Inside the Ring - China espionage

Inside the Ring - China espionage
Inside the Ring - China espionage 

By Bill Gertz
August 10, 2007

Chinese military intelligence collectors scored a recent coup in 
stealing valuable U.S. simulation technology that will boost Beijing's 
combat training.

Xiaodong Sheldon Meng, 42, a former Beijing resident, pleaded guilty 
Aug. 1 in California to illegally providing China's military with 
embargoed software used in air force and navy training.

Meng also pleaded guilty to stealing proprietary corporate technology 
known as "Mantis" while working for the San Jose-based Quantum3D Inc., 
and attempting to sell it to China's Navy Research Center.

Prosecutors said Meng violated arms export control laws by selling 
China's military what is called "viXsen" source code, a Quantum3D 
product controlled for export as a defense article. The software is used 
in "visual simulation software program used for training military 
fighter pilots."

Meng also illegally installed a copy of Quantum3D's "Mantis" simulation 
software on a Chinese navy site and altered the code to make it appear 
as though it belonged to a competitor. The software was part of a sales 
demonstration project for the Chinese produced by Meng.

"This conviction, the first in the nation for illegal exports of 
military-related source code, demonstrates the importance of 
safeguarding our nation's military secrets and should serve notice to 
others who would compromise our national security for profit," said 
Kenneth L. Wainstein, assistant attorney general for national security. 
"This case is the latest evidence of the department's enhanced 
investigative and prosecutorial efforts to keep America's critical 
technology from falling into the wrong hands."

Investigators said Meng stole software that is "designed for precision 
training of military fighter pilots in night vision scenarios, among 
other applications."

U.S. officials said the compromise could be more extensive than outlined 
by prosecutors because Quantum3D produces mainly military products, 
including day and night combat training simulators, and advanced 
infrared, electro-optical and night vision goggle devices.

"The software stolen by Meng will improve the PLA's ability to achieve 
more sophisticated military simulation for training and mission planning 
purposes, that is, to help them to better kill us," said Richard Fisher, 
a specialist at the International Assessment and Strategy Center, 
referring to the acronym for China's People's Liberation Army.

The software acquisition is part of a large-scale Chinese military 
technology collection program targeting the United States. China is in 
the process of building up its military forces with the goal of 
challenging the United States in any conflict over Taiwan. The buildup 
includes acquisition of advanced Russian fighter bombers as well as new 
indigenous J-10 fighters.

The Pentagon's annual report on China's military power said such illegal 
software acquisitions are part of China's "aggressive and wide-ranging 
espionage" that poses "the leading threat to U.S. technology." The 
technology is "vital for the [Chinese military's] transformation into an 
information-based, network-centric force," the report stated, noting 
more than 400 U.S. investigations related to China since 2000.


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