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United States charges Chinese man with espionage for passing source code to China

By Martin Smith

WASHINGTON, June 15 (UPI) -- A Chinese national has been charged by the U.S. Department of Justice with six counts of "economic espionage and theft of trade secrets."

Xu Jiaqiang, 30, was arrested last December by the FBI, and is said to have passed secrets on to the Chinese government.

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Federal investigators allege that Xu stole the "proprietary source code" of software from his former employer, "with the intent to benefit the National Health and Family Planning Commission of the People's Republic of China."

The source code was a clustered file system -- or one that helps a computer's performance "by coordinating work among multiple servers."

It has been described as "a product of decades of work."

"Xu allegedly stole proprietary information from his former employer for his own profit and the benefit of the Chinese government," said Assistant Attorney General for National Security John P. Carlin of the Southern District of New York, in a statement issued Tuesday.

"Those who steal America's trade secrets for the benefit of foreign nations pose a threat to our economic and national security interests. The National Security Division will continue to work tirelessly to identify, pursue and prosecute any individual who attempts to harm American businesses by robbing them of their valuable intellectual property."

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The DOJ has not identified the U.S. company Xu worked for, but it has been widely reported that it was IBM. The U.S. Attorney's office said Xu was a developer for "a particular U.S. company" from November 2010 to May 2014.

The company has not commented.

Chinese President Xi Jinping insisted last year that Beijing does not encourage or support state-backed hacking and theft of secrets.

Investigators were on to Xu several months before his arrest. Two undercover agents reportedly met him several times at a White Plains, N.Y., hotel, posing as a financial investor trying to start a data-storage technology company and as a project manager working for the would-be investor.

If Xu is found guilty, each of the three counts of espionage carry a maximum 15 years in prison. The three counts of theft of a trade secret each carry a maximum sentence of 10 years in prison.

He is scheduled to be arraigned Thursday.

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