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Chinese-Canadian pleads guilty to espionage in US

SPY CENTRAL Silicon Valley is a hotbed for trade-secret thefts motivated by the desire to fuel military and technological advances in countries such as China


A Chinese-Canadian engineer in California pleaded guilty to stealing military training software and trying to sell it to the Chinese Navy, becoming only the third person to be convicted on the rare charge of economic espionage, prosecutors said on Thursday.

Sheldon Meng Xiaodong (孟曉東), 42, pleaded guilty in San Jose federal court on Wednesday to one count of economic espionage for trying to sell stolen software to China's Navy Research Center, and one count of violating US arms control regulations for illegally exporting software used to train military fighter pilots, the US Attorney's Office said.

Meng is a Chinese national with Canadian citizenship who currently lives in Cupertino, about 72km south of San Francisco.

Under the terms of the plea agreement, he faces a reduced sentence of up to two years in prison and a US$1.5 million fine.

Sentencing was set for Jan. 23. Meng is currently free in lieu of US$500,000 bond.

Meng was indicted in December on 36 felony counts alleging he stole code for software made by his former employer, San Jose-based Quantum3D Inc, and attempting to sell it to the Royal Thai Air Force, the Royal Malaysian Air Force and the Navy Research Center in China.

Authorities have declined to say whether any of the secrets were successfully sold, or if any foreign officials knew about the scheme.

The indictment was only the third time prosecutors have charged someone with economic espionage, the most serious crime under the Economic Espionage Act of 1996. It alleges the theft of trade secrets with the intent to benefit a foreign government.

Authorities say Silicon Valley is a hotbed for trade-secret thefts motivated by the desire to fuel technological and military development in countries like China and Iran. However, the charge of economic espionage is hard to prove, and many defendants are charged with the lesser offense of theft of trade secrets.

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