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U.S. charges Chinese hackers and government officials in broad cybercrime campaign

U.S. charges Chinese hackers and government officials in broad cybercrime campaign

NBC News06-03-2025
WASHINGTON — Twelve Chinese nationals — including mercenary hackers, law enforcement officers and employees of a private hacking company — have been charged in connection with global cybercrime campaigns targeting dissidents, news organizations, U.S. agencies and universities, the Justice Department said Wednesday.
A set of criminal cases filed in New York and Washington add new detail to what U.S. officials say is a booming hacking-for-hire ecosystem in China, in which private companies and contractors are paid by the Chinese government to target victims of particular interest to Beijing in an arrangement meant to provide Chinese state security forces cover and deniability.
The indictments come as the U.S. government has warned of an increasingly sophisticated cyber threat from China, such as a hack last year of telecom firms called Salt Typhoon that gave Beijing access to private texts and phone conversations of an unknown number of Americans, including U.S. government officials and prominent public figures.
One indictment charges eight leaders and employees of a private hacking company known as I-Soon with conducting a sweeping array of computer breaches around the world meant to suppress speech, locate dissidents and steal data from victims. Among those charged is Wu Haibo, who founded I-Soon in Shanghai in 2010 and was a member of China's first hacktivist group, Green Army, and who is accused in the indictment of overseeing and directing hacking operations.
Earlier reporting by The Associated Press on leaked documents from I-Soon mainly showed I-Soon was targeting a wide range of governments such as India, Taiwan or Mongolia, but little on the United States.
But the indictment contains new revelations about I-Soon's activities targeting a wide range of Chinese dissidents, religious organizations and media outlets based in the U.S., including a newspaper identified as publishing news related to China and opposed to the Chinese Communist Party. Other targets included individual critics of China living in the U.S., the Defense Intelligence Agency and a research university.
The intended targets were in some cases directed by China's Ministry of Public Security — two law enforcement officers were charged with tasking certain assignments — but in other instances the hackers acted at their own initiative and tried to sell the stolen information to the government afterward, the indictment says.
The company charged the Chinese government the equivalent of between approximately $10,000 and $75,000 for each email inbox it successfully hacked, officials said.
Phone numbers listed for I-Soon on a Chinese corporate registry rang unanswered, and I-Soon representatives did not immediately respond to an AP email requesting comment.
A spokesperson for the Chinese Embassy in Washington, Liu Pengyu, suggested Wednesday that the allegations were a 'smear' and said, 'We hope that relevant parties will adopt a professional and responsible attitude and base their characterization of cyber incidents on sufficient evidence rather than groundless speculation and accusations.'
A separate indictment charges two other Chinese hackers, identified as Yin Kecheng and Zhou Shuai, in a for-profit hacking campaign that targeted victims including U.S. technology companies, think tanks, defense contractors and health care systems. Among the targets was the U.S. Treasury Department, which disclosed a breach by Chinese actors late last year in what it called a 'major cybersecurity incident.'
The Treasury Department announced sanctions Wednesday in connection with the hacking, and the State Department announced multimillion-dollar rewards for information about the defendants.
I-Soon is part of a sprawling industry in China, documented in an AP investigation last year, of private hacking contractors that steal data from other countries to sell to the Chinese authorities.
Over the past two decades, Chinese state security's demand for overseas intelligence has soared, giving rise to a vast network of these private hackers-for-hire companies that have infiltrated hundreds of systems outside China.
China's hacking industry rose in the early days of the internet, when Wu and other Chinese hackers declared themselves 'red hackers' — patriots who offered their services to the Chinese Communist Party, in contrast to the anti-establishment ethos popular among many coders.
The indictment 'proved the close ties and interaction among China's first generation patriotic hackers,' said Mei Danowski, a cybersecurity analyst who wrote about I-Soon on her blog, Natto Thoughts. They 'all turned to entrepreneurs now — doing businesses with the governments and making profits through other means.'
Since I-Soon documents were leaked online last year, the company has been suffering but is still in operation, according to Chinese corporate records. They've downsized and moved offices.
'Apparently i-SOON companies have been struggling to survive,' Danowski wrote on her blog. 'To Chinese state agencies, a company like i-SOON is disposable.'
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However, after an audit of the results, the US-based Carter Center, which monitors overseas elections, supported the outcome, as did the US state department. Riding its success in Venezuela, Smartmatic tried to enter the US elections market in 2006 by using money from the Venezuela contract to buy the California-based Sequoia Voting Systems, whose voting systems were used across the US. The purchase caught the attention of the Committee on Foreign Investment in the United States, which launched an investigation into Smartmatic's ownership and possible ties to the Venezuelan government. But rather than cooperate with the federal inquiry, Smartmatic quickly sold off Sequoia. The company then turned to Europe and other election markets, moving its headquarters to the UK in 2012. It won a contract worth more than $180m to supply the Philippines with more than 90,000 voting machines for its 2016 elections, with Jarltech International on board to manufacture the machines. But the company became embroiled in more controversy almost immediately after the election when Philippine authorities charged the head of Smartmatic's technical support team and two subordinates with accessing a system on election night used to transmit unofficial results and making an unauthorized change to code. The case was later dismissed. Two years after the Philippines election, Smartmatic won the Los Angeles contract. Smartmatic hoped to parlay this win to expand across the US. But after its machines were used for the first time in the 2020 presidential primary and general election, Donald Trump, who lost the election, falsely accused Smartmatic and Dominion Voting Systems of manipulating the results to give the election to Joe Biden. These claims were amplified by Fox News and other media outlets sympathetic to Trump, and in 2021, Smartmatic filed a series of defamation lawsuits against media outlets and Trump supporters who they say encouraged and amplified the vote-rigging assertions, including a $2.7bn defamation suit against Fox News. Smartmatic claims Fox News reporting decimated its US business prospects, causing other election jurisdictions to shun it. But Fox News says it simply covered newsworthy claims made by Trump and others. Last year Smartmatic settled a similar suit against Newsmax for $40m and against One America News for an undisclosed sum and seemed to be on path to win or settle the Fox News suit as well until the indictment of its executives. Fox News has used the indictments and alleged bribery scheme to support its defense in the defamation suit, saying in court documents that if the company has had trouble expanding its business in the US, it's due to these allegations and the company's troubled history, not Fox News reporting. Prosecutors from the southern district of Florida allege that the three Smartmatic executives and Jarltech owner Andy Wang engaged in a years-long conspiracy to overcharge the Philippines government for voting machines, then used the fraudulently obtained funds to pay more than $1m in kickbacks to Juan Andres Bautista – chair of the Philippine elections commission at the time – to win and retain a contract to supply systems for the 2016 elections there. Jarltech allegedly overcharged the Philippines government $10-$50 per voting machine in 'extra' or 'rush' fees, amassing about $6m in a slush fund to pay the bribes. Wang allegedly managed the funds in Hong Kong bank accounts, and Smartmatic executives directed the payments, using bogus purchasing agreements, shell companies and banks in Europe, Asia and the US. Bautista passed the money to a family member who then bought a condo in San Francisco, prosecutors say. Wang did not respond to questions from the Guardian. The justice department investigation began after Bautista's estranged wife told Philippine authorities in 2017 that her husband had $20m in 'unexplained wealth' and provided them with 35 passbooks for offshore bank accounts in Bautista's name. Bautista resigned as chair of the election commission two months later, and in 2023, news broke that the justice department had filed charges against him and was investigating unnamed Smartmatic executives as well. But the scheme didn't start with the Philippines. Prosecutors say the conspirators had also inflated the cost of voting machines sold to Venezuela to amass $4m for bribes paid to unnamed Venezuelan officials between 2012 and 2014 , showing a pattern of illegal activity. In 2019, prosecutors say Piñate also transferred ownership of an upscale home in Caracas to Tibisay Lucena Ramírez, then president of the Venezuelan National Electoral Council, to secure her assistance with its business interests in that country. A Smartmatic spokesperson calls the house claim 'untethered from reality'. She says Smartmatic 'ceased all operations in Venezuela in August 2017 after blowing the whistle on the government and has never sought to secure business there again'. In 2017, Smartmatic accused the Venezuelan electoral council and the Nicolás Maduro regime of manipulating voter turnout numbers and election results and ceased business in the country. But prosecutors say Piñate hoped to repair the relationship with Venezuela with Ramírez's help and gave her the Caracas home as a bribe. Ramírez died in 2023. The federal case against Smartmatic executives and the company's lawsuit against Fox News have now become intertwined due to the new allegations about the LA county money and questions about whether the executives used bribes to win favor around the county contract. Fox News says in its recent filing against LA county that it 'does not yet have evidence that slush fund payments or real estate title transfers were made to any L.A. County official', but it says that gifts Logan received from the company follow 'patterns of misconduct' that prosecutors have alleged occurred in other countries, and that Logan cultivated an unusually close relationship with Smartmatic executives that went 'well beyond typical business relationships.' Logan took a nine-day trip to the Maldives and Taiwan in July 2019 that was partially funded by Smartmatic, including business-class air fare, accommodations and meals, according to text messages obtained by Fox News and included in its court filing. The Maldives portion was covered by an organization that invited Logan to speak there, but Smartmatic paid for Logan's travel to Taiwan. Based on another text message not included in the court filing but seen by the Guardian, Smartmatic played a role in coordinating the conference invitation to Logan as well. Logan's wife accompanied him on the trip, but the text messages indicate he gave his credit card number to Smartmatic to cover her $5,000 air fare. Logan and his wife tacked on tourist activity to the Taiwan portion of their trip, and it's not clear how much Smartmatic paid for the entire excursion. Under California Fair Political Practices Commission regulations, gifts to state and local officials from a single source were limited to $500 a year when Logan took the trip. Smartmatic would not say how much it paid for the Taiwan trip, citing ongoing litigation. An LA county spokesperson said in an email that the Taiwan trip was not a gift but a work trip to conduct oversight of the manufacturing process – the trip included a visit to Jarltech, the subcontractor that was making the hardware for LA county's machines. The spokesperson wrote: 'the lead from the County's VSAP design contractor was also part of the trip, which included detailed reviews and presentations of products that required approval prior to manufacturing, and onsite visits to multiple product and manufacturing assembly plants/operations.' Approval of the manufacturing process was required as part of the contract, he says, and 'protocols for notification and approval of the travel were followed and are documented in the responsive records provided [to Fox News]'. Asked why the project manager for the contract, whose job is 'inspecting any and all tasks, deliverables, goods, services, or other work provided by or on behalf of the Contractor' didn't visit the Jarltech facilities instead of Logan, spokesperson Michael Sanchez said that as chief elections official 'Logan had and continues to have clear responsibility for ensuring contract compliance.' Fox News disputes that the travel was covered under the contract, noting that the contract only mentions paying travel expenses if county officials are auditing financial records related to Smartmatic's contract with the county and have to travel outside the county to view the company's financial records. Sanchez says the paragraph addressing travel expenses 'is not limited to the inspection of financial records for a financial audit' but includes travel to 'examine … any pertinent transaction, activity, or record' relating to the contract. In addition to the Taiwan travel, Fox News says Smartmatic paid for an unknown number of meals in upscale restaurants for Logan, at least one of which Logan did not report on annual disclosure form in 2022. In a deposition in the lawsuit Fox has filed against LA county to obtain Logan's records, Logan disputes that he was required to report the meal because he says it was a personal meal with a Smartmatic employee. He also rejects the suggestion that Smartmatic won its contract out of favoritism. 'The contract between Los Angeles County and Smartmatic USA was competitively bid, evaluated, and awarded in compliance with the County's open competitive public procurement processes,' Logan wrote in an email.

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