Tiger Trap: America's Secret Spy War With China (34 page)

After the six-week trial in Santa Ana, the jury on May 10, 2007, found Chi Mak guilty
of conspiracy to violate the export control laws, acting as an unregistered agent of China, and lying to the FBI.

With Chi Mak convicted, the rest of the family pleaded guilty in rapid succession. In March 2008 Chi Mak was sentenced to twenty-four years in federal prison. His wife, Rebecca, pleaded guilty to acting as an agent of China, received a sentence of three years, and was to be deported afterward. Tai Mak was sentenced to ten years. His wife, Fuk Li, received three years probation, and their son, Billy Mak, was sentenced to time already served. All three were also to be deported after serving their sentences.

Having discovered the link to Boeing and the space shuttle in the search of Chi Mak's residence, the FBI opened an investigation of Dongfan Chung. A native of China, Chung came to the United States in 1962 and was a naturalized US citizen who had worked in the aerospace industry in Southern California for thirty years with a
SECRET
security clearance. Before Boeing, he had been employed by Rockwell International.

Chung was a volunteer spy. Around 1979 he sent a letter to Professor Chen Lung Ku at China's Harbin Institute of Technology. "I don't know what I can do for the country," he wrote. "Having been a Chinese compatriot for over thirty years and being proud of the achievements by the people's efforts for the motherland, I am regretful for not contributing anything.
... I would like to make an effort to contribute to the Four Modernizations of China"—a reference to Deng Xiaoping's 1978 plan to spur economic development in agriculture, industry, technology, and defense.

Chen wrote back in September 1979. "We are all moved by your patriotism.
... Your spirit is an encouragement and driving force to us. We'd like to join our hands together with the overseas compatriots in the endeavor for the construction of our great socialist motherland."

Chung lost no time in sending materials to China, among them twenty-four manuals from Rockwell on the B-1 bomber. In turn, the Chinese sent him elaborate tasking lists, with detailed questions.
Example: "How many types of loaded flights are used for the fatigue test of small fighter planes? When performing loading test, are the sequences of the loading random or are they derived manually?"

Among other topics, the Chinese asked for "aircraft design manuals, fatigue design manuals ... space shuttle design manuals ... the space shuttle's airtight cabin, the space shuttle's heat resistant tile design, life-span ... analysis of U.S. fighter planes and airborne equipment; and S-N curves for fighter plane cabin plexiglass and cabin canopies."

In 1985 Chung was invited to lecture in China, on a trip paid for by the Chinese. Among the topics he said he would discuss was "Space Shuttle Heat Resistant Tiles, Brief Introduction and Stress Analysis." He also planned to lecture on "Fatigue Life" and "F-15 Jet Fighters."

"It's a great honor and I am excited to be able to make some contributions to the four modernizations of the motherland," Chung wrote. He looked forward to a trip "of several weeks to take a good look at the motherland with my own eyes."

Two years later, Gu Weihao, the aviation ministry official, appears to have become Chung's chief contact. "It is your honor and China's fortune
that you are able to realize your wish of dedicating [yourself] to the service of your country," Gu wrote.

The Chinese official asked that Chung "collect information on airplane design for the trunkline and the development of the space shuttle."
Once in Guangzhou, he would be able to meet with Gu and Gu's colleagues in a "small setting, which is very safe."

Perhaps as a cover story for his trip,
Gu suggested, Chung's wife, an artist, could be invited to visit an art institute in China. Chung could then accompany his wife as his reason to visit the PRC. In 2001 Chung again traveled to China to lecture on the space shuttle, and he made two more trips there in 2002 and 2003.

When FBI agents interviewed Chung in 2006 and searched his home in Orange, California, they were astonished to find three hundred thousand pages of Boeing documents
squirreled away in his residence, containing information about the space shuttle, the Delta IV rocket, used to boost unmanned vehicles into space, the F-15 fighter jet, the B-52 bomber, and the Chinook helicopter. Some of the documents were in a crawlspace underneath the house.

On February 11, 2008, Chung was arrested after being indicted on charges of economic espionage, acting as a foreign agent of China, and making false statements to the FBI. After a ten-day bench trial without a jury in July 2009, Chung, then seventy-three, was found guilty by US District Court judge Cormac J. Carney. In a scathing opinion, Judge Carney declared: "Mr. Chung has been an agent of the People's Republic of China ('PRC') for over thirty years. Under the direction and control of the PRC, Mr. Chung misappropriated sensitive aerospace and military information belonging to his employer, the Boeing Company, to assist the PRC in developing its own programs."

The judge minced no words. "As federal agents sifted through the hundreds of thousands of pages of documents in Mr. Chung's home, the story of Mr. Chung's secret life became clear. He was a spy for the PRC."

China's Foreign Ministry released a short statement. "The allegation that a so-called Chinese person stole trade secrets in the United States and gave them to China is purely a fabrication."

Chung was the first person to be convicted in a trial under the Economic Espionage Act of 1996. In February 2010 he was sentenced to fifteen years and eight months in prison.
Judge Carney said he imposed the long sentence because he wanted to send a signal to China to "stop sending your spies here."

Chinese spy cases have often proved to be linked or overlapping in some fashion. Chi Mak and Dongfan Chung were closely connected. On the same day that Chung was arrested in California, at the other end of the country, in Alexandria, Virginia, the government charged three people under the espionage laws with spying for China in what the press reported was "an unrelated case."

But it was not unrelated. For, as it turned out, Lin Hong, a Chinese intelligence official based in Guangzhou and Hong Kong, was the puppet master pulling the strings in the cases on both coasts and a fourth that was revealed a year later, in May 2009.

The three people arrested in February 2008
were Gregg W. Bergersen, a Defense Department employee, Tai Shen Kuo, forty-eight, a New Orleans businessman acting as a spy for China, and Yu Xin Kang, his young Chinese girlfriend who worked for Kuo's furniture company and served as a cutout between Kuo and his handler in China, Lin Hong.

Bergersen, a Navy veteran with a
TOP SECRET
clearance who liked to gamble in Las Vegas, worked in Arlington, Virginia, for the Defense Security Cooperation Agency, the Pentagon unit that manages the vast program of US arms sales to foreign countries. He began his military career in naval intelligence, and served on a CIA committee (COMEX) that monitored technology transfer to the Soviets and eastern Europe. For that work, he received a Meritorious Unit Citation from then CIA director Robert Gates.

With a family to support, Bergersen, fifty-one, longed after he retired to move into the world of "beltway bandits,"
the military and intelligence companies and consultants that surround Washington and thrive on government contracts.

It seemed as though his prayers were answered when he met the free-spending Tai Shen Kuo, who cultivated Defense Department officials and claimed he was developing a consulting company to obtain defense contracts. He told Bergersen, "When my company get to the point ... where I can pay you three, four-hundred thousand a year, you come out"
and retire. He also held out the prospect that Bergersen might become part owner of the company.

Born in Taiwan, Kuo, short and charismatic, came to the United States in 1972 to attend college in Louisiana on a tennis scholarship. He became a naturalized US citizen eight years later and held both American and Taiwanese passports. Kuo went into business importing Chinese furniture. He lived in New Orleans but traveled regularly to China and had an office in Beijing. His wife, Jane, was the daughter of a high-ranking Kuomintang general, Hsueh Yueh, who fought the Japanese during World War II and fled to Taiwan after the Communists took over the mainland in 1949.

After the FBI arrested Kuo, he sought out Plato Cacheris, a prominent criminal attorney in Washington, renowned for representing defendants in espionage cases, among them Aldrich Ames and Robert Hanssen. According to Cacheris's younger partner, John Hundley, Kuo was first approached by Chinese intelligence in the 1990s.

"He was trying to sell cotton and other products to China and working with an associate on the West Coast," Hundley recounted. "They made several exploratory trips to China to promote their business, and his associate introduced him to Lin Hong
as someone Kuo needed to know to do business in China. Lin was described to him as an executive with the Guangzhou Friendship Association, a government organization that helped North American businessmen conduct business in China. It didn't take him long to realize that Lin was in the Chinese government."
In fact, Lin Hong was an intelligence officer of the People's Liberation Army.

In the 1990s Kuo had embarked on a new business venture to develop a defense communication system between the United States and Taiwan. Lin Hong pressed him for information about the work, holding out the prospect of a "big project" in China if he delivered what Lin wanted. Over the next several years, Kuo passed defense information to Lin.

And it was in the early 1990s that Kuo developed another reason to travel to Beijing. He met Yu Xin Kang, a slim nineteen-year-old Chinese girl, and their relationship blossomed into an affair. Kuo supported Kang, using her as a go-between with Lin Hong. She met with Lin in Beijing and passed messages between the Chinese spymaster and Kuo, who used her apartment in Beijing for meetings with Lin.

Yu Xin Kang moved to New Orleans in 2007 to work as a secretary for Kuo.
In the United States, Kang, now thirty-two, answered to the name Katie and obtained a green card as a legal permanent resident alien. With money from Lin Hong, Kuo continued to support her.

The spy business was proving more lucrative than Kuo's other uncertain enterprises. According to court documents, Lin Hong paid Kuo $50,000, and Kuo in turn entertained Bergersen in the casinos and expensive shows of Las Vegas, and paid him small amounts of cash. Bergersen, in turn, provided Kuo with Pentagon documents and information, some classified. Kuo told Bergersen that the data he provided was going to Taiwan. Bergersen did not know that Kuo passed the information to Beijing.

In April 2007, on a trip to Las Vegas, Kuo handed Bergersen $3,000 in cash to play poker,
and Bergersen exchanged the money for casino chips. The next day, Kuo reported to Lin Hong that Bergersen had agreed to provide the Pentagon's projected five-year arms sales to Taiwan. In a phone call to Bergersen in July, Kuo reminded Bergersen it was the Defense Department's document he wanted: "I want your ... paper. I don't want CIA, I got CIA's paper."

Kuo flew to Washington in July, and the FBI managed to plant both audio and video surveillance in the car he rented. As they drove to Dulles International Airport later that day, Kuo put a thick stack of bills into Bergersen's shirt pocket. Bergersen brought along the Taiwan arms sales projection and had cut the "
SECRET
" markings off the document. He told Kuo he was reluctant to let him have it, "because it's all classified," but Kuo could "take all the notes you want."

If anyone found out, Bergersen warned, "Fuck, I'd go to jail, I don't wanna go to jail."

"I'd probably go to jail, too," Kuo replied, chuckling.

Back in Louisiana the next day, Kuo e-mailed his Chinese handler, Lin Hong, that he was not able to keep a copy of the Taiwan arms sales projection—it was "very, very sensitive"—but he was allowed to take notes about it. He said that Bergersen had also let him look at the plans to improve Taiwan's command-and-control and intelligence capabilities.

Five days later, Kuo flew to Beijing, where he was met at the airport by Yu Xin Kang. Kuo personally delivered to Lin Hong the handwritten notes he had taken from the documents that Bergersen had let him see.

In August, there was a domestic scene right out of
Fawlty Towers.
In a telephone conversation with Kuo, Bergersen lamented that when he returned from a trip, his wife went through his wallet
and found an unexpected amount of money. Not wanting to explain its source, he told her that he won it gambling. In that case, his wife said, she was entitled to half the money—and she took it as her share. Kuo offered to make up the difference, but Bergersen declined, saying he could not put it in the bank anyway, because, "I don't want any record."

In March 2008, a month after he was arrested, Bergersen pleaded guilty under the espionage statutes to a single count of conspiracy to disclose national defense information. He was sentenced to just short of five years in federal prison.

Tai Shen Kuo pleaded guilty to conspiracy to deliver national defense secrets to China. He was sentenced to almost sixteen years, later reduced to five for cooperating with prosecutors, and fined $40,000.

Yu Xin Kang received a much lighter sentence of eighteen months in prison for aiding and abetting an unregistered agent of the Chinese government. Prosecutors recognized that she had been used and controlled for years by Kuo, her lover and sole financial support.

Lin Hong was safely out of reach, in China. But an FBI affidavit in the Bergersen/Kuo case made clear that the spymaster also ran the Chi Mak operation on the West Coast. Rebecca Chiu had admitted that Lin Hong and others had provided them with the tasking lists of information Chi Mak was to gather. Lin Hong's name and phone numbers appeared in two of Chi Mak's address books and also on a document in Mandarin Chinese seized from Kuo.

Lin Hong's web of spies on both coasts included a second Pentagon official, James W. Fondren Jr., whom he gave the code name Fang.
On the day that Kuo and Bergersen were arrested, Kuo was staying at Fondren's home in Annandale, Virginia. Like Bergersen, Fondren was one of several current and former government employees and contractors cultivated by Tai Shen Kuo.