As Seen On TV!
Posted on 12/23/2006 4:35:23 AM PST by Hadean
A Chinese national was charged last week with stealing military trade secrets and using them in demonstration and sales proposals to the Peoples Republic of China, the Malaysian Air Force, and the Thailand Air Force.
Xiaodong Sheldon Meng, 42, is charged with stealing military combat and commercial simulation software and other materials from his former employer Quantum3D, a company based in San Jose, CA. The economic espionage charges allege that Meng, formerly a resident of Beijing, China, and now a resident of Cupertino, CA, stole the trade secrets from Quantum3D with the intent to use them to benefit the foreign governments of China, Thailand, and Malaysia.
“One of ICE's top enforcement priorities is preventing terrorist groups and hostile nations from illegally obtaining U.S. military products and sensitive technology,” said San Francisco Immigration and Customs Enforcement special agent in charge Charles DeMore.
“These items are controlled for good reason -- in the wrong hands, they could be used to inflict harm upon America or its allies," he said.
“This case highlights the vital importance of protecting the intellectual property and trade secrets not only in Silicon Valley but also for our country's businesses," said a US Justice Department official.
The alleged economic espionage and theft and export of trade secrets such as these -- visual simulation training software that has military application, no less -- has real consequences that could jeopardize our country's military advantages in the world, in addition to creating substantial financial losses for our businesses which legitimately developed and owned this information, according to an FBI spokesperson.
Many of Quantum3D's products were designed primarily for military purposes, including military combat training in simulated real-time conditions during the day and night and the use of advanced infrared (IR), Electro-Optical (EO), and Night Vision Goggle (NVG) devices.
The indictment alleges that Meng stole numerous Quantum3D products which were used exclusively in military applications, and designed for precision training of military fighter pilots in night vision scenarios among other applications. The items are classified as defense articles on the US Munitions List and cannot be exported outside the United States without an export license.
According to the charges, Meng took up employment with a competing company, Orad, to “pursue other career development opportunities in China”. At one point, Meng altered the Quantum3D's Mantis program to reflect the name of a program which belonged to Orad, a competitor of Quantum3D, according to the charges. Meng then used that program as part of a demonstration project in the People's Republic of China.
The indictment includes three conspiracy counts; three counts of economic espionage and attempted economic espionage; two counts of violations of the Arms Export Control Act; twelve counts of theft of trade secrets and attempted theft of trade secrets; fifteen counts of foreign and interstate transportation of stolen property; and three counts of making false statements to a government agency.
FBI Special Agent in Charge Charlene B. Thornton said, “The FBI is committed to aggressively pursue those attempting to illegally obtain and export trade secrets vital to maintaining the United States' position as a world leader in innovation. [The] indictment highlights the value of cooperation between law enforcement and private industry in effectively conducting these investigations."
Quantum3D, Inc. has cooperated fully in the government's investigation. A company official noted that the company “believes that enforcement of export and trade secret laws is critical to the functioning of our industry and we're pleased to work with the government in these efforts.
Meng appeared before United States Magistrate Judge Howard R. Lloyd in San Jose on Monday, Dec. 18. Meng was initially charged by complaint on Dec. 9, 2004. The original indictment on the case remains under seal. Meng posted a bail bond for a half-million dollars. If convicted on all counts, he faces a maximum sentence and fine of 50 years and fines of up to $2 million.
Shouldn't he have had a security clearance to work in a company like that, and if so how in the world was he ever granted one being a Chinese National ?
Excerpt:
http://www.usdoj.gov/usao/can/press/2006/2006_12_14_meng.indictment.press.html
APPROXIMATE TIME-LINE OF ALLEGATIONS IN INDICTMENT
• June 19, 2000, to March 7, 2003: Defendant XIAODONG SHELDON MENG was employed at Quantum3D as a Systems Engineer, computer systems analyst, and 3D Graphics Application Senior Engineer. As part of his employment, defendant Meng signed Quantum3D’s proprietary information agreement where he agreed to return all of Quantum3D’s proprietary information upon his departure from the company.
• March 7, 2003: Defendant MENG resigned his position from Quantum3D. At this time, defendant falsely stated that he returned all proprietary information belonging to Quantum3D.
• March 7, 2003 to April 1, 2003: MENG had no employment, consulting or other relationship with Quantum3D.
• March 19, 2003: MENG entered into a consulting agreement with Quantum3D, effective April 1, 2003, in which MENG would serve as an independent consultant for Quantum3D in Asia.
• March 26, 2003: MENG departed the United States from San Francisco, California for Taipei, Republic of China (Taiwan).
• April 1, 2003, to December 31, 2003: XIAODONG SHELDON MENG served as an independent consultant for Quantum3D in Asia. Meng resided in the People's Republic of China (PRC).
• June 15, 2003: MENG attempted to compile, Audition source code version 4.1.0.46, as part of an unauthorized use of Quantum3D products with the Malaysian Air Force.
• August 17, 2003: MENG attempted to compile, and caused others to attempt to compile, Fulcrum source code, a product of Quantum3D, as part of an unauthorized use of Quantum3D products with the Malaysian Air Force.
• August 17, 2003: MENG attempted to compile, and caused others to attempt to compile, source code into the MantisClient application, as part of an unauthorized use of Quantum3D products with the Malaysian Air Force.
• January 6, 2004: MENG represented that he was a Manager for Orad, Inc., a direct competitor of Quantum3D, using an email address of sheldonm@orad.tv.
• January 15, 2004: MENG ended his consulting relationship with Quantum3D citing an effective date of December 31, 2003. Meng had already taken a position with Orad, a direct competitor of Quantum3D, in the PRC, and indicated his desire to “pursue other career development opportunities in China.”
• May 19, 2004: MENG conducted a demonstration for Blue Sky (AVIC I) in Beijing, PRC, as part of the unauthorized use of Quantum3D products with government agencies in China, including Beijing Lantian Aviation Simulation Technology Company, a subsidiary of China Aviation Industry Corporation.
• May 24, 2004: MENG prepared Quantum3D’s OpenGVS for demonstration on the DVG (Digital Video Graphics) in the PRC, as part of the unauthorized use of Quantum3D products with government agencies in China, including Beijing Lantian Aviation Simulation Technology Company, a subsidiary of China Aviation Industry Corporation, the Navy Research Center of China, and the Shenzhen Land Management Bureau.
• May 31, 2004 to June 4, 2004: MENG compared and ran Quantum3D’s product Independence with Orad’s DVG product, as part of the unauthorized use of Quantum3D products with government agencies in China, including Beijing Lantian Aviation Simulation Technology Company, a subsidiary of China Aviation Industry Corporation, the Navy Research Center of China, and the Shenzhen Land Management Bureau.
• June 3, 2004: MENG prepared a DVG digital visual system proposal for Blue Sky (AVIC I) that discussed options for image generator solutions, as part of the unauthorized use of Quantum3D products with government agencies in China, including Beijing Lantian Aviation Simulation Technology Company, a subsidiary of China Aviation Industry Corporation, the Navy Research Center of China, and the Shenzhen Land Management Bureau.
• June 20, 2004: MENG sent an email suggesting the use of Quantum3D products viXsen and Mantis for an image generator proposal. Defendant Meng also noted that he had “genius engineers in China who are interested in developing Sensor” products, as part of an unauthorized use of Quantum3D products with the Malaysian Air Force.
• July 26, 2004: MENG programmed new demonstrations on the DVG system, as part of the unauthorized use of Quantum3D products with government agencies in China, including Beijing Lantian Aviation Simulation Technology Company, a subsidiary of China Aviation Industry Corporation, the Navy Research Center of China, and the Shenzhen Land Management Bureau.
• July 27, 2004: MENG e-mailed a person mailto:sheldon@keverian.com,stating that he had retained a Quantum3D Obsidian FX in the PRC, and asked for a place to store it since it could be used for their development in the future, as part of the unauthorized use of Quantum3D products with the Royal Thai Air Force.
• July 27, 2004: An individual told MENG that the Quantum3D Obsidian FX could be stored in Thailand and directed that the Quantum3D Obsidian FX be sent to the Thai Equipment Research Company, Ltd. in Bangkok, Thailand, including for the Royal Thai Air Force proposal.
• August 16, 2004: MENG unzipped, or caused someone to unzip, the zip file containing source code for product of Quantum3D, as part of the unauthorized use of Quantum3D products with the Royal Thai Air Force.
• September 10, 2004: MENG met with members of the Chinese Air Force about the DVG technology, as part of the unauthorized use of Quantum3D products with government agencies in China.
• September 15, 2004: MENG installed a DVG demonstration unit on a PRC Navy site, as part of the unauthorized use of Quantum3D products with government agencies in China, including Beijing Lantian Aviation Simulation Technology Company, a subsidiary of China Aviation Industry Corporation, the Navy Research Center of China, and the Shenzhen Land Management Bureau.
• October 21, 2004: MENG asked a person to take back the DVG demonstration system from China’s Navy Research Center, as part of the unauthorized use of Quantum3D products with government agencies in China.
• November 23, 2004: MENG sent an email to a person that he met with and discussed the installation of a DVG, 3 channel demo at Blue Sky, believed to be BASC/AVIC I, as part of the unauthorized use of Quantum3D products with government agencies in China, including Beijing Lantian Aviation Simulation Technology Company, a subsidiary of China Aviation Industry Corporation.
• December 22, 2004 to January 2, 2005: MENG, directed another person unknown to the Grand Jury, to delete approximately 966 emails from MENG’s email account at smeng_cn@yahoo.com.cn.
I will never hire a Chinese person in my company for any position. Especially R&D.
Is the US Government finally admitting that China should be considered a hostile nation?
He probably got his clearance from Clinton!!
Are US companies so hard up for qualified employees they have to hire foreigners?
IIRC there are lots of green card scientists working at nuclear labs.
Wasn't there something similar at Livermore Labs in N Mexico last year?
There ought to be a law.
Just great.
I hope someone is keeping watch that he's not on a slow boat to China.
Leni
You're probably right on that !!!
Bump for later
Hang this Meng spy and Sandy Burglar simultaneously -- with opposite ends of the same rope!
Where was BJ at the time of the theft?
As Seen On TV!
Yet another manifestation of "Our Strength!"
The reason why most US companies hire foreigners is because they are most likely used to live in poverty unlike their american counterparts who take everything for granted.
Most of these foreigners don't join unions and don't care if they get benefits, they are just thankful that they have a roof over their head, food on their table and a source of income, unlike the locals who think joining a union and earning benefits that amount to half a years wage is a right.
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