Feds: 2 sought China cash for stolen chip

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WASHINGTON, Sept. 27 (UPI) -- Two California men accused of stealing trade secrets about computer chips now face new charges that they sought funding from the Chinese military.

U.S. citizen Lan Lee and Chinese national Yuefei Ge face a federal indictment charging two counts of economic espionage and one of conspiracy -- in addition to charges they have faced since their arrest last June of stealing computer-chip designs and development plans.

The superseding indictment was announced Thursday by Scott Schools, the U.S. attorney for the Northern District of California.

Last June the men were charged with conspiring to steal trade secrets from their employer, NetLogics Microsystems, and another company, Taiwan Semiconductor Manufacturing Corp. Prosecutors said they created a front company, SICO Microsystems Inc., “for the purpose of developing and marketing products derived from and using the stolen trade secrets.”

Thursday they revealed that the two men tried to get venture capital funding for their company from the Chinese government, through the so-called 863 Program, and specifically from the military, through its General Armaments Division.

The indictment states the 863 Program “is a funding plan created and operated by the government of the People’s Republic of China, or PRC … (and) designed by leading PRC scientists to develop and encourage the creation of technology … with an emphasis on military applications.”

The General Armaments Department of the People’s Liberation Army alleges the indictment “oversaw the development of weapons systems used by the PRC. The GAD had a regular role in, and was a major user of, the 863 program.”

Prosecutors say the men applied to both places for funding, a violation of federal economic espionage statutes.