at the named organizations. These are allegations in the indictment, not findings established at trial.
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Westinghouse: power-plant designs and emails
DOJ said the indictment alleged that Sun stole technical and design specifications for parts of AP1000 power-plant buildings while Westinghouse was constructing plants in China and negotiating technology transfers with a Chinese state-owned enterprise. Prosecutors also alleged that sensitive, non-public emails belonging to Westinghouse decision-makers were taken.
SolarWorld: business records and legal material
The indictment allegedly described the theft of thousands of SolarWorld files, including cash-flow, manufacturing, production and cost information, as well as privileged attorney-client material connected to trade litigation.
Allegheny Technologies: employee credentials
DOJ said Wen allegedly accessed the company’s network and stole credentials for virtually every employee.
U.S. Steel, United Steelworkers and Alcoa: trade-related communications
The DOJ summary also alleged spear-phishing aimed at U.S. Steel employees around trade litigation, theft of internal United Steelworkers emails discussing trade strategies, and theft of Alcoa emails after the company announced a partnership with a Chinese state-owned enterprise.
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Why China called the accusations fabricated
In a contemporaneous May 19, 2014 report, SecurityWeek quoted Chinese Foreign Ministry spokesperson Qin Gang calling the accusations “ungrounded.” The report quoted the Chinese statement: “This US move, which is based on fabricated facts, grossly violates the basic norms governing international relations and jeopardizes China-US cooperation and mutual trust.”
SecurityWeek also reported that China denied the Chinese government, military or relevant personnel had participated in cyber theft of trade secrets and called on the United States to withdraw the indictment. Those statements represent China’s response; they do not resolve the underlying allegations.
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The DOJ announcement listed 31 counts under federal computer-fraud, identity-theft, economic-espionage and trade-secret statutes. It also listed maximum potential penalties for statutory counts. Those maximums were possible consequences if a defendant were convicted, not sentences imposed.
Most importantly, DOJ’s own release stated: “An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law.” The announcement documents what prosecutors charged and alleged; it is not a court finding that the defendants committed the acts. The sources cited here do not establish whether the five defendants were later tried, convicted, arrested or otherwise had their cases resolved.
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What the 2014 announcement said about policy
U.S. officials framed the case as an effort to deter state-sponsored theft of commercial information. Attorney General Eric Holder said, “Success in the global market place should be based solely on a company’s ability to innovate and compete, not on a sponsor government’s ability to spy and steal business secrets.” Assistant Attorney General for National Security John Carlin said, “Cyber theft is real theft and we will hold state sponsored cyber thieves accountable as we would any other transnational criminal organization that steals our goods and breaks our laws.”
FBI Director James B. Comey described the indictment as “an important step” while adding that “there are many more victims, and there is much more to be done.” U.S. Attorney David Hickton called it “This 21st century burglary.” These are officials’ characterizations of the case, not independent findings about its impact. SecurityWeek noted at the time that the longer-term effect on U.S.–China relations and efforts to stop the alleged activity remained uncertain.
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