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.

ICE raid nets 49 illegal security guards in Texas

Looks like the folks at ICE have been busy in Texas going after illegal security providers, some of whom, apparently were armed.

Jason Trahan at the Dallas Morning News reports:

A task force led by U.S. Immigration and Customs Enforcement raided more than two dozen mostly Latino night clubs, restaurants, pool halls and other businesses Saturday night, arresting 49 undocumented immigrants employed as security guards, officials said.

All of those arrested work for two local security companies, which authorities declined to identify Sunday.

The investigation into these security guard providers might be ongoing because in Texas, as in most States, security services are a regulated business for which a license must be obtained.

According to the Texas Department of Public Safety:

Under state law, commissioned security officers must successfully complete a 30-hour school. Once the course is completed, commissioned officers must wear a specific uniform indicating the company by whom they are employed while carrying their weapons.

Applicants for licensing or registration by the Private Security Bureau must have undergone a fingerprint-based state and national criminal history check. Applicants who have been convicted of a felony or a Class A misdemeanor cannot be considered for a license for 20 years. Applicants convicted of a Class B misdemeanor can apply for consideration after 5 years. Some Class B misdemeanors, such as first-time DWI, do not disqualify an applicant from receiving a license or application.

Maybe this is why -- despite the lack of official commentary on the matter -- Craig Watkins the Dallas County District Attorney stated:

Hopefully, this operation will help us send a message that we will not tolerate the falsification of documents for undocumented aliens under the guise of providing security.

Counterfeit documents are a huge problem and enable a lot of illegally placed individuals to obtain employment that they would otherwise be barred from. Given that they are easily available, they are a gateway for all kinds of other criminal activity, also.

This isn't the first time, a story has broken, where counterfeit documents allowed people using an unverified or even someone else's identity to perform duties they never should have been able to.

Although a few miles from Dallas, in November, James Slack of the Daily Mail revealed that 5,000 illegal immigrants were working as security guards in some of the United Kingdom's most sensitive buildings.

In January of 2007, the Herald Tribune reported that 40 illegal immigrants were arrested on military bases by ICE. The same story referenced an earlier story, where 60 illegal immigrants were arrested at Fort Bragg, North Carolina, home of the 82nd Airborne Division and Special Operations Units.

Earlier this month, Neville W. Cramer wrote in Today's Facility Manager about the growing problem from a facility management perspective:

While there are a multitude of economic and social issues surrounding the millions of illegal aliens currently in the U.S., two issues should be of specific concern to facility managers (fms). The first is security, and the second is comprehensive immigration reform. Since the latter is currently hung up in Congress, this article will examine security first.

Federal, state, and municipal law enforcement agencies are well aware that some of the largest employers of illegal aliens are directly and peripherally involved in building services and maintenance. Whether it is the cleaning crews, the janitors, the trash removal workers, or the security guards, illegal immigrants make up a significant portion of the workforce.

While this recent event in Dallas highlights the illegal immigration problem from the South -- there are illegal immigrants from other parts of the World working as security guards -- who likely have been planted in facilities or organizations for the purposes of stealing information.

From the Today's Facility article:

For instance, organized criminals from West Africa (Nigeria, Ghana, Sierra Leone, etc.) are now firmly entrenched nationwide in the security guard business. They are usually educated, well mannered men and women who are willing to work weekends and midnight shifts.

Unfortunately, what is not widely known is that “while guarding the henhouse,” many of these contracted security workers are suspected of stealing employee and customer identity data and company proprietary information. In some instances, these guards are using multiple fraudulent identities themselves, making it almost impossible for law enforcement to catch up with them. Fms should be aware of these emerging trends and, along with law enforcement and security professionals, take whatever steps are necessary to mitigate their risks.

The article sums up it's thoughts with the well known fact that the current Employment Eligibility Employment Verification Form (1-9) is woefully inadequate, especially with all the stolen identities and counterfeit documents that are easily obtained, just about anywhere.

Even with no match SSN legislation forthcoming -- which will require social security numbers to match a name -- the system will probably still be manipulated. There is a lot of stolen information out there, which contains both names and social security numbers, already. The groups counterfeiting documents will just have to make sure everything matches.

This is likely to cause an explosion in the number of identity theft cases, which is already a growing problem.

This legislation, which has been held up by a Federal Judge in San Francisco at the behest of the ACLU and other groups, appears to be poised to be enacted in the near-term. Arizona, which has the highest rate of identity theft in the nation, has already enacted a similar law.

Dallas Morning News story, here.

Well written and informative article by Neville W. Cramer, here.

If you want to learn more about the easy availability of counterfeit documents and how they are being dispensed throughout the U.S. (and probably the World) by organized criminal gangs, I recommend going to Suad Leija's Paper Weapons site. The information on this site has been covered extensively by the mainstream media and is likely being used by government entities to discover the full scope of this scary problem.

U.S. China Commission Report reveals serious issues that need to be dealt with!

Reports of the Chinese hacking into government systems are nothing new. Along with the constant reports of substandard products being put on our shelves, there is little doubt that the Chinese pose a threat to our safety in a LOT of different ways.

The U.S. China Commission has just released a disturbing report, which indicates some alarming evidence that the Chinese might be a threat to our National security.

The first concern is what appears to be a growing capability to target satellites. I got the following directly from the report, which was provided to Congress:

The hearing was timely, coming only three months after a successful direct-ascent anti satellite test by China that destroyed one of its own aging weather satellites in low-earth orbit. This test was only the third of its kind by any nation in history and served as a useful reference point during the hearing to illustrate not only China’s advances in military capabilities, but also the extent to which China’s decision making process is still very much opaque. This incident raises questions about Chinese intentions in space. The Commission will address these questions as it continues to monitor developments.

In the same realm, it appears that China is actively developing capabilities to conduct "irregular warfare." It should be noted that in addition to this report there have been regular reports of hackers from China specifically targeting government systems.

This is what the current report concluded:

Several experts testified that if China were to find itself in an armed conflict with the United States and its allies such as that resulting from a Taiwan dispute, China is likely to employ an array of irregular warfare strategies against its adversaries. According to Michael Vickers, Senior Vice President for Strategic Studies at the Center for Strategic and Budgetary Assessments, a Chinese attack on Taiwan could entail special operations and cyber attacks on U.S. regional bases in Japan and South Korea, and might even include cyber attacks on the U.S. homeland that target the U.S. financial, economic, energy, and communications infrastructure.

Also covered in the report are previously documented cyber-intrusions into U.S. Government systems:

As evidenced by the trajectory of its military modernization, Chinese defense planners are seeking to accomplish the goal of undermining the U.S. military’s technological edgethrough a variety of disruptive means. Among these is cyber warfare. USSTRATCOM Commander General Cartwright testified before the Commission that China is actively engaging in cyber reconnaissance by probing the computer networks of U.S. government agencies as well as private companies. The data collected from these computer reconnaissance campaigns can be used for myriad purposes, including identifying weak points in the networks, understanding how leaders in the United States think, discovering the communication patterns of American government agencies and private companies, and attaining valuable information stored throughout the networks. General Cartwright testified that this information is akin to that which in times past had to be gathered by human intelligence over a much longer period of time. He went on to say that in today’s information environment, the exfiltration that once took years can be accomplished in a matter of minutes in one download session.

The report also concludes that the Chinese have been building up their more traditional military capabilities since 1992.

Going into the reasons why China has been able to accomplish this, the report states:

China’s policies of market liberalization have resulted in rapid export-led economic growth prompting increased foreign investment; development of China’s manufacturing capabilities; and integration into the global supply chain. China’s abundant and inexpensive labor supply has made that country an obvious place for multinational companies to expand their production. However, as Dr. Peter Navarro, Professor of Business at the University of California, Irvine, observed in his testimony, five of eight factors identified as major drivers of China’s comparative advantage—i.e., its ability to undercut the prices of global competitors—are considered unfair trading practices. These include its undervalued currency, counterfeiting and piracy, export industry subsidies, and lax health, safety, and environmental regulations. These practices violate China’s WTO commitments, especially regarding workers’ rights, market access, currency manipulation, subsidies, and the protection of intellectual property rights. These violations and unfair practices also contribute to a growing U.S. trade deficit with China, one that U.S. Census Bureau statistics confirm increased 177 percent in the past six years from $83.8 billion in 2000 to $232.5 billion in 2006.

Granting China a "Permanent Normal Trading Relationship" six years ago was sold to the American public as a means of making China a better place (more democratic) place for it's people.

Instead, we have seen a lot of questionable government activity, which includes a variety of criminal enterprises when we consider all the hacking, counterfeiting and piracy that can be directly traced back to that country.

The lack of safe manufacturing practices and counterfeiting also poses a threat to our safety. It should be noted that according to International Anticounterfeiting Coalition, counterfeiting is a $600 billion a year problem, worldwide.

There are no figures on how much of this comes from China, although most experts on this subject speculate a lot of it does. Additionally, there is a lot of evidence that a lot of counterfeit merchandise is present in our supply chain. This evidence would include products of a consumable nature such as drugs, also.

The FDA estimates that 10 percent of the drugs in our supply system are counterfeit.

A lot of this probably tied into another phenomenon traced to the Chinese known as corporate (industrial) espionage. Of course, there is probably less of a need for the Chinese to plant spies in our industrial complexes anymore. With the amount of outsourcing going on, they probably never have to set foot out of China to steal a lot of secrets from us.

According to the Washington Post, American companies are even outsourcing the manufacture of military parts:

The Pentagon is increasingly buying planes, weapons and military vehicles from private contractors that outsource the manufacturing to plants in China and elsewhere in Asia, the report said. But when questioned by the commission, defense officials admitted that they do not have the ability to track where the components of military equipment are made.

To me, given all the recent implications of Chinese intentions, this makes the least sense!

All of these factors have led to a loss of jobs within our country as corporations take advantage of cheap labor, which is often the greatest expense in any business.

This translates into record profits for the Chinese and a select few people in the West.

Given the safety, National security and economic implications, continuing down this road doesn't seem to be in the best interests of the average person.

The full report from the U.S. China Commission can be viewed, here.

P2P under Congressional scrutiny - FTC to investigate

Although there are legitimate uses for P2P (peer to peer) software, there is no doubt that there are a lot of dangers to using it, also.

Officially, the concerns are how this exposes people to identity theft -- but this costs the entertainment industry (who probably have a few lobbyists dedicated to this matter) a lot of money when they don't get their royalties (money) on music and videos -- which people download for free using P2P.

Now Congress is asking the Federal Trade Commission to take a deeper look into the matter.

Still worried that peer-to-peer filesharing networks like Lime Wire are causing users to "inadvertently" expose sensitive documents, posing potential security risks, members of Congress are now asking for a formal investigation into the phenomenon.

The latest concern from the House of Representatives Committee on Oversight and Government Reform, judging by a 7-page letter (click for PDF) dated Wednesday to Federal Trade Commission chairwoman Deborah Majoras, appears to be this: Peer-to-peer networks may make unsuspecting consumers vulnerable to identity theft.

The same group of politicians, led by Reps. Henry Waxman (D-Calif.) and Tom Davis (R-Va.), suggested earlier this summer that peer-to-peer networks can pose a "national security" threat by allowing users to expose sensitive information unwittingly. (Some politicians, particularly those with entertainment industries in their districts, also took the opportunity once again to condemn unlawful transfer of copyrighted content via the networks.)

I've written a little about why it isn't a good idea to use some of the P2P networks out there:

Japanese cop exposes confidential information on 6,000 people using P2P (file-sharing) software

How P2P Software like Limewire Compromises Personal and Financial Information

Besides being a potential national security threat and an identity theft venue, most of this software is liable to do a lot of damage to your system. And unless you are pretty technically inclined, you will probably have to spend a little of your hard-earned money to fix the damage it will cause!

CNet news blog story, here.

Operation Paper Tiger - the true story, which reveals why our borders aren't very secure!

(Mohammed Atta of 9/11 infamy used counterfeit documents to get this legitimate Florida Driver's License. Counterfeit documents used to get legitimate ones are known as "feeder documents.")

Border security has become a major concern for all us ever since 9/11 revealed how vulnerable we really are.

Counterfeit documents paved the way for the terrorists in 9/11 to get into our country and cause the terrible event, which has forever changed the way we live.

In 2006, Suad Leija, who was raised as the stepdaughter of the founder of the largest counterfeit documents cartel in the United States began assisting the federal authorities in discovering how widespread this problem has become.

Suad has been able to identity members of the organization, who were previously unknown to law enforcement and provide historical data on the organization dating back to the late eighties.

The story begins with Suad meeting and marrying an American businessman, who runs businesses in Mexico and Central America.

Although, this part of the story still isn't completely clear, her husband turned out to be a little more than a person operating businesses in foreign lands.

Saud discovered her husband was trying to gather intelligence on suspected terrorists the cartel had supplied with counterfeit documents. The information he was interested in was contained in an extensive database of the cartel's business dealings.

Upon this discovery, Suad had to make a hard choice. The choice was between her family, or her husband and the United States.

After her husband described the terrorist threat -- comparing it to the violent drug gangs operating in Mexico, she chose to support him -- and ultimately the United States of America.

There is an excellent description of how this occurred in a La Raza article, which has been translated into English on the Paper Weapons site, here.

I found it interesting that La Raza was covering this story, given their political agenda. La Raza isn't the only Spanish media outlet covering the story, Saud has been featured on La Opinion and Univision, also. This would indicate to me that a lot of Hispanic Americans are worried about the criminal and possible terrorist implications that counterfeit documents pose to all of us.

Eventually, Suad and her husband fled to the United States and this is where Operation Paper Tiger begins.

Operation Paper Tiger documents the federal investigation into the widespread use of counterfeit documents in the United States, which are available to anyone, who can come up with the money to pay for them. It also reveals how these documents, which are produced in large numbers, aren't very expensive, either.

The book introduces a term (Paper Weapons), which might unfamiliar to the general public:

Counterfeit documents are Paper Weapons. The first weapon a terrorist needs to "FIT IN" in the United States is a document. Once he has this weapon and cover he can then go about his business of causing great harm to the United States and its citizens.

Here is a description of the cartel and their scope of operations:

The Castorena Leija-Sanchez crime organization is the major supplier of counterfeit documents/paper weapons in the United States. They are Mexico based and have been operating in the United States for 17 years. They are in every major American city and earn approx.300 million dollars per year. They also deal in narcotics and human smuggling. They are the new silent terrorist. Just about every illegal immigrant has purchased documents or knows some one who has from this organization. This book will go into the history, organization in Mexico and the United States, money laundering, illegal document manufacturing, human smuggling and murder.

Counterfeit documents are easily purchased in most major U.S. cities. Most of us have been led to believe that they are used by illegal immigrants, who are trying to make a better life for themselves.

While this is partially true, these documents are also used by criminals to commit a lot of different crimes and have been used by terrorists to blend into our society. The book is able to substantiate this with factual information from government sources, as well as, information revealed during Operation Paper Tiger.

If you were to consider the criminal activity alone, it would include narcotics, white slavery, and a host of financial crimes. More violent crimes result out of these so-called lesser crimes, also.

In fact, Suad once asked her grandfather if the family would sell documents to terrorists. His reply was chilling, “terrorism is an American problem, not a Mexican one.”

The novel includes actual transcripts of wiretaps, revealing a lot of criminal activity, including a pretty gruesome description of a murder within the cartel.

Also revealed are some amusing blunders made by members of the cartel and how the business of counterfeiting documents is set up much like any other successful organization.

It even shows how inmates in prison are serving their sentences under assumed identities.

Operation Paper Tiger shows how these documents are enabling benefits fraud and points out that most of the people, who immigrate here are poor and need assistance. In other words, it shows how the American taxpayer is picking up the cost for all this.

Benefits fraud is another growing problem. In 2006, Los Angeles was losing an estimated $1.5 billion dollars to benefits fraud.

Also revealed is how the recently defeated amnesty legislation wouldn't have done much to stop the flow of illegal immigrants across our Southern border. Quoting the book, itself:

Border Patrol agents have found fraudulent utility bills -- dating back more than five years, and thus proving residency under the Senate's bill --in the possession of those illegally crossing the border into the United States. Many of the immigrants with the documents had never visited or lived in the country, said one Border Patrol agent who requested anonymity.

This fact is substantiated in the wiretaps, which are available in the book.
Quite simply had this legislation passed, counterfeit documents would have made it easy for just about anyone to qualify as having been here for five, or more years.

Given this, it's possible the bill would have caused a rush to our borders by people seeking to get in on the amnesty provision.

If you are interested in knowing the truth about all the criminal activity, which is hidden in illegal immigration, Operation Paper Tiger is a must read.

Suad has paid a price for revealing this information. Her life has been threatened by the cartel and she is forced to remain in hiding. Since she is hiding with the borders of the United States, one has to assume this cartel has a pretty far reach.

Operation Paper Tiger can be bought directly on the Paper Weapons site, here.

Suad has been interviewed extensively by the mainstream media, including Lou Dobbs, Paula Zahn, Fox, CNN, Univision and La Opinion. Many of these stories are linked to the Paper Weapons site.

She has also produced her own set of YouTube videos, which can also be seen on the site.

I highly recommend reading this novel, which reveals Suad's and the government's efforts to keep us out of harm's way!


Pedro Leija-Sanchez serving time in prison under an assumed name.

Previous posts, where Suad is mentioned can be seen, here.

Richard Clarke's Views on Identity Theft

Richard Clarke - former National Security Advisor and Special Advisor to the President on Cyber Security - has opinions on the current identity theft crisis. And although (to some) his opinions are considered controversial - he is no doubt a person with a great deal of experience.

Four leaders of the "free world" have listened to his opinions.

After leaving government service -- he nows heads a private firm (Good Harbor Consulting LLC) -- which consults on security matters, to include identity theft issues.

Jack Kelly of the Pittsburgh Post-Gazette covered Mr. Clarke's speech at Carnegie Mellon University in 2005 and quoted him as saying:

"Identity theft -- which is being conducted more and more by international criminal gangs based in countries where law enforcement is lax -- is primarily a crime problem, but is also a national security problem."

In this speech - - he also covered the fact that obtaining (high-quality) fake identification is easy and that despite all the security at airports -- there is no attempt to verify, whether or not an ID is legitimate.

Link to full article (speech), here.

Clarke also supports "immediate disclosure" when data-breaches occur and spoke of this in an article, where he was interviewed by Dan Briody (published in CIO Insight). In this article, he also aptly points out the problem of data-mining companies.

Link, here.

Not everyone is going to agree with Richard Clarke, but he does seem to have a lot of valid insights into what has become an international problem.

It would be interesting to see what his opinion is on President Bush's Identity Theft Task Force and the direction they are going.

Sometimes people are "controversial" to raise the "awareness" level on an issue. Come to think of it -- from a historical perspective -- there are a lot of famous people, who were considered "controversial," that were later proven correct.