Defense contractor charged with stealing secrets on laptop

A conference badge was the giveaway as a former L-3 Communications employee was arrested returning from China

A former engineer with U.S. military contractor L-3 Communications is facing as much as 20 years in prison on charges that he illegally exported military data to China.

Sixing "Steve" Liu was stopped by U.S. Customs and Border Protection officers on Nov. 29, 2010, after flying back from a speaking engagement at a highly technical nanotechnology conference hosted by local universities and Chinese government officials.

Apparently, border agents' suspicions were aroused when the agents found a conference lanyard in his luggage during a secondary inspection at New Jersey's Newark Liberty International Airport. Liu had said he'd been in China to visit family.

"Customs officers found a folder containing multiple pages of technical language, pictures of military weapons systems, and documents written in Chinese," wrote U.S. Federal Bureau of Investigation Special Agent Lisa Lenches-Marrero, in an affidavit listing the charges against Liu. Border guards also found a laptop. After obtaining a search warrant, federal investigators then discovered hundreds of company documents on Liu's computer, including several that contained technical data on guidance and control systems governed by U.S. arms export control laws.

According to his LinkedIn profile, Liu's area of expertise at L-3 Communications was building very small-scale measurement systems using what's called MEMS (micro-electro-mechanical system) technology. MEMS chips are hot right now: They're what Apple's iPad uses to know how it's being moved around by game-players. Liu was using them to build complex aerospace navigation systems, according to his résumé.

L-3 Communications is the sixth-largest defense contractor in the U.S., according to its website.

Liu had downloaded the data found on his computer without his company's knowledge, was presenting at the conference without permission, and had told a co-worker that he was vacationing in Chicago, court records state.

The U.S. Department of Justice described Liu's presentation at the 4th Annual Workshop on Innovation and Commercialization of Micro & Nanotechnology as a "presentation sponsored by the Chinese government." But according to William Parker, founder of biotechnology company Creative MicroSystems Corp., who spoke at the conference in 2009, the event is a legitimate international forum for international researchers, designed to advance understanding of specific aspects of nanotechnology.

In an interview Tuesday, Parker said he was not familiar with Liu's work but was surprised to hear that he went ahead without company approval. "Usually, you have to get clearance to do a talk like this," he said.

Although much of the material on the conference's website was unavailable Tuesday, a cached Web page indicates that the November 2010 event was sponsored by a number of universities and government and scientific agencies, including China's Ministry of Science and Technology.

Liu had spoken at the conference more than once. He was a co-chairman of the event in 2009 and gave a talk entitled "Micro-Navigator for Spacecraft with MEMS Technology" at that year's event. He had been working for L-3 Communications for about seven months at the time of the 2009 workshop.

L-3 Communications said it had "supported this investigation from the beginning and will continue to cooperate fully with federal authorities," but declined to comment further on the matter.

Liu stopped working for the company the day after he was pulled aside at Liberty airport, according to court records.

He couldn't immediately be reached for comment. He was charged on Friday in United States District Court for the District of New Jersey, but the complaint was not unsealed until Tuesday, the date Liu was set to appear in federal court in Chicago.

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert's e-mail address is robert_mcmillan@idg.com

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Tags U.S. Department of Justiceintellectual propertysecuritylegalIT managementL-3 Communicationscybercrime

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Robert McMillan

IDG News Service
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