DOD Analyst Convicted for Selling Information to China

Despite a lot of official denials, it seems pretty clear the Chinese have no qualms about stealing as much intellectual property as they can get their hands on.

On Friday, the Department of Justice announced that one Gregg William Bergersen of Alexandria, Virginia was sentenced to 57 months in prison (plus three years of supervised release) for disclosing secret information to a naturalized American citizen of Chinese descent (Tai Shen Kuo), who was then providing it to the People's Republic of China.

In his day job, Gregg Bergersen was a Department of Defense Analyst.

Kuo provided Bergersen with gifts, cash payments, dinners and gambling money in exchange for the information. The information involving military sales to Taiwan was then passed to Kuo's handler, an official of the People's Republic of China.

The official DOJ press release states that Bergersen didn't know the information was going to China. It would be interesting to discover, who he thought it was going to?

Kuo, who was found guilty on May 13th, is currently awaiting sentencing on August 8th and faces life in prison.

On May 28th, Yu Xin Kang, also of New Orleans pleaded guilty to aiding and abetting an unregistered agent of the People's Republic of China. According to court documents, Kang sometimes assisted Kuo in providing the stolen information to the unnamed foreign official. Kang faces ten years in prison.

Last year, another naturalized American citizen of Chinese descent, Chi Mak, was convicted of selling sensitive defense technology to China. This case was a family affair and Mak's sister in law and brother were caught by the FBI trying to board a plane to China with three encrypted CD's containing the stolen information.

The FBI site covered the Bergersen/Kuo case and another one involving a Boeing engineer, Dongfan “Greg” Chung, in a recent press release. Allegedly Chung was tied into the Mak case and sold information on the Space Shuttle and military aircraft to the People's Republic of China.

Although, the government isn't commenting much there is speculation that they are investigating information being stolen from Commerce Secretary Carlos M. Gutierrez's laptop during a recent visit to China. It is alleged that this information was used to hack into government computers.

Hacking incidents traced to the Chinese, although always denied by the PRC, have been reported all over North America, Europe and even Asia. A good place to learn about Chinese hacking activity is a site (maintained by a former DOD official) called The Dark Visitor (Information on Chinese Hacking) .

The Chinese are also suspected (in a lot of instances) of stealing corporate information. According to sources within the technology industry, it isn't recommended to carry laptops or other personal data storage devices when travelling in China.

On a personal note, I believe a lot of this is enabled by our free trade agreement with the People's Republic of China. While this agreement is lucrative for a few corporate entities -- the wholesale theft of intellectual property, counterfeiting, unsafe and defective products, as well as, all the human rights violations in China call for taking a hard and educated look at what is going on.

The problem is will special interests -- who represent the corporate entities making a lot of money from this -- prevent our leadership in Washington from taking effective action against what is becoming an alarming issue?

If you suspect anyone of selling government secrets, you can report them to the FBI by submitting an anonymous tip online.

Chinese Hacker(s?) steal data on 18 million people in South Korea

Data breaches aren't just a problem in North America and Western Europe. In fact, it's probably safe to say that that the problem has become International in nature.

In the era of the global economy and with outsourcing, saavy hackers can probably get their hands on North American and European information outside those geographical areas fairly easily. IT is (also) probably less likely that anyone will be forced to be transparent about a data compromise in many of the areas information is currently being outsourced to.

That isn't to say that everything is 100 percent transparent when a data compromise occurs in the West, either.

Found this interesting blog post on The Dark Visitor (Inside the World of Chinese Hackers):

According to Hackbase.com, South Korea’s oldest and largest online shopping site (Auction.co.kr) has claimed it was attacked by a Chinese hacker who made off with the user information on 18 million members and a large amount of financial data. It is further claimed that Auction.co.kr delayed 20 hours after the attack before confirming the loss of information. Korean users rebuked the website for being too slow to act. It was confirmed that the attack was launched through China’s internet.

The post speculates (probably very accurately) that the site was compromised by phishing the staff at Hackbase.com (interesting name), who more than likely gave up their log on credentials to the hacker. This is normally accomplished by dropping malicious software containing a keylogger that steals all sorts of personal information from a compromised system. The same thing often occurs with social engineering techniques, where someone is tricked into giving up information they shouldn't have.

It is amazing how many employees fall for phishing attempts. I recently pointed to examples of this in North America, where the IRS and the employees of a Nuclear facility were successfully phished.

There is no doubt that part of any internal due diligence process should include training employees on social engineering, spam and phishing.

Full post from the Dark Visitor (interesting site), here.

Here are two posts, I recently did about employees getting phished for information:

Human beings are the reason for most security breaches!

IRS audit reveals that the human factor is one the greatest threats to information (computer) security