Original URL: http://www.theregister.co.uk/2007/08/03/feds_bust_meng/

Meng cops plea in CHIP-ICE 'ware espionage bust

Only Brits are allowed to export US death-tech

By Lewis Page

Posted in Government, 3rd August 2007 14:53 GMT

An alphabet soup of federal plods claimed a first yesterday, as one-time Cupertino resident and former Chinese national Xiaodong Sheldon Meng copped a plea to illegally exporting military software.

It was alleged that Meng, originally from Beijing, had worked for Quantum 3D, a technology house based in San Jose. He was employed both in California and as a consultant in Asia. Specialist techno-feds snapped the bracelets on Meng last year, charging him with 36 counts of "stealing military application trade secrets... to benefit the governments of Thailand, Malaysia, and China."

Quantum 3D makes various military products, including viXsen™ and nVSensor™ software, used for "precision training of military fighter pilots in night vision scenarios".

Meng has now pleaded guilty to two specimen counts of benefitting "a foreign government, instrumentality, or agent", and to exporting viXsen without a State Department licence. Under the terms of the plea bargain he can now be sentenced to a maximum of two years' jail and up to $1.5m in fines.

Meng is currently out on bail, with the bond set at $500,000. He will be sentenced by the US district judge in San Jose next January.

The Meng manhunt involved feds from the US Attorney's Office Computer Hacking and Intellectual Property (CHIP) Unit, the Federal Bureau of Investigation (FBI), the Department of Homeland Security, Immigration and Customs Enforcement (ICE), and Customs & Border Protection (CBP). The Department of State and the Department of Defense also provided assistance.

"This conviction, the first in the nation for illegal exports of military-related source code... should serve notice to others who would compromise our national security for profit," said CHIP chief Kenneth Wainstein.

Wainstein added that the Meng bust was only part of CHIP's "efforts to keep America's critical technology from falling into the wrong hands".

"One of ICE's top priorities is ensuring that US military products and sensitive technology does not fall into the hands of those who might inflict harm upon America or its allies," added ICE boss Julie Myers.

Special Agent Charlene Thornton, head of the San Franciso FBI office, was pleased too. She said the three year ICE-CHIP-led taskforce had won "a victory in the struggle to ensure the economic security of Silicon Valley and the United States".

The Meng crackdown seems a little inconsistent with other stances taken by the US government, which only days ago gave the nod to British arms firm BAE's purchase of US company Armor.

BAE has often received very sensitive US military technology, including in recent times special access to the F-35 stealth jet programme, perhaps including such things as "stealth technologies like the F-35's radar-absorbing paint", not to mention assistance in modern submarine-design techniques.

BAE has since landed consultancy contracts in which it will show Spanish builders how to make submarine pressure hulls. The company is now building a stealth demonstrator aircraft for the UK government.

The Department of Justice is in fact investigating BAE, but not for exporting America's sensitive technology; rather, for allegedly paying off Islamic royalty to win jet-fighter sales.

And meanwhile, the Armor buy has been approved and a treaty is being negotiated to further free up movement of US military tech to the UK.

Funnily enough, BAE won an order for new warships from Malaysia last year - one of the very countries Mr Meng was busted for dealing with.

Perhaps Mr Meng would have done better to base himself in London, rather than Taiwan. ®