Ex-Federal Reserve adviser indicted on charge of economic espionage

Washington Post

31-01-2025

A former senior adviser to the Federal Reserve Board of Governors was arrested Friday and accused of leaking inside information from the Fed to the Chinese government over a period of several years, at one point receiving a $450,000 payment, and then lying about it to Fed investigators.
Economist John Harold Rogers, 63, of Vienna, Virginia, worked in the Division of International Finance of the Fed from 2010 until 2021, according to an indictment unsealed Friday in federal court in the District. Last year, he told a podcaster that he had retired from the Fed in May 2021, approximately a year after he had been questioned by investigators for the Fed's inspector general and allegedly lied about how he accessed and transmitted sensitive information to two unnamed Chinese co-conspirators.
After leaving the Fed, Rogers moved his family to Shanghai and began working as a professor at Fudan University, according to comments he made to the EconVue podcast last year and posted in online biographies. Court records indicated he was arrested in Vienna on Friday and arraigned downtown before U.S. Magistrate Judge Matthew J. Sharbaugh, who ordered him held without bond pending a detention hearing Tuesday. A federal public defender who represented Rogers at the arraignment did not immediately respond to a request for comment.
In the indictment, prosecutors said that Rogers had access to various trade secrets of the Fed, such as briefing books for its governors and spreadsheets that contained proprietary board information. The confidential information could 'allow China to manipulate the U.S. market, in a manner similar to insider trading,' the indictment states. Because of the large amount of U.S. debt held by China, prosecutors argued, gaining advance knowledge of U.S. economic policy, such as knowing of changes to the federal funds rate, 'could provide China with an advantage when selling or buying U.S. bonds or securities,' the indictment states.
Rogers, who has a Ph.D. in economics, reportedly received his first email from a Chinese operative in May 2013, and by the following year Rogers was preparing for an all-expense paid trip to China, according to the indictment. In subsequent years Rogers allegedly made more trips to China, paid by the host, and in 2018 he appeared to begin providing information directly to two people there, prosecutors claim.
Rogers made the trips to China under the guise of teaching economic classes there, the indictment alleges. Meetings in hotels were portrayed as classes, though only one or two people would attend, prosecutors said. The two Chinese co-conspirators 'worked for the intelligence and security apparatus of China,' the indictment states, but posed as graduate students at Shandong University.
Sometimes one of the Chinese conspirators would ask specific questions, and Rogers allegedly would ask his colleagues at the Fed to provide him with data or documents to support his answers. One of the colleagues sent two files to Rogers in 2018 marked 'INTERNAL FR/OFFICIAL USE' that had confidential designations, according to the indictment. Prosecutors said some of the sensitive information came from the Federal Open Market Committee, which determines 'the appropriate stance of monetary policy' in the United States.
In November 2018, Rogers allegedly asked colleagues for a confidential briefing book for Fed governors. One of the colleagues asked that Rogers not use his personal email, but the indictment claims that Rogers then forwarded the book to his personal email account. The book was marked in large type, 'Nonpublic Information FOR YOUR USE ONLY DO NOT DISSEMINATE.'
The exchanges, and Rogers' free trips to China continued into 2019, according to the indictment. Then the inspector general's office interviewed Rogers in February 2020. When an investigator asked Rogers if he ever provided any restricted information to anyone outside the Fed, he replied, 'Never,' according to the indictment.
There is little information about Rogers' interactions with his two co-conspirators after February 2020. In 2022, one of the co-conspirators sent a message to Rogers asking if he and his wife would be interested in traveling to Qingdao and arranging a 'class,' with all expenses paid. By then, Rogers was already living in China, and the indictment doesn't indicate that he responded.
But the indictment notes that Rogers was paid about $448,000 in 2023 for his role as 'a part-time professor at a Chinese university.'
'The Chinese Communist Party has expanded its economic espionage campaign,' said FBI Assistant Director in Charge David Sundberg in a news release, 'to target U.S. government financial policies and trade secrets in an effort to undermine the U.S. and become the sole superpower.' He said the FBI had an 'unwavering commitment to protect U.S. national security interests and U.S. jobs and to bring to justice those who are willing to betray their country for personal gain.'
Rogers is charged with conspiracy to commit economic espionage and making false statements to a federal investigator. The conspiracy charge carries a maximum 15-year prison sentence, though defendants rarely receive maximum sentences in federal court.