Chinese citizen admits stealing US trade secrets for next-generation national security tech

Fox News

3 days ago

A dual U.S.-Chinese citizen formerly employed as an engineer at a Southern California company has admitted to stealing U.S. trade secrets for next-generation national security technology.
Though Chenguang Gong, 59, of San Jose, pleaded guilty to one count of theft of trade secrets, he remains free on a $1.75 million bond, according to the Justice Department.
U.S. District Judge John F. Walter scheduled sentencing for Sept. 29. Prosecutors said Gong faces a statutory maximum penalty of 10 years in prison.
According to his plea agreement, Gong transferred more than 3,600 files from a Los Angeles-area research and development company where he worked, to personal storage devices during his brief tenure with the company last year.
Federal prosecutors said the files Gong transferred include blueprints for sophisticated infrared sensors designed for use in space-based systems to detect nuclear missile launches and track ballistic and hypersonic missiles. Other files were said to have included blueprints for sensors designed to enable U.S. military aircraft to detect incoming, heat-seeking missiles and take countermeasures, including by jamming the missiles' infrared tracking ability.
"These files describe the methods, designs, techniques, processes, specifications, testing, and manufacture of these technologies and would be extremely damaging economically if obtained by the Victim Company's competitors, and would be dangerous to U.S. national security if obtained by international actors," the complaint says.
The "intended economic loss" from Gong's criminal conduct exceeds $3.5 million, according to the plea agreement.
Court documents note that much of the Malibu-based company's work is funded through contracts with the U.S. Department of Defense and other U.S. government contractors.
Gong was hired by the company in January 2023 as an application-specific integrated circuit design manager responsible for the design, development and verification of its infrared sensors. From approximately March 30 that year until his termination on April 26, 2023, Gong allegedly transferred thousands of files from his work laptop to three personal storage devices. That included more than 1,800 files after he had accepted a job at one of the company's main competitors, prosecutors said.
Prosecutors said many of the files Gong transferred contained proprietary and trade-secret information related to the development and design of a readout integrated circuit that allows space-based systems to detect missile launches and track ballistic and hypersonic missiles and a readout integrated circuit that allows aircraft to track incoming threats in low-visibility environments.
Gong also allegedly transferred files containing trade secrets relating to the development of "next generation" sensors capable of detecting low-observable targets while demonstrating increased survivability in space, as well as the blueprints for the mechanical assemblies used to house and cryogenically cool the company's sensors. That information was among the company's most important trade secrets and is worth hundreds of millions of dollars, according to the DOJ.
Many of the files had warnings in bold letters that the information was proprietary, export-controlled and for "official use only."
The FBI executed a search warrant on May 8, 2023 at Gong's temporary residence in Thousand Oaks, California, and also searched his vehicle and his person. Law enforcement recovered multiple digital devices belonging to Gong, some of which contained the company's propriety files. The complaint says the FBI, however, did not locate two hard drives Gong used to exfiltrate the company's trade secret and proprietary information, "and the whereabouts of those drives to date remains unknown."
Prosecutors said Gong repeatedly denied processing those hard drives or knowing where they were located in May 2023 interviews with the FBI. Gong was arrested on federal charges on Feb. 7, 2024, but was later released on bond.
Court documents say Gong first entered the United States in or around 1993 and became a U.S. citizen in 2011. His resume states that he earned a Master of Science Degree in Electrical Engineering from Clemson University and completed some PhD work at Stanford University, according to the complaint.
Law enforcement also said Gong applied to "Talent Programs" administered by the People's Republic of China while he was employed at several major technology companies in the U.S. between approximately 2014 and 2022.
While employed at a U.S. information technology company headquartered in Dallas, Gong in 2014 sent a business proposal to a contact at a high-tech research institute in China focused on both military and civilian products, prosecutors said. In the proposal, Gong described a plan to produce high-performance analog-to-digital converters like those produced by his employer.
In another "Talent Program" application from September 2020, prosecutors said, Gong proposed to develop "low light/night vision" image sensors for use in military night vision goggles and civilian applications. Gong's proposal included a video presentation that contained the model number of a sensor developed by an international defense, aerospace, and security company where Gong worked from 2015 to 2019, according to the DOJ.
Authorities said Gong traveled to China several times to seek "Talent Program" funding in order to develop sophisticated analog-to-digital converters. The Justice Department cited a 2019 email translated from Chinese in which Gong remarked that he "took a risk" by traveling to China to participate in the Talent Programs because he worked for "an American military industry company" and thought he could "do something" to contribute to China's "high-end military integrated circuits."