FBI video: Chinese CEO gets busted on spy charges

In the surveillance video, there’s a lot of nervous laughter before the Chinese CEO and the American executive get down to the serious business that brought them to a bland, Kansas City, Missouri, hotel room: exchanging $30,000 in cash for trade secrets about glass insulation made by Pittsburgh Corning.

The executive, the CEO and his translator all shake hands before the CEO pulls $30,000 in cash from a paper wrapper—a first payment on a total of $100,000 allegedly promised—and the American executive produces a file of documents about the manufacturing process he says are “secret” and “confidential.”

Minutes later, FBI agents knock on the door and, with a gun drawn, arrest the executive and his translator.

Source: Rocket Media Group | YouTube A scene from an FBI produced video called "The Company Man", designed to show how Chinese espionage can operate.

Source: Rocket Media Group | YouTube
A scene from an FBI produced video called “The Company Man”, designed to show how Chinese espionage can operate.

That 2012 surveillance video was released to CNBC by the FBI this week in an effort by the federal law enforcement agency to demonstrate the reality of Chinese corporate espionage against American companies—in a wide range of industries, some so obscure that American executives aren’t aware they’re being targeted by overseas rivals.

The video release is part of a broad FBI awareness campaign beginning Thursday to alert American companies that the trade secrets thefts are becoming more brazen and their targets becoming more broad than ever before. The awareness campaign will consist of briefings for trade associations, social media outreach, and FBI field offices reaching out to companies in their jurisdiction, the FBI says.

Video courtesy of the FBI

On Thursday, officials from the FBI’s counterintelligence division and the national counterintelligence and security center will brief reporters at FBI Headquarters on the extent of the problem.

They’ll also release a slick training video produced by the FBI called “The Company Man,” designed to show how Chinese espionage can operate.

In the short film, hired actors depict a fictionalized version of the real life events in the 2012 surveillance video involving the cloak-and-dagger efforts to obtain glass insulation secrets.

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In the real-life surveillance video, Ji Li Huang, CEO of Ningbo Oriental Crafts Ltd, and his employee Xiao Guang Qi can be seen talking with a Pittsburgh Corning employee they believe has agreed to turn over documents in exchange for cash. In reality, the FBI says, the employee was working with federal law enforcement on the sting.

The FBI says Huang had been relentlessly attempting to get access to the American company’s processes for a long time before the hotel room bust. According to the FBI, Huang first pitched a joint venture with the American firm, and then requested a tour of the company’s factory. Three days after being denied that tour, the FBI says, Huang flew to the plant and took pictures of machinery on site. When employees there turned him away, he showed up again later, each time saying he was lost.

Later, Huang hired a headhunter agency and placed classified print ads in nearby newspapers designed to attract the attention of key talent from the American firm.

Alarmed, the FBI says, the U.S. company approached the FBI, and designated an employee who would respond to Huang’s overtures. That led to a series of events that led to the meeting in the hotel room. The documents that Huang attempted to buy, though, were fake: bogus documents designed to appear real by the FBI.

A federal court ruled that the intended loss to the American company was $7 million, based on the effort required to develop the product.

The FBI says Huang and Qi are back in China, and not able to return to the United States. Huang served 18 months in a California prison, the bureau says, and given a $250,000 fine before being deported. Qi, the junior employee, was fined $20,000 and left the United States.

Lawyers for Huang and Qi declined to comment Wednesday. A spokeswoman for Pittsburgh Corning did not immediately respond to a request for comment.

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