The United States Attorney's Office Central District of California

June 6, 2007

FIFTH FAMILY MEMBER PLEADS GUILTY IN SCHEME TO EXPORT U.S. DEFENSE ARTICLES TO CHINA

SANTA ANA, California -- The fifth member of a Southern California family who conspired to export United States defense articles to the People’s Republic of China has pleaded guilty to acting as an agent of the PRC.
Rebecca Laiwah Chiu, 63, of Downey, pleaded guilty late Tuesday night to failing to register as a foreign agent. On the first day of a trial in United States District Court, Chiu admitted that she operated within the United States under the control of the government of the PRC.
Chiu is the fifth and final defendant to be convicted for participating in a scheme to obtain sensitive military technology and to illegally export the material to the PRC.
The other defendants previous convicted in this case are:
- Chi Mak, 66, of Downey, who is Chiu’s husband and a former engineer for defense contractor Power Paragon, was at the center of the conspiracy and was convicted at trial;
- Chi Mak’s brother, Tai Mak, 57, of Alhambra, who pleaded guilty on Monday;
- Tai Mak’s wife, Fuk Heung Li, 49, also of Alhambra, who pleaded guilty on Monday; and
- Tai Mak’s son, Yui “Billy” Mak, 27 of Alhambra, who pleaded guilty last Friday.
An investigation by federal authorities revealed that co-conspirators from the PRC provided Chi Mak with “tasking lists” that requested specific defense information, including sensitive areas of U.S. Naval research concerning nuclear-powered submarines. The lists contained instructions for Chi Mak to participate in seminars and then compile the information he obtained at the seminars onto computer disks. Chi Mak collected technical information about the Navy’s current and future warship technologies, some of which constituted defense articles. This included information that was sensitive and subject to restriction regarding its distribution, storage and handling. Chi Mak and his wife copied the information intended for the PRC onto CD-ROM disks, which were then given to Tai Mak. Billy Mak then encrypted the defense data onto a CD-ROM disk in preparation for surreptitious delivery to the PRC. This CD-ROM was found hidden in luggage on October 28, 2005 when Fuk Li and Tai Mak attempted to board a flight to the PRC at Los Angeles International Airport. Tai Mak and Fuk Li were arrested at the airport, while Chi Mak and Chiu were arrested at their home. Billy Mak was charged and arrested last year.
“This counterintelligence investigation, worked in partnership with the Naval Criminal Investigative Service, and in cooperation with the Department of Homeland Security, resulted not only with a trial conviction of Mr. Chi Mak on all charges, but also guilty pleas from the remaining four defendants who've admitted to charges that include failing to register as an agent of a foreign government, as well as violating export control laws,” said J. Stephen Tidwell, Assistant Director in Charge of the FBI in Los Angeles. “This case exemplifies the FBI's vision and tenacity in its commitment to protecting America's crown jewels, many of which can be found in Southern California, and should send a warning to those who would endeavor to compromise national security.”
Chi Mak was found guilty by a federal jury last month of conspiracy, two counts of attempting to violate export control laws, failing to register as a foreign agent and making false statements to federal investigators. Chi Mak is scheduled to be sentenced by United States District Judge Cormac J. Carney on September 10, at which time he faces a maximum possible sentence of 45 years in federal prison. Chi Mak has been in jail since his arrest.
The plea agreement between Chiu and the government calls for a sentence of three years in federal prison. Chiu, who is free on bond, is scheduled to be sentenced by Judge Carney on October 29.
Tai Mak pleaded guilty to conspiring to export defense articles, a crime that carries a maximum statutory sentence of 10 years in prison. Tai Mak, who has been in jail since he was arrested, is scheduled to be sentenced by Judge Carney on October 1.
Fuk Mak pleaded guilty to aiding and abetting the attempted illegal export scheme. Fuk Mak, who is free on bond, is expected to receive a probationary sentence on October 1.
Billy Mak, who is also free on bond, also pleaded guilty to aiding and abetting the scheme and is expected to receive a sentence of probation on September 24.
This investigation was conducted jointly by the Federal Bureau of Investigation and the Naval Criminal Investigative Service, which received substantial assistance from U.S. Immigration and Customs Enforcement. 

Note:Google translation of unofficial text transcript of the full original Chinese 10 minutes program video - "Harpoon" is a US Missile all the time.

4Law Basics - An Introduction : Recently, the Taiwan military launched a mysterious "plan" prepared to present two "Sword Dragon" class submarines equipped with the "Harpoon" submarine-launched missiles, to be used in future attacks on the mainland important maritime bases. Taiwan's navy has put the contract to the MD. MD staff will send submarines to Taiwan to understand the situation, coordination and implementation. Well, this mysterious "A plan" including what? "Harpoon" missile capabilities? Missile submarines how to fight the battle? Today's program we have to look into this matter. Explanation : According to Taiwan media, Taiwan navy's submarine upgrade a performance of "A" stepping up. The plan would currently serving two "Sword Dragon" class submarines -- "Dragon" and "Sea Tiger", equipped with the "Harpoon" missiles, to attack the mainland to enhance maritime targets. According to media reports in Taiwan, Taiwan's military has put the development of "A Plan" contract, which was submitted to the United States of MD. "A plan" of the major goals : First, to improve its fire-control system, "Dragon, Sea Tiger "has fired submarine-launched" Harpoon "missile capability, and improve their ability to attack. Second is to enhance the quiet effect was found to reduce the probability of the enemy; 3 is to improve the propulsion system, substantial enhancement in endurance capacity. Taiwan military's combat readiness, "the Dragon" and "Sea Tiger", was bought in 1998 by two Dutch-made submarines. On the end of the 1970s construction, was the world's first a kind of sonar fire-control and navigation propulsion system are integrated into a single system of the submarine. This time, the Taiwan military to give two "Sword Dragon" class submarines equipped with the "Harpoon" missiles is what kind of missiles? It's how kind of performance? China Institute of Contemporary International Relations University, a researcher at : The "Harpoon" missiles is actually the original "Harpoon", the term should be "Whaling's Fork" The missile is being developed by the United States. Developed the first time what is the justification? In the 1967 Middle East war, Israel was a Soviet-made warship missiles to sink. The big boost for the United States, decided on the development of ship-based missiles, ship-borne missiles is. Then from the 1960s research, the success in 1972, start of the 1970s with the American military, have to see whether we now call "Harpoon" missiles. This missile, it is now actually become a more widespread use of a missile. Can be launched by aircraft, fighter fired, or fired surface ships, submarines fired, the so-called multi-purpose, Another all-weather, multi-use areas. This missile with a range of the largest, it now has a range of design, the new model has reached 280 km, Naturally, some reports say 110 km, is actually the largest 280 km. Recently be said to be 11 kilometers, a range of areas. The target of an attack should be said is a target at sea, including ships, drilling platforms and other merchant marine, and other. Commentary : According to the plan, two "Sword Dragon" class submarines, to be equipped with a total of the number of "Harpoon" missiles? China Institute of Contemporary International Relations researcher Yang Mingjie : it is now a target the United States was prepared to buy about 60, of course this is a preliminary information, With the future after the completion of the entire conversion may buy more. But few of these pieces of view, the main target of the attacks, is to achieve the greatest goal is a destructive fighting, The so-called destructive, is aimed at the mainland's transport fleet, including civilian targets at sea attacks Of course, one can not rule out a military target. Commentary : every one missile so destructive, lethal reach? China Institute of Contemporary International Relations researcher Yang Mingjie : This Generally speaking, if a missile, from the previous war situation can be sunk, was fired from the air or fired from surface ships, sunk one around about 3,000 tons of frigates, or general warships could. Of course, a sink is hitting the target, the other one is a chain reaction, a chain explosion, but hit land targets. In fact, it's the real land of the damage is not great. Commentary : Taiwan's current target of the attack, what specific ideas? China Institute of Contemporary International Relations University, a researcher : the idea now, we view from the public, For example, the mainland's 10 cities, it was the plan. We also called against the naval base, he introduced the so-called "three sea", the North Sea, East China Sea and South China Sea. But this I think is too high. More likely, from the current analysis, including its so-called "Sword Dragon-class" of the transformation, in my view, to achieve two aims. One is the psychological effect is called each other understand, I have the ability to carry out sabotage. Secondly, it is a continuation of terror tactics, in the event of military conflict, I do not necessarily to adopt a reasonable and in line with the moral logic of this war, I can tell you the civilian facilities, even on the sea and some other facilities, the so-called dual-use facilities to launch an attack. probably more of a destructive role, rather than a strategic things, I feel is rather rare. Commentary : Taiwan currently has four submarines of the 1970s products, It modern and the most advanced submarines compared to what major weaknesses? China Institute of Contemporary International Relations researcher Yang Mingjie : Its main weakness is a launching platform, launch platform was mainly due to the missile, or object to the launch of this platform is not equipped. Another is its overall combat capability is not very strong. For example, its ability to float, float downward, the mobile carrier, may be affected. Also, it is with some other communications facilities, some of the guidance systems connectivity, Because this area prior to these bottlenecks it is the combat capability of the main aspects. Explanation : According to Taiwan media reports, "Hai Sea Tiger," the design of the submarine's upper end of the 1970s, mainly highlights the shallow-to-ship attack, but after 20 years of wind and rain, the water invasion, and combat effectiveness has been deeply affected. Meanwhile, as a European model of the submarines, and the United States for the "Harpoon" missiles on the existence of compatibility problems. Taiwan's armed forces in 2003 during the "Hankuang 19" exercise, on any "Sword Dragon-class" submarine-launched torpedoes lost control, to observe military exercises, the Taiwan's Chen Shui-bian and other senior hurried evacuation of the rostrum. Critics say Taiwan's attempt to "Sword Dragon" class submarines equipped with the "Harpoon" missiles on the mainland to achieve "pre-emptive" war was not reality. Taiwan is a kind of analysis, according to the island's topography, it will face the greatest threat of attack from submarines, It therefore made some arrangements, including the so-called "island's defense tactics." Well, this is a tactical what kind of meaning? China Institute of Contemporary International Relations researcher Yang Mingjie : It is the tactics, "the island's defense." It is also called the "three-dimensional anti-submarine." The "three-dimensional anti-submarine," is what? Including distance, it is early warning aircraft, submarines is the right monitor. Then the short-range, anti-submarine helicopters it, and then there is a surface ships, surface ships now mainly rely on its second-generation warships, 21 second-generation warship, is the main anti-submarine frigate, Meanwhile, it has now been equipped to achieve, and is the size of 10 a submarine fleet. This anti-submarine, it is a war, is the so-called anti-submarine warfare concept, but implementation will have a certain degree of difficulty. What is the main difficulty? 1, although some of the Taiwan Strait waters here, it should be said that the waters are relatively shallow, but in its northern, southern, These three eastern regions trenches, or the sea some special geographical structure, is actually easy to sneak into the submarine. If it emerged in the case, it is the unfolding of the operations group at least, it should be said that the three face, does not include the four other some of the activities in Taiwan, such an island, its entire battle group not yet reached this operational capability. Commentary : "Harpoon" missiles, or what might be called "whale fork" missiles, it is already widely used, as in aircraft, submarines, we can undertake such a load. Taiwan's current production of "Harpoon" missile capability? China Institute of Contemporary International Relations researcher Yang Mingjie : (Taiwan) can not produce it, or the United States. Now there are about 20 countries and regions in the United States have purchased the "Harpoon" missiles, and in several battles, also have been through the experience, it was the hit rate was 95%, of course, because it really is not much use. One was in the United States to attack Libya when it is through the air-launched, destroyed a Libyan called "Warrior" of such a frigate. Then there was the time, during the Gulf War, Saudi Arabia, is fired from a ship missiles, Iraq to attack maritime targets, the two are successful. Moreover addition, the United States now, MD also developed the so-called "Harpoon" missiles and new types of the new version, constant development, because the highest designs, in fact it has already reached the range of 280 km, said it was now nearly 300 km, because it is a missile export control issues, which may reach 280 km is already high. Commentary : Taiwan with the number of "Harpoon" missiles? China Institute of Contemporary International Relations researcher Yang Mingjie : its Air Force and Navy are combined, It was probably the statistics are more than 290 pieces, such a number. But this number, which is actually the "Harpoon" missile is equipped with its F-16 fighter on. Moderator 1985 : Since the submarine appeared after Such hidden in the depths of the ocean underwater pioneer on the battlefield so that the ocean is full of triggers. Taiwan troops to active duty installation of the submarine missiles, assault, the purpose is worth the world's attention. Well, thank you for watching your Qi Ying auspices of the "southern" time, the audience for next week Goodbye! .

Chi Mak, who worked for an Anaheim company, conspired to pass sensitive military documents.

By H.G. Reza, Times Staff Writer
May 11, 2007 

A Chinese American engineer was found guilty Thursday of conspiring to send information about U.S. Navy technology to China that would make it easier to detect U.S. submarines.Chi Mak, a naturalized citizen, was convicted of conspiracy to violate export control laws, attempting to violate export control laws, acting as an unregistered agent of the People's Republic of China, and lying to the FBI.After six weeks of testimony in U.S. District Court in Santa Ana, the jury deliberated less than three days."We were confident about this case from the start," said Assistant U.S. Atty. Gregory W. Staples.Prosecutors described Mak as a sleeper agent who began preparing for his assignment in the U.S. in the 1960s, when he moved from China to Hong Kong, then a British colony. Federal agents said Mak admitted sending military-related documents to China and they found thousands of pages of the files in his home. "To the extent that there is Chinese espionage going on in the United States, I hope [the conviction] sends a strong message," said Assistant U.S. Atty. Craig H. Missakian.Defense attorney Ronald Kaye, saying Mak is a loyal American, accused the government of overstating the facts. He also accused prosecutors of using xenophobia to get a conviction."It's a sad day for our country when fear of the foreigner was the means by which the government was able to obtain a guilty verdict," Kaye said.Mak's conviction gave a boost to federal prosecutors who had suffered setbacks in two high-profile cases involving naturalized citizens accused of spying for China. Critics in the Chinese American community said Katrina Leung and Wen Ho Lee were singled out because of their ethnicity.Leung, a businesswoman and activist in the Southern California Chinese community, was an FBI informant accused of being a Chinese double agent. Those charges were dropped, and she pleaded guilty in 2005 to lying about a sexual affair with an FBI agent and filing a false tax return.Lee, a Los Alamos National Laboratory scientist, was accused in 1999 of stealing nuclear secrets for China. He pleaded guilty to the lesser charge of mishandling classified computer files. Last year, the U.S. government and five news organizations, including the Los Angeles Times, agreed to pay Lee $1.65 million to settle a lawsuit alleging that his privacy had been violated by leaks that portrayed him as a spy.Mak, who is being held without bail at Santa Ana Jail, smiled and hugged his attorneys when he walked into the courtroom Thursday. When the verdict was announced, he quietly lowered his head, not saying a word. One of his attorneys, Marilyn Bednarski, rubbed his back."This was a tough case, a difficult one," U.S. District Judge Cormac J. Carney told jurors. He also told them not to discuss the classified information they had reviewed. "You take it to your graves, so to speak." Sentencing was set for Sept. 10. Mak, 67, faces a maximum of 45 years in prison. His wife, brother and sister-in-law and their son also have been charged in the case and will be tried next month.
Mak was an electrical engineer at Anaheim-based Power Paragon Inc., a firm that works mostly on Navy contracts. The FBI watched him for about 18 months, using cameras, wiretaps and microphones hidden in his car and work cubicle.Mak, who lives in Downey, was accused of taking data that was not classified but which the government said was sensitive and embargoed from China. Witnesses testified that some materials could be bought from the website of the American Society of Naval Engineers until the government put a stop to it, several months after Mak's arrest.The prosecution's case was built around three encrypted computer disks containing military-related information. Mak's brother and sister-in-law were arrested Oct. 28, 2005, just before boarding a plane to China with the disks. The disks contained information about an electric propulsion system for warships, a solid-state power switch for ships and a PowerPoint presentation on the future of power electronics.Mak testified that the information was intended for two friends in Hong Kong, who also were electrical engineers, and Pu Pei Liang, a family friend in Guangzhou. He said Pu takes care of his sister-in-law's aging mother and has an interest in consumer electronics. The FBI said Pu is Mak's Chinese intelligence handler.Mak said the disks had information he thought was in the public domain because it was presented at three symposiums that foreigners attended.In his closing statement, Missakian asked jurors to question why the disks were encrypted and why Mak's friends needed information about U.S. military technology.Engineers who worked with Mak said he is a brilliant workaholic. Defense attorneys said he took his work with him even when he took vacations. He had planned to retire last year, possibly in Hong Kong.The government said Mak confessed that he had sent information to China for about 20 years. Mak admitted lying about trips he took to China and about his family but testified that he never confessed to passing sensitive information to China. Mak's alleged admission came during the only interrogation that federal agents did not tape.Defense attorney Bednarski said Mak spends his time in jail reviewing engineering books and writing the authors.

Officials once said they had broken a major Chinese espionage ring. But it has morphed into an export-law prosecution.

By H.G. Reza, Times Staff Writer
May 8, 2007 

The counterespionage operation was authorized by the top-secret Foreign Intelligence Surveillance Act court. FBI agents snapped photos of one suspected spy with cameras they had hidden in his house and mounted on light poles across the street and in his company's parking lot.In fall 2005, authorities dismantled what they said was a family spy ring that had been sending U.S. military secrets to China for two decades. Two alleged spies were arrested at Los Angeles International Airport before they could board a midnight flight to Guangzhou with encrypted information about U.S. warships.The arrests were followed by media reports fueled by government leaks that billed the investigation as a major espionage case. But what began as a spy thriller has morphed into a mundane prosecution of violations of federal export control laws. At the center of the spy ring, said the FBI, was Chi Mak, a naturalized U.S. citizen and electrical engineer at Anaheim-based Power Paragon Inc., a firm that works mostly on Navy contracts. The FBI monitored him for about 18 months with cameras, wiretaps and microphones hidden in his car and work cubicle.Mak is charged with conspiracy to violate export laws, exporting or attempting to export military information, acting as an agent of the Chinese government and lying to the FBI. He is the first defendant to be tried. After six weeks of testimony in U.S. District Court in Santa Ana, the case was sent to the jury Monday. Mak's wife, his brother and sister-in-law and their son are still facing charges. Mak was arrested with great fanfare Oct. 28, 2005.In early press accounts, anonymous security and intelligence officials said the damage allegedly inflicted to national security by Mak and his relatives could equal the harm done by John A. Walker Jr. and his family of spies, who supplied Navy communication codes to the Soviet Union for 17 years until they were stopped in 1985. Some counterintelligence officials privately suggested that his access to classified programs could severely compromise the Navy's strategic advantages.
However, when a federal grand jury indicted Mak and two co-defendants in November 2005, they were not charged with spying but only with failing to register as agents of the Chinese government. It was a bewildering turnaround in a case officials had said would shine a spotlight on two decades of Chinese spying.Subsequent indictments were later issued against two more family members, and the other charges were added.Although no one was charged with espionage, during closing statements Monday, Assistant U.S. Atty. Craig Missakian insisted Mak was a spy. Mak was accused of taking information that was not classified but which prosecutors said was sensitive nevertheless and embargoed to China. Defense witnesses testified that some of the materials could be purchased from the website of the American Society of Naval Engineers until the government put a stop to it, months after Mak's arrest. Prosecutors said Mak had copied classified documents kept in Power Paragon's safe and which he kept illegally in his office cubicle. During the trial, prosecutors did not produce any witness who said Mak gave information to the Chinese.But prosecutors said Mak had confessed to providing documents to the Chinese government when federal agents interrogated him. Unlike other interviews with the defendants, this one was not taped. Mak denied he confessed.The government's case is built around three computer disks containing military-related information. Prosecutors said Mak violated federal law by trying to export the disks to China despite receiving training on export control laws.Two disks contained reports written by Mak and two other Power Paragon engineers, which Mak delivered at engineering symposiums in the United States. Defense attorneys said Chinese engineers attended the conferences. The disks contained information about an electric-powered propulsion system for warships and a solid-state power switch for ships. The third disk contained a PowerPoint presentation on the future of power electronics.Power Paragon officials testified that Mak and the other engineers did not receive permission from the company to present the reports. The information on the disks that related to warships had been discussed in symposiums open to foreigners, defense attorney Ronald O. Kaye said. For this reason, Mak said, he believed the data was in the public domain and legal to give to three friends in China. One of them was Pu Pei Liang, who prosectors said was Mak's Chinese "handler." Mak said Pu was taking care of his sister-in-law's aging mother.Mak presented one of the documents he is accused of trying to export to China at a 2004 symposium in the U.S. The report was also presented at a conference in Scotland the year before by co-author Yuri Khersonsky, a Power Paragon engineer who was a company vice president at the time. The other document is about a solid-state power switch for ships presented at a symposium months before his arrest. Two officials from L-3 Communications, Power Paragon's parent company, testified that the document did not contain sensitive information and releasing it to China did not pose a threat to national security.Mak's trial has been followed closely by civilian export control experts, and many believe that the information he is accused of trying to export to China was in the public domain.Clif Burns, a Washington attorney and expert on export control laws, has been following the case and discussing it on his blog. "I don't think the government fully knows what it's doing, other than trying to put this guy in jail," Burns said. "They're saying public-domain information can't be shipped to countries subject to arms embargo. That's outlandish." 

By Jeremiah Marquez  , The Associated Press
May 7, 2007  1:46 PM

SANTA ANA – A Chinese-born engineer who worked on U.S. naval technology sought to give China information on propulsion of future submarines, a federal prosecutor said Monday in urging jurors to convict the defendant of conspiring to export defense materials and other crimes.“The defendant was spying for China,” Assistant U.S. Attorney Craig Missakian said in closing arguments. “This man's life has been defined by one thing and that is hiding his connection to the People's Republic of China.” Chi Mak, 66, a naturalized U.S. citizen, has been on trial for six weeks on allegations that for years he took material from his employer and gave it to his brother to pass along to Chinese authorities. He could be sentenced to more than 50 years in prison if convicted of conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles, and making false statements. His wife, brother and other relatives also have been indicted. In his closing argument, defense attorney Ron Kaye countered that his client had not compromised national security. The technological information was available at conferences attended by Chinese academics and students, and wouldn't help the Chinese regarding Navy submarines, Kaye said. “Speculation, nonsense. This is what they're trying to tell you because they got nothing,” Kaye told jurors. “Don't be fooled, don't be scared.” The trial included testimony from FBI agents, Navy officials, encryption and espionage experts and Mak. Some witnesses said Mak was hardworking during his two decades in the United States and was remarkable only for his thrift. He lived in a 700-square-foot home despite a six-figure salary and once switched hotels to save $2. The government, however, said Mak's unassuming ways were part of a long-running conspiracy to take thousands of pages of documents from his employer, Power Paragon of Anaheim, and send the material to China with the help of family members. “What the defendant was trying to do in essence was give the Chinese a guided tour of the engine room of the submarine of the future,” Missakian said in his closing argument. Missakian disputed the defense claim that the information was publicly available, saying the Defense Department had not approved its release. 
The prosecutor added that Mak had received extensive training in export laws. “If the document is in the public domain, why not fax it, why not e-mail it, why not send it by mail?” Missakian said. Mak was arrested in 2005 in Los Angeles after FBI agents stopped his brother and sister-in-law as they boarded a flight to Hong Kong. Investigators said they found three encrypted CDs in their luggage containing documents on a submarine propulsion system, a solid-state power switch for ships and a PowerPoint presentation on the future of power electronics. Key to the trial was the government's allegation that Mak confessed to the conspiracy – and even named his so-called “handler” and specific restricted documents – during an untaped jailhouse interview two days after his arrest. During the trial, Mak testified he never confessed during that interview, but admitted on cross-examination that he lied repeatedly in an earlier taped interview the night he was arrested. He also acknowledged he lied on U.S. immigration forms years before and in an application for a secret government clearance. Kaye noted that Mak's alleged confession was not recorded, even though federal agents had recorded all other interviews in the case and had conducted video and audio surveillance of Mak and his family for months. Kaye argued that the government concocted the confession to bolster its case.Kaye also sought to distance Mak from his brother, Tai Mak, who is also charged in the case. The lawyer said Tai Mak may have used his brother to get information he could profit from commercially in China. “We have two brothers,” Kaye said. “One's lying. One isn't.” Kaye portrayed Chi Mak as a well-regarded, dedicated engineer and “a loyal American ... A man who has been defamed by this government.” Trials for Mak's brother and other family members begin later this month. 

By Jeremiah Marquez  , The Associated Press
May 7, 2007  10:00 AM

SANTA ANA – A prosecutor said Monday that a Chinese-born engineer accused of taking thousands of pages of defense technology documents attempted to give the Chinese “a window into the engine room of a submarine.” 
“He had the skill and willingness to lie,” Assistant U.S. Attorney Craig Missakian said at the start of closing arguments in the six-week trial. “You put those together and that's when he became dangerous,” the prosecutor said. 
Defendant Chi Mak is accused of taking documents from his employer for years and giving the material to his brother to pass along to Chinese authorities.The trial of Chi Mak, a naturalized U.S. citizen, featured testimony from a parade of FBI agents, U.S. Navy officials, encryption and espionage experts and the 66-year-old engineer himself.Some witnesses said Mak was hardworking during his two decades in the United States and was remarkable only for his thrift. He lived in a 700-square-foot home despite a six-figure salary and once switched hotels to save $2.The government, however, said Mak's unassuming ways were part of a long-running conspiracy to take thousands of pages of documents from his employer, Power Paragon of Anaheim, and send the material to China with the help of his brother, wife and other family members.Mak has pleaded not guilty to charges of conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles, and making false statements. His wife, brother and other relatives also have been indicted.If convicted, Mak could get more than 50 years in prison.Mak was arrested in 2005 in Los Angeles after FBI agents stopped his brother and sister-in-law as they boarded a flight to Hong Kong. Investigators said they found three encrypted CDs in their luggage containing documents on a submarine propulsion system, a solid-state power switch for ships and a PowerPoint presentation on the future of power electronics.Key to the trial was the government's allegation that Mak confessed to the conspiracy – and even named his so-called “handler” and specific restricted documents – during an untaped jailhouse interview two days after his arrest.Mak testified he never confessed during that interview, but admitted on cross-examination that he lied repeatedly in an earlier taped interview the night he was arrested. He also acknowledged he lied on U.S. immigration forms years before and in an application for a secret government clearance.Mak's attorneys focused on the propulsion system documents found in his brother's luggage at Los Angeles International Airport. Mak said he believed he was doing nothing wrong by giving the documents to his brother to take out of the country because they were papers that had been presented previously at international conferences.The government, however, alleged the documents were export-controlled.Trials for Mak's brother and other family members begin later this month.

By JOSH GERSTEIN Staff Reporter of the Sun
May 4, 2007

SANTA ANA, Calif. — The prosecution wasted no time yesterday in challenging the credibility of an accused Chinese spy, Chi Mak, who has denied he was trying to aid the Chinese government when he arranged to send disks containing submarine propulsion technology to China."You're a liar, aren't you?" a prosecutor, Gregory Staples, said as he opened his 90-minute cross-examination of the defendant."No," Mr. Mak said calmly.Mr. Staples went on to suggest that Mr. Mak, an electrical engineer who worked for a Navy contractor, Power Paragon, lied repeatedly after his arrest in October 2005, as well as on an immigration form and an application for a security clearance to handle classified information.Mr. Mak conceded that he lied to the FBI and a Navy investigator about how often he had traveled to China, but he said his answers to other questions were simply "not complete." For instance, Mr. Mak now maintains that the disks were intended for two academics in Hong Kong and a family friend in mainland China. However, at his initial interrogation, he mentioned only one of the Hong Kong professors."I still don't believe I lied," Mr. Mak said of the omission."You just admitted to almost a dozen lies you told," the prosecutor said at one point.Mr. Mak has said some of the misstatements came because he was scared and confused by the circumstances of his arrest. He said he was in bed when the FBI arrived at his home and he was taken out of his house initially wearing just underwear. The defense has also noted that the interrogation continued late into the night and that agents lied to Mr. Mak about what was on the disk they found when his brother and sister-in-law were arrested the same night as they prepared to board a flight to China."They were pushing me that night," Mr. Mak said. He insisted yesterday that he has no idea why his brother used a program to reduce the three disks of technical information to one and placed the disk among a set devoted to learning English."Why would he compress it down to one disk and hide it?" Mr. Staples asked."I'm not aware," Mr. Mak replied. He said he saw nothing wrong with sending the papers to China because they had been presented at public conferences attended by foreigners.Mr. Mak said he omitted some relatives from his security clearance application because he had also left them off an immigration form he filled out years earlier. "I want to keep consistent. They have no relationship with my work," he said."Once again you lied to get a benefit?" Mr. Staples said.Mr. Mak replied that he never wanted to handle classified information, but one of his supervisors said it would benefit the company if he could work on such projects. "I'm not interested in security clearance," he said. "I had no reason to lie."Mr. Staples expressed incredulity at some of Mr. Mak's answers, but raised his voice only occasionally. The prosecutor, who is broadshouldered and stocky, seemed to be taking care not to engender sympathy for the defense by intimidating Mr. Mak, 66, who is slight and testified that he weighs less than 140 pounds. The relatively brief cross-examination and the lack of fireworks also seemed intended to suggest to jurors that Mr. Mak's testimony was so implausible that it should be dismissed out of hand.Some of the most damning evidence against Mr. Mak may be notes found in his home and his brother's home, containing what seems to be a series of coded phrases. One phrase, "send a card," appeared next to the words "help your mother in law." Mr. Mak testified Wednesday that he got the list from his niece who said it could be used to communicate about her ailing mother in China without upsetting people.However, Mr. Staples pointed out that some of the entries do not seem to pertain to a sick or elderly relative. For instance, "supermarket" appears next to the phrase "good material."Mr. Mak said he considered the list absurd and told his niece so. "The whole thing's ridiculous," he said yesterday. Nevertheless, Mr. Mak conceded, he copied the list by hand and gave it to his brother.Mr. Mak's wife, brother, sisterin-law, and nephew have all been charged with conspiracy to illegally export defense articles. They are set to be tried later.Mr. Mak testified that he does not think his brother is a spy. However, defense lawyers have tried to put some distance between the two men by arguing that their client had no knowledge that the disk would be encrypted and that Mr. Mak's brother misled him about details of the couple's travel plans on the night of the arrest.

By Gillian Flaccus , The Associated Press
May 3, 2007 4:41 PM 

SANTA ANA – A Chinese-born engineer accused of conspiring to export U.S. defense technologies to China acknowledged Thursday on the witness stand that he copied classified documents from his defense contractor employer and illegally kept copies in his office. Chi Mak, 66, also acknowledged during cross-examination that he lied repeatedly to FBI agents during an hours-long interrogation immediately after his arrest and lied on his U.S. immigration form years ago. 
Authorities believe Mak, a naturalized U.S. citizen, took thousands of pages of documents from his employer, Power Paragon of Anaheim, and gave them to his brother, who passed them along to Chinese authorities over a number of years.Mak was arrested in 2005 in Los Angeles after FBI agents stopped his brother and sister-in-law as they boarded a flight to Hong Kong. Investigators said they found three encrypted CDs in their luggage containing documents on a submarine propulsion system, a solid-state power switch for ships and a Power Point presentation on the future of power electronics.He has pleaded not guilty to charges of conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles and making false statements. His wife, brother and other relatives also have been indicted. Under cross-examination Thursday by Assistant U.S. Attorney Greg Staples, Mak acknowledged that he lied to the FBI about the number of times he'd visited China and lied when he said he didn't have friends or relatives in China. He said he felt intimidated during the interrogation. “This is why I lied,” he said. “They were pushing me that night.” Staples also questioned Mak closely about classified documents that he copied from his employer in 2001 and then kept in his desk drawer. Under federal law, the documents should not have been copied and should not have been kept in an unsecured area, Staples said. Jurors have viewed the documents in a red folder that was passed around during earlier testimony. “When you copied this document you were standing in front of a sign that said you cannot copy classified documents, isn't that true?” Staples said, referring to warning signs over Power Paragon's copy machine. “I don't remember so many signs,” Mak said. “Now I realize it's not right, but at that time I didn't realize it was illegal.” Staples suggested that Mak passed the classified documents to his brother, who took them to China several months later – something Mak denied. Staples suggested Mak did the same thing in 2004 with documents on technology related to the DDX destroyer, a new warship, and was trying to do the same thing in 2005 when his brother and sister-in-law were arrested. In 2004, Staples said, Mak left for Shanghai two weeks after having his brother create an encrypted disk with a copy of the DDX documents on it. Once in China, Staples said, Mak called a man, Pu Pei-Liang, who the government has alleged was Mak's handler. Mak testified he did not know his brother was going to encrypt the disk. “The last three times your brother has gone to China have been preceded with you copying classified information or encryption of defense technologies, is that correct?” “Yes, but (they're) not related,” Mak said. 
Staples also questioned Mak about what he called a code translation sheet that was found during a search of Mak's brother's home after his arrest. The sheet, in Mak's handwriting, indicates that the word “supermarket” means “good material,” while the word “cinema” means “retired.” Mak testified Wednesday that the code sheet was created by his niece and was to be used to write letters about his sister-in-law's mother, who was ill and being cared for in China by Pu. He said he considered the code sheet a joke and did it only to humor his niece. “The whole thing is ridiculous, that's what I said,” Mak said.
Closing arguments in the case are scheduled for Monday and the jury could get the case as early as Tuesday. 

By H.G. Reza, Times Staff Writer
May 3, 2007 

The Chinese American engineer on trial for allegedly conspiring to send U.S. military technology information to China denied Wednesday government allegations that he confessed to providing sensitive data to his homeland's military.Under questioning by defense attorney Ronald O. Kaye, Chi Mak denied telling investigators that he had been sending information to China since 1983. Prosecutors said Mak confessed while he was interrogated in the Santa Ana City Jail two days after his arrest.
The government said Mak admitted using his brother, Tai, to carry information about U.S. military information to Chinese intelligence officials. Kaye said federal agents video- or audio-taped six interviews with Mak and four co-defendants. The interview in which Mak allegedly confessed was the only one federal investigators did not tape, according to one agent's testimony. Mak said he was angered by the agents' interrogation tactics. He said an agent waved a technical document in front of him and said investigators had recovered it from one of the three computer disks he had tried to send to Hong Kong with his brother.Mak has maintained the disks contained unclassified information he thought was in the public domain because it was presented at three symposiums open to foreigners. The document the agent showed him was labeled as proprietary information that belonged to his employer, Power Paragon Inc., an Anaheim-based military firm.Mak said he believed the agent and told him he had made a mistake if the document was included in the disks. He later learned it was not on them. The agent also offered to get him an attorney if he cooperated, he said. "I was angry and sad — angry because I feel the interrogation includes a lot of misinterpretations and distortions," Mak said. Tai Mak and his wife were arrested Oct. 28, 2005, before boarding a flight to China with the computer disks. The disks contained information about an electric-powered propulsion system for warships, a solid-state power switch for ships and a PowerPoint presentation on the future of power electronics. Chi Mak testified that the information was intended for two old friends in Hong Kong who are also engineers.
But Mak admitted lying to investigators the first time they questioned him. He told them he did not have relatives in China and lied about the number of trips he had taken to his homeland. He also admitted he did not tell them that the disks were also intended for Pu Pei Liang, who lives in Guangzhou.Prosecutors have said Pu is Mak's intelligence handler in China. Mak testified that Pu is caretaker for his sister-in-law's sickly mother and interested in consumer electronics and a magnetic levitation train under construction in Shanghai. Mak testified he had spoken with Pu only three times since 2000."I don't lie normally," Mak said. "But that night they were pushing me so hard. I was scared." He is charged with conspiring to violate export laws, exporting or trying to export military information to China, acting as an agent of the Chinese government and lying to the FBI.Mak will take the witness stand again today for cross-examination by Assistant U.S. Atty. Gregory W. Staples. The jury is expected to begin deliberations next week. 

By JOSH GERSTEIN Staff Reporter of the Sun
May 3, 2007

SANTA ANA, Calif. — At the Chinese espionage trial under way in federal court here, there is a constant clattering from the far end of the front row. The sound comes from a rotating team of FBI typists racing to transcribe every word uttered, so the bureau's headquarters in Washington can get a nightly report on the case's progress.They are just a few of the more than a dozen government representatives listening intently in the spectators gallery, many taking copious notes.The FBI has good reason to be apprehensive about its prosecution of an electrical engineer who worked for decades in Southern California's defense industry, Chi Mak, 66. The handful of Chinese espionage cases brought in recent decades have often ended with the government disappointed, or even mortified, at the outcome.How the government will fare with Mr. Mak will not be known until after the jury gets the case next week. However, the parallels between his case and the prior ones are striking, and they illustrate the many challenges involved in combating Chinese intelligence gathering in America."The government has had great difficulty prosecuting Chinese cases," a former FBI counterintelligence agent who testified for Mr. Mak's defense, Ivian Smith, said in a recent interview. His comment was something of an understatement.In 1981, the FBI confronted a Taiwan-born nuclear scientist, Gwo-Bao Min, at an airport as he prepared to travel to China. They suspected Mr. Min was relaying sensitive information to the Chinese from the government laboratory where he worked. He was carrying a notecard that discussed miniaturizing nuclear weapons, but prosecutors deemed the evidence insufficient to bring charges.In 1991, the FBI came to suspect that a physicist who was also born in Taiwan, Peter Lee, was passing military information to China. The probe languished for a time, but picked up again after Lee traveled to China, where he lectured a Chinese group on submarine detection technology he was not authorized to discuss. He ultimately pleaded guilty to two felonies, disclosing classified information and making false statements to investigators. The Navy discouraged bringing some serious charges because a trial could call attention to the fact that some of the data had been declassified.Lee was sentenced to a year in a halfway house. The lenient sentence prompted years of wrangling in Congress about whether investigators and prosecutors mishandled the case.Neither the Min or Lee cases brought the FBI nearly as much chagrin as that of Katrina Leung. In 2003, Leung, who had received $1.7 million as an informant for the bureau over two decades, was arrested and charged, in essence, with being a double agent for China. While the alleged presence of a turncoat among the FBI's so-called assets was worrisome enough, it also emerged that Leung had long-running sexual affairs with two veteran FBI agents, including her own handler at the bureau. A federal judge dismissed all charges against Leung after finding that prosecutors engaged in misconduct. While that ruling was on appeal, Leung pleaded guilty to one false-statements charge and a tax charge. She was sentenced to probation.Investigators say the relatively diffuse methods employed in Chinese intelligence gathering pose a challenge to many prosecutions. While Russian and Eastern European spy agencies were known to rely on a few well-compensated recruits who employed cloak-and-dagger techniques to gather crucial secrets, China tends to seek a broad array of technology by relying on the sentiments and loyalties of Chinese-Americans and Chinese students in this country. One result is that the culpability of those involved can be harder to prove in court, especially beyond a reasonable doubt."You're talking about lots of pointillistic dots you have to connect, which isn't as easy to do as having a videotape of someone making a drop and getting a big chunk of money," a lawyer who prosecuted Peter Lee, Jonathan Shapiro, said yesterday. "Everyone who's ever prosecuted a case involving the People's Republic of China has discussed that issue. What's an open question is will a jury understand it?"Lee argued, as Mr. Mak's defense has, that he was engaged in the ordinary exchange of ideas among scientists. Both men also complicated their prosecutions by arguing that the information was in the public domain or not well-protected. "These trials … basically end up putting corporations and the government on trial for failing to have stringent enough controls over the data," a former FBI counterintelligence executive, Edward Appel Sr., said.One salient fact that has gone undiscussed at Mr. Mak's trial is how the investigation of him began. A reporter for the Washington Times, Bill Gertz, wrote that the alleged family spy ring was fingered by someone in the Chinese security apparatus. Such a person could be an enormously effective prosecution witness, but, to protect intelligence sources and methods, he or she will probably never set foot in an American courtroom."The most incriminating facts about espionage are often not used at trial, including the intelligence that originated the investigation," Mr. Appel said. "The Rosenbergs were executed generations before the full truth was revealed."One China case where the government had considerable success was that of a longtime CIA translator, Larry Wu-Tai Chin. Chin confessed in 1985 to working for a handler in China's Ministry of State Security. However, the former CIA analyst said he was simply trying to improve relations between America and China. A jury convicted him of espionage, but investigators never got the chance to see him sentenced for his crimes. On February 21, 1986, Chin, who was facing a possible life sentence, hanged himself in a Virginia jail cell.

By JOSH GERSTEIN Staff Reporter of the Sun
May 2, 2007

SANTA ANA, Calif. — Taking the witness stand in his own defense, an accused Chinese spy said yesterday that he was engaged in legitimate scientific exchange and not espionage when he sent technical papers on electrical systems for American submarines and Navy warships to China."I like to look at some technical exchange," the defendant, Chi Mak, said. "I'm curious to know what's their development stage and I'd like to have their comment on the work."Mr. Mak, an electrical engineer who worked for a California defense contractor, said the papers were intended not for the Chinese government, but for two former academic colleagues in Hong Kong and a family friend in the mainland. Mr. Mak said he saw nothing wrong with sending the papers to China because they were handouts he got at engineering conferences where foreigners were present."All three CDs contained presentation materials that were presented in conferences with international attendees already," Mr. Mak said. Encrypted files from the disks were found in the hand luggage of Mr. Mak's brother and sister-in-law when they were arrested at Los Angeles International Airport in October 2005 as they prepared to fly to China.With those key questions out of the way, a defense attorney, Ronald Kaye, led his client through a lengthy discussion of his education and the years he spent working in a Hong Kong tailor shop before immigrating to America. The prosecution contends that his history has many of the hallmarks of an intelligence agent, but Mr. Mak testified that his journey to Hong Kong from the Chinese mainland in the 1960s was due to a severe bout of rheumatism and that his interest in American military ships was a natural byproduct of the tailoring business.Mr. Mak said he came to America to "seek higher power," meaning work on more sophisticated electrical systems. He acknowledged omitting two of his siblings from an immigration form but said he had no nefarious intent.The defense painted their client as an introverted pack-rat who obsessively gathered and analyzed data, even plotting his projected Social Security income on a graph.Mr. Mak said he never sought out defense-related work and did none of it for about a decade after arriving in America. He acknowledged that he stored thousands of power-engineering documents at home, but said such practices are common. "This is a tradition almost with every engineer," he said.None of the documents investigators found at Mr. Mak's home were marked as classified, but some were designated as "NOFORN," meaning they could not be given to foreigners. Mr. Mak said he was unaware of a policy against taking those home. "I don't think it's practical," he said. "Marketing and even my boss encourage us to work at home."Mr. Mak is expected back on the witness stand today. He has not yet explained documents found at his home that the government says are "tasking lists" specifying the kinds of technology China wanted to acquire. Four members of Mr. Mak's family are also charged and face a separate trial, but a retired FBI agent, Ivian Smith, testified for the defense that such family-based spying is unheard of with the Chinese. "There's not a single instance anywhere," he said.Mr. Smith, who once headed the FBI's counterintelligence program focusing on China, said Chinese who study in America or migrate here are expected to help the Chinese government, but that doesn't mean everyone who gets such requests is a spy. The ex-agent also said a spy probably would not give up his job at a military contractor and move to a purely commercial firm, as Mr. Mak once did. "I can't imagine anybody in Beijing would be very happy if they went back there and said, ‘My source had an opportunity to have access to classified information and declined,'" he said.A prosecutor, Greg Staples, said Mr. Smith's experience with Chinese espionage was fleeting and came about two decades ago. "Your career working Chinese intelligence was really more like a 50-yard dash," the prosecutor said."I wouldn't agree with that," Mr. Smith replied. The New York Sun played an unexpected walk-on role in yesterday's proceedings when Mr. Staples challenged Mr. Smith about an interview he gave in March, after the defense said it planned to call him. "I'm not naïve. I expect the government to try to beat me up a little bit," the former agent told the Sun. "To disagree with the government is parallel to calling you treasonous.""That's a little melodramatic," Mr. Staples said yesterday. "Who in the government called you treasonous?""Some of my former colleagues," Mr. Smith replied, though he acknowledged that no current officials had threatened him.The prosecutor also suggested that it was improper for Mr. Smith, as a witness, to have spoken with the press. The former agent said he was aware of no such restriction on retired officials.Mr. Smith did not dispute the quote but said he had not seen the article. "We don't get The New York Sun in Essex County, Va." he said with a chuckle.

By JOSH GERSTEIN Staff Reporter of the Sun
May 1, 2007

SANTA ANA, Calif. — A federal jury here is being schooled in the nuances and ambiguities of the Chinese language as defense lawyers challenge translations that the government says put the defendant, Chi Mak, at the center of a long-running Chinese espionage operation in the American defense industry.In testimony yesterday, a linguist for the defense disputed the FBI's interpretation of wiretaps and surveillance recordings that the prosecution claims are incriminating evidence that Mr. Mak was a covert agent.Prosecutors contend that a phone recording captured Mr. Mak's brother calling his handler in mainland China and using a code phrase to identify himself as affiliated with a spy ring called "red flower of North America."
However, the defense linguist, Eddie Yip, said the words uttered in the recorded call are not "hong hua," which could mean red flower, but "hong fa," which could mean " Wang prosperity," the name of a Mak family company.Asked how sure he was that the Mandarin word for flower was not on the recording, Mr. Yip said, "100%."Mr. Yip also undercut the government's interpretation of a noisy surveillance recording made in Mr. Mak's car five days before his brother and sister-in-law were arrested at the Los Angeles International Airport as they prepared to carry to China a disk containing encrypted data on submarine propulsion technology. The prosecution contends that Mr. Mak can be heard discussing a CD and later using Chinese words meaning "encrypt." However, Mr. Yip said the phrase he heard has a far more innocuous meaning, "all of them."A defense lawyer, Marilyn Bednarski, also played the recordings aloud to demonstrate to jurors that the sounds are often murky and hard to make out. Classical music can be heard in the background of the recording from Mr. Mak's car.
The defendant chuckled, and some jurors looked at him sympathetically as one of his loud yawns was played again and again over speakers in the courtroom.The defense also stressed that sounds in Chinese often correspond to multiple written words or meanings, making context essential to accurate interpretation.FBI linguists scoffed in the gallery as Mr. Yip took issue with their interpretations of the key phrases. A prosecutor, Craig Missakian, brandished Chinese dictionaries and suggested that when translating a phrase found in another recording, Mr. Yip overlooked translations that mean "secret" or "confidential" and seized on others that mean "compressed" and "made tight.""I cannot type the whole dictionary into one page," Mr. Yip replied tartly, before noting that he had listed encryption as one possible translation.Mr. Missakian also challenged the defense linguist's credentials. While Mr. Yip, a former corruption investigator in Hong Kong, claimed to be fluent in Mandarin, Cantonese, and Shanghainese dialects, he conceded that he did not pass an oral language examination administered for the California courts. He said continues to work in the courts because the test is not yet mandatory.Mr. Mak, a naturalized American citizen who worked as an electrical engineer for defense contractors in southern California, is charged with violating export controls, acting as an unregistered agent for the Chinese government, and lying to investigators. He has not been charged formally with espionage. Four other members of his family have been charged in the case and are expected to go on trial separately next month.Jurors also heard yesterday from an engineer who worked with Mr. Mak in the 1980s, Suresh Gupta. He said he worked regularly on a submarine project for the Navy, known as the USS Dolphin, even though he was not an American citizen.Mr. Gupta said could he bring foreign nationals onto the submarine without any scrutiny and took no particular precautions with the plans. "I was supposed to design the whole thing from home," he said. Prosecutors noted that the USS Dolphin is not a nuclear attack submarine like the ones Mr. Mak helped design.

By GILLIAN FLACCUS, The Associated Press
Apr 26, 2007 5:46 PM 

SANTA ANA, Calif. - Testimony in the case of a Chinese-born engineer accused of stealing U.S. defense secrets revolved Thursday around whether he needed government approval to export a document on a quiet submarine propulsion system to China.Authorities believe Chi Mak, a naturalized U.S. citizen, stole thousands of pages of defense documents from his defense contractor employer, Power Paragon, and gave them to his brother, who passed them along to Chinese authorities over a number of years.He was arrested in 2005 in Los Angeles after FBI agents stopped his brother and sister-in-law as they boarded a flight to Hong Kong. Investigators said they found three encrypted CDs in their luggage containing documents on the propulsion system, which would make U.S. submarines virtually undetectable underwater.Mak, 66, has pleaded not guilty to charges of conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles and making false statements. His wife, brother and other relatives also have been indicted.On Thursday, the first full day of the defense case, two employees from Power Paragon's parent company, L-3 Communications, testified that they were asked to review the propulsion document after Mak's arrest. They said they were asked to determine whether it needed government approval to be taken out of the country.Nancy Hindman, L-3's internal special compliance official, said she reviewed the document - which Mak himself wrote and presented at a 2004 engineering conference - and determined that he didn't need a government license to export it.She testified that initially there was some disagreement between L-3 and Power Paragon about whether the document contained sensitive information, but the companies eventually agreed it didn't."Would you personally have a problem delivering this to the People's Republic of China?" Assistant U.S. Attorney Craig Missakian asked Hindman on cross-examination.No," she replied.A second defense witness, L-3 engineer Kenneth Shelly, testified that he also felt the document didn't contain any threats to American security. He said Mak's paper didn't contain anything that couldn't be found in graduate-level engineering textbooks."There's no specifications, there's no design parameters.... He talks about concepts," Shelly said. "There just wasn't enough there."Outside the jury's presence, Missakian told U.S. District Court Judge Cormac J. Carney that the government disagreed with L-3's analysis and found that the document was export-controlled. He asked the judge to exclude Hindman and Shelly's testimony, but Carney declined.
Missakian questioned Hindman on her motivation for finding the documents harmless. He suggested that she was acting in L-3's interest because the company didn't want a multimillion-dollar fine for allowing the information to become public.
He also focused on the disagreement between L-3 and Power Paragon about the sensitivity of the information and said Hindman had ordered Power Paragon officials to go along with her views.Investigators have said that during a search of Mak's home they found two torn-up notes from Chinese officials asking him to get documents on a number of sensitive U.S. naval projects involving torpedoes, electromagnetic artillery, missile-detection and nuclear defense.They also seized documents on the DDX Destroyer, a next-generation, multimission warship as quiet as a submarine; electromagnetic launch systems for aircraft carriers; high-powered electromagnetic guns; and submarine-mounted kinetic energy projectiles, according to court papers. The government also suspects Mak has been feeding information about Aegis-class warships to China since the 1980s.Mak could testify as early as Monday in his own defense, his attorney, Ronald Kaye, said.

By JOSH GERSTEIN Staff Reporter of the Sun
April 12, 2007

After complaints from business lawyers and university administrators, prosecutors on a Chinese espionage case have reversed course, acknowledging that the defendant, Chi Mak, may attempt to defend himself by arguing that the military-related reports he sent to China were in the public domain.Mr. Mak is on trial in Santa Ana, Calif., on charges of conspiracy to export defense-related data without a license, acting as an unregistered agent for the Chinese government, and lying to investigators.
The government contends that he sent the Chinese sensitive plans for quiet submarine drive technology, electrical systems, and a new generation of Navy warships.In a brief filed as the trial began last month, prosecutors said the law prohibited the transfer of all export-controlled technical data to China, regardless of whether the information was public at the time. "The public domain exception does not apply as a matter of law because the transfers involved China, which is subject to an arms embargo," they wrote.That conclusion was sharply disputed by legal advisers to exporters and academics, who said such a stance would cause havoc by requiring professors to exclude students from China and about 20 other countries when teaching subjects with potential defense applications.The criticism was generated in part by bloggers commenting on a preview of the trial published in the New York Sun on March 23.Just before the jury entered on Tuesday, one of Mr. Mak's attorneys, Ronald Kaye, told Judge Cormac Carney that the government's view had changed. "My understanding is that the government is now submitting that there is the potential for a public domain exception," Mr. Kaye said. A prosecutor, Craig Missakian, portrayed the government's decision as a response to Judge Carney's ruling that the defense could present evidence that the information was public. "That was the court's ruling," the prosecutor said, according to a transcript.Mr. Missakian said that, if the defense has proof the information was public, "the government would not object to a jury instruction that asked the jury to determine whether or not the information was in the public domain."The prosecutor did not say what prompted the government to change its stance, but during the in-court exchange he did not dispute Mr. Kaye's characterization of the public domain claim as "a legitimate defense." A spokesman for the prosecution, Thom Mrozek, said his office could not comment while the trial is ongoing."I think the government came to its senses," an export control lawyer who has consulted with the defense team, R. Clif Burns, said. "Once it's out there, it's out there. Once the Pandora's box is opened, you can't stuff it back in."An official at Stanford University who manages the school's compliance with export rules, Steve Eisner, hailed the development. "It's a good thing that they're recognizing that the regulations do specifically allow information in the public domain not to be subject to export control regulations," he said.It is unclear how useful the concession will be to Mr. Mak. He is accused of providing three technical papers found on a disk in his brother's carry-on luggage as the brother prepared to catch a flight to China from Los Angeles in 2005. Defense lawyers claim two of the papers were presented at public conferences of the American Society of Naval Engineers. The public domain issue may have no effect on the charges of lying and failing to register as a foreign agent.In court yesterday, an agent with the Naval Criminal Investigative Service, Nicholas Mikus, testified that the papers on the disk seized at the airport were encrypted with a 113-letter key later found at the home of Mr. Mak's brother, according to the Associated Press. However, on cross-examination, the Navy investigator said more sophisticated encryption programs are available for free on the Internet.

By GILLIAN FLACCUS, The Associated Press
Apr 11, 2007 6:36 PM 

SANTA ANA, Calif. - A Navy investigator testified Wednesday that a computer disk seized from the brother of a Chinese-born engineer accused of stealing U.S. defense technology secrets contained encrypted files.Nicholas Mikus, an investigative computer specialist for the Naval Criminal Investigative Service, said the files could only be unlocked with a specific "key," a chain of 113 letters that was stored on a floppy disk.Mikus was the latest witness called by the government in its case against Chi Mak, an engineer accused of passing sensitive military information to the Chinese government for more than 20 years.Mak, a naturalized U.S. citizen who worked for Anaheim-based defense contractor Power Paragon, has pleaded not guilty. He is charged with conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles and making false statements.His wife, brother and other relatives also have been indicted.Mak, 66, was arrested on Oct. 28, 2005, after his brother, Tai Mak, and sister-in-law were stopped at Los Angeles International Airport as they tried to board a flight to Hong Kong and Guangzhou, China.Investigators said they found a disk in their luggage that contained encrypted files on an electronic propulsion system that would make U.S. submarines virtually undetectable underwater.Mikus said the disk contained a folder labeled "DLL" that held three directories filled with encrypted files. The disk also contained three files containing notes from biology lectures and two files of Chinese music, he said.Mikus did not testify about the contents of the encrypted files but said the encryption was done on Oct. 25, 2005 - three days before the Maks were arrested.Prosecutors have said the floppy disk that contained the "key" was found inside a white envelope in a drawer in Tai Mak's bedside table. Investigators also said they found three disks from Chi Mak that contained the original, unencrypted files that were found on the disk in Tai Mak's luggage.Under cross-examination by the defense, Mikus acknowledged that encryption programs more sophisticated than the one used on the seized disk are available for free or for a small fee on the Internet and also come with Windows Vista.He also said the encrypted files were not "hidden" under the two music files, as prosecutors have alleged.Court papers indicate investigators found documents at Chi Mak's house on the DDX Destroyer, an advanced technology warship, and lists in Chinese asking Mak for information about torpedoes, electromagnetic artillery systems and technology used to detect incoming missiles at his house.Tai Mak has pleaded not guilty to charges of conspiracy to export defense articles, possession of property in aid of a foreign government, failure to register as a foreign agent and making false statements.

By Gillian Flaccus - The Associated Press
Apr 11, 2007 6:56:42 

SANTA ANA, Calif. — A Chinese-born engineer initially denied passing military secrets to China with the help of his younger brother, then admitted the allegations several days later, a Navy investigator testified Tuesday.Gunnar Newquist, a special agent with the Naval Criminal Investigative Service, played an hour of excerpts from a 4½-hour interview, secretly videotaped after the arrest of defendant Chi Mak in which he repeatedly denied passing sensitive military information to China.“I know your suspicion. ... I did not contact anybody, I did not pass things to people purposely,” Mak said. “I don’t care if you believe or not believe. ... I’m just telling the facts.”Newquist said Mak made his confession two days later during an untaped interview.Mak, a naturalized U.S. citizen who worked for a California-based naval defense contractor, has pleaded not guilty to charges of conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles and making false statements.His wife, brother and other relatives also have been indicted.Mak, 66, was arrested Oct. 28, 2005, after his brother and sister-in-law were stopped at Los Angeles International Airport as they tried to board a flight to Hong Kong and Guangzhou, China.FBI agents found encrypted disks containing copies of documents on a submarine propulsion system hidden in their luggage, according to court papers.
During cross-examination, Newquist acknowledged that the documents on the disks had been presented by Mak at a 2004 meeting of the American Society of Naval Engineers and distributed to attendees afterward.He also acknowledged that the documents that Mak was accused of trying to pass to China were not classified until the summer of 2006 — about eight months after his arrest.In the interview on the night of his arrest, Mak acknowledged that the documents on the submarine propulsion system were found on the disks but said he gave them to his brother so he could use them to find Chinese-language textbooks for Mak on similar topics, such as electronic power and motor drives.He also said in the interview that although the propulsion document was marked NOFORN — meaning it could not be shown to foreigners — many non-U.S. citizens attended engineering conferences that included information on the propulsion system.Mak said he did not consider it a good report and did not think his brother would show it to anyone else.Newquist testified, however, that during a jail interview two days later, Mak admitted he had been passing information to the Chinese for two decades and had a government contact in Guangzhou, China, named “Mr. Pu.”Mak allegedly told the agent that until 2001, he would take sensitive documents to his brother in Hong Kong, and his brother would pass them to Mr. Pu. His brother moved to the U.S. in 2001.Mak said he had passed along military secrets on an electromagnetic aircraft launch system and studies on the survivability of U.S. naval ships, Newquist testified.Mak allegedly told the agent he was not paid for passing the information, but Mr. Pu took care of his sister-in-law’s ailing mother, who lived in Guangzhou.Mak became angry when his Chinese contact began sending him “tasking lists” through his brother, the agent testified.“Those lists made him mad,” Newquist said. When he began passing information, he chose what to give.”Newquist said that during a search of Mak’s home, investigators found hundreds of pages of documents marked NOFORN.Court papers indicate investigators found documents on the DD(X) destroyer, an advanced technology warship, and lists in Chinese asking Mak for information about torpedoes, electromagnetic artillery systems and technology used to detect incoming missiles.Four of Mak’s relatives await trial in the case.His brother, Tai Mak, is charged with conspiracy to export defense articles, possession of property in aid of a foreign government, failure to register as a foreign agent and making false statements.Chi Mak’s wife and Tai Mak’s son and wife are all charged with conspiracy to export defense articles, failure to register as a foreign agent and making false statements.

By JEREMIAH MARQUEZ, The Associated Press
Mar 30, 2007 1:02 PM 

SANTA ANA, Calif. - A federal agent testified Friday that investigators found a computer disk with sensitive details on the Navy's next generation of destroyers when they searched the home of a Chinese-American engineer accused of illegally sending technology information to China.FBI Special Agent James Gaylord said the CD was found at the home of Chi Mak after his arrest and it contained materials related to the so-called DDX, highly advanced guided-missile warships that are under development.The documents were sent by the Navy to companies during contract bidding, including the company Mak worked for, Power Paragon Inc. The company responded to the request but ultimately did not get a contract.The government says a copy of the material was also found on a computer belonging to Mak's brother, Tai.Chi Mak, a Chinese-born naturalized U.S. citizen, is on trial in federal court on charges conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles, and making false statements. His brother, their wives and a nephew also were indicted and face trial later.The government this week began presenting its case against Chi Mak, who at the time of his arrest in 2005 was working on a project called Quiet Electric Drive, a system to decrease the signatures emitted by Navy submarines and surface warships.Prosecutors on Friday also put into evidence a photo found at Chi Mak's home that showed him, his wife and an official of the China National Nuclear Corporation, an entity Gaylord described as essential in developing China's nuclear submarines.The government also submitted into evidence details about a small calendar book belonging to Chi Mak that contains information about Navy ships that passed through Hong Kong in the early 1970s when he lived there.Gaylord noted that the book contains hull numbers and names of commanding officers associated with the ships.Defense attorney Ronald Kaye sought to blunt the importance of the book during questioning of Erin Lee Abernathy, an intelligence specialist with the Naval Criminal Investigative Service who examined the book.Kaye noted that Hong Kong newspapers at that time regularly published arrival and departure times of ships and that the calendar book included escort and hospital ships among other vessels not specifically designed for battle.

Mar 30, 2007 12:20 AM 
By JEREMIAH MARQUEZ, AP 

SANTA ANA, Calif.- The FBI said it seized letters, photos and other evidence linking a Chinese-American engineer with a Chinese government official seeking secret information about the space shuttle.Special Agent James Gaylord testified Thursday that federal investigators also conducted extensive electronic surveillance on Chi Mak for 1 1/2 years. Gaylord was scheduled to resume testimony Friday.Mak, a Chinese-born and naturalized U.S. citizen, is on trial on federal charges of conspiring to send technical military systems information to China when he was working for an Anaheim-based defense contractor.He is charged with conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles, and making false statements. His wife, brother and other relatives also have been indicted.The government of China has denounced the allegations."We have reiterated many times that allegations that China stole U.S. military secrets are groundless and made out of ulterior motives," Chinese Foreign Ministry spokesman Qin Gang said at a news conference Thursday in Beijing.Gaylord testified that the FBI found letters written by a Chinese aviation official to a Boeing engineer named Greg Chung, who worked on the space shuttle program. The official, a representative of China's ministry of aviation, identified Mak as a relative in the letters and sought design information for the "development of the space shuttle," Gaylord said.The official, identified as Gu Wei Hao, wrote he would find a way to pay Chung cash in person for expenses incurred while collecting or purchasing information and said he could channel information through Chi Mak.In a letter that investigators recovered at Chung's Orange, Calif. home, the official noted that the Chinese government was forming a ministry of aeronautics and astronautics industry.According to testimony, the FBI also found a photo of Mak and the official standing in front of Los Angeles' Griffith Observatory and a business card identifying an adviser with the China National Nuclear Corporation - an agency Gaylord said was the rough equivalent of the U.S. Department of Energy.Gaylord said Chung retired from Boeing and later returned as a consultant.

By JEREMIAH MARQUEZ, The Associated Press
Mar 29, 2007 8:28 PM 

SANTA ANA, Calif. - A Chinese-American engineer accused of conspiring to send information on U.S. naval technology to China had repeated contact with a Chinese government official who was seeking information about the space shuttle from a Boeing engineer, according to FBI testimony Thursday.Special Agent James Gaylord read translated letters that he said were written by a Chinese aviation official and were discovered during the investigation of Chi Mak, a naturalized U.S. citizen who worked for a California defense contractor and who is now on trial in U.S. District Court.One letter dated, May 2, 1987, was addressed to a Boeing engineer named Greg Chung, who worked on the space shuttle program. In it, the official wrote: "China is in the process of discussing and approving for the trunk-line airplanes and planning and arranging the space shuttle issues. I hope these products will be flying sky high soon. There are some difficult technical issues that need your assistance."
The official then asked: "I was wondering if it is possible to collect some information on airplane design for the trunk line and the development of the space shuttle. In the past I have asked you to collect some quality control information at your convenience."The official, identified as Gu Wei Hao, then stated he would find a way to pay Chung cash in person for any expenses he may have incurred while collecting or purchasing information, and said he can convey any suggestions or information through Chi Mak."This channel is much safer than others," the official wrote.A business card included with the letter identified the official as being with China's ministry of aviation, civil aircraft bureau. The official also identified Mak as a relative and the letter stated that it was meant to be hand-delivered by Mak to Chung.Trunk line typically refers to certain types of commercial aircraft.In a letter that investigators recovered at Chung's home in Orange, Calif., the official noted that the Chinese government was forming a ministry of aeronautics and astronautics industry."I profoundly understand what you have in your mind," the official wrote. "Therefore I hope that you will introduce advanced technologies and provide advanced technologies and information. ... Please provide at any time. It is faster and safer by forwarding through Mr. Mak."According to testimony, the FBI also found a photo of Mak and the official standing in front of Los Angeles' Griffith Observatory, and a business card identifying an adviser with the China National Nuclear Corporation, which Gaylord said was the rough equivalent of the U.S. Department of Energy.Gaylord said Chung retired from Boeing and then returned as a consultant.
Outside court, Assistant U.S. Attorney Greg Staples would elaborate on Chung's connection to the case.An attempt to locate a telephone listing for Chung through directory assistance resulted in a recording stating the number was not published at the customer's request.A telephone message seeking comment from Boeing was left at the company's Chicago headquarters after hours Thursday.Mak was a key engineer at Anaheim-based defense contractor Power Paragon Inc., where, according to testimony, he had access to or worked on sensitive projects for the Navy.He is charged with conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles, and making false statements. His wife, brother and other relatives have also been indicted.Gaylord's testimony included a description of government bugging of Chi Mak and his brother, Tai Mak.Gaylord said that at various points between June 2004 and October 2005 investigators installed wiretaps on Chi Mak's home and office, put tiny microphones in his house and cars and placed closed-circuit TV cameras above the dining and computer rooms of his home in Downey, a Los Angeles suburb.
Tai Mak and his wife were taken into custody in October 2005 at Los Angeles International Airport as they were about to board a flight to Hong Kong. Investigators said they found in the couple's luggage a CD-ROM with encrypted sensitive technology information. At the same time, Chi Mak and his wife were arrested at their home.Gaylord read to the jury transcripts of a conversation in which Tai Mak told his wife that his brother and his brother's wife were nervous before the scheduled trip to China."They're really nervous," Tai Mak was quoted as saying.According to the transcript, Tai Mak's wife later said, "Don't bother with him. He's just carrying out his duty."The government of China, meanwhile, denounced the allegations in the Mak case."We have reiterated many times that allegations that China stole U.S. military secrets are groundless and made out of ulterior motives," Chinese Foreign Ministry spokesman Qin Gang said at a news conference Thursday in Beijing.

By JEREMIAH MARQUEZ, The Associated Press
Mar 29, 2007 1:30 PM 

SANTA ANA, Calif. - A U.S. defense company engineer accused of conspiring to send technical military systems information to China was subjected to extensive electronic surveillance for 1 1/2 years, though some of the monitoring was foiled by Southern California freeway noise, an FBI agent testified Thursday.Special Agent James Gaylord said that at various points between June 2004 and October 2005 investigators installed wiretaps on engineer Chi Mak's home and office, put tiny microphones in his house and cars and placed closed-circuit TV cameras above the dining and computer rooms of his home in Downey, a Los Angeles suburb.Mak was a member of an elite unit of engineers at Anaheim-based defense contractor Power Paragon Inc., where, according to testimony, he had access to or worked on sensitive projects for the Navy.
The Chinese-born Mak, who became a U.S. citizen in 1985, is on trial in federal court on charges of conspiracy to export defense material to China, failure to register as a foreign agent, attempted and actual export of defense articles, and making false statements. His wife, brother and other relatives have also been indicted.Gaylord, a member of an Orange County-based counterintelligence squad, was lead investigator in the probe, which opened in February 2004.He said many of the conversations recorded by the surveillance were in a mix of Cantonese, Mandarin and Shanghainese. They were relayed to FBI linguists who summarized the conversations or transcribed them verbatim for investigators, he said.The best quality surveillance came from telephone wiretaps, but the microphone surveillance was "quite a disappointment," Gaylord said.
"It's not like a movie," the agent told jurors. "A lot harder than it looks."Gaylord said those speaking weren't always facing the microphones or were moving around and there was background noise from nearby Interstate 5.The freeway is one of the busiest freeways in California and the section in Downey carries a massive amount of traffic between Los Angeles and Orange counties.Agents got access to the home when Mak and his wife were away, he said.The monitoring was not continuous. Gaylord said surveillance of the home would be turned off when the Maks went to bed or left for work.
Mak's trial began this week with selection of an eight-woman, four-man jury, followed by testimony from Power Paragon officials. The company's founder described Mak as one of its best engineers.The government of China, meanwhile, denounced the allegations in the Mak case."We have reiterated many times that allegations that China stole U.S. military secrets are groundless and made out of ulterior motives," Chinese Foreign Ministry spokesman Qin Gang said at a news conference Thursday in Beijing.

By JEREMIAH MARQUEZ, The Associated Press
Mar 29, 2007 11:59 AM 

SANTA ANA, Calif. - A defense company engineer accused of conspiring to send technical military information to China was never given permission to share sensitive documents on a future Navy warship with his brother, a security official for the company testified Thursday.Fred Witham, who oversees security for Power Paragon Inc., was questioned about defendant Chi Mak's access to a so-called DDX document. The government claims the document was found on a computer belonging to Mak's brother, who is also charged in the case.Mak, a Chinese-born naturalized U.S. citizen, went on trial this week in U.S. District Court.Prosecutors also asked Witham whether Mak had ever asked for approval to send the DDX document and two other documents to China.Witham said no but that responsibility for that would have fallen to another Power Paragon official who oversees export controls.Power Paragon founder Arleigh Dotson testified Wednesday that Mak was bright, reliable and successful on the job."He was one of our better engineers," Dotson said.Mak, 66, was a member of an elite unit of engineers at the Anaheim-based defense contractor, Dotson said, and as such had access to or worked on sensitive projects including the Navy's Aegis system, the survivability of Navy vessels and electromagnetic aircraft launch system.Mak has pleaded not guilty to conspiracy to export U.S. defense secrets to China, attempted and actual export of defense articles, making false statements and failure to register as a foreign agent. If convicted, he could get more than 50 years in prison.His wife, brother, sister-in-law and nephew also were charged. Counts against some or all include conspiracy, failing to register as a foreign agent, possession of property in aid of a foreign government, and making false statements.The Chinese government denies it took military secrets."We have reiterated many times that allegations that China stole U.S. military secrets are groundless and made out of ulterior motives," Chinese Foreign Ministry spokesman Qin Gang said at a news conference Thursday in Beijing.In the government's opening statement Wednesday in Santa Ana, Assistant U.S. Attorney Greg Staples painted Mak as a longtime agent who had been sending sensitive material to China since 1983, two years before he became a U.S. citizen. Federal agents asked Mak why he did it, the prosecutor said."The answer was very simple. The defendant said, 'I wanted to help China,'" Staples said.Defense attorney Marilyn Bednarski vehemently denied that her client confessed, calling him a devoted American who never forwarded material he thought was restricted. One of the documents in question had even been presented at a public conference and was available on the Internet, she told jurors.
"This is a case, folks, where everything he copied, he believed was sendable," Bednarski said.Staples told the jury about a CD-ROM that investigators seized from Mak's brother and the brother's wife as they were about to take a flight from Los Angeles International Airport to Hong Kong.The CD was found in an English book for Chinese speakers and on it, Staples said, were Chinese folk songs, homework from Mak's nephew, and an encrypted file containing defense technology information.The prosecutor asserted that despite extensive training on handling sensitive technology information, Mak violated export controls."We are confident you will find him guilty of being an agent of the People's Republic of China without notifying the United States," Staples told the jury.Court documents say that investigators searching Mak's home found restricted documents on the advanced technology warship known as the DDX Destroyer and lists in Chinese asking him for information about torpedoes, electromagnetic artillery systems and technology used to detect incoming missiles.Bednarski contended that the encryption program was meant to hide the information from Chinese authorities.

The Associated Press   Monday, July 18, 2005

LOS ANGELES -- A retired FBI agent who pleaded guilty to lying about his affair with a suspected Chinese double agent was sentenced Monday to probation and fined $10,000 after apologizing for his behavior. Smith pleaded guilty in May to a single count of making a false statement admitting that he had a sexual relationship with Leung and lied about it to the FBI. The government contended that Leung, a paid informant working with him, had access to such information during their affair. The case against Leung, who was charged separately, was dismissed earlier because of misconduct by the government. The judge found that prosecutors blocked Leung's access to the person who would have been her most critical defense witness -   Smith. The government has indicated it will ask the 9th U.S. Circuit Court of Appeals to have Leung's case reinstated. Gathering intelligence during her frequent business trips to China -. Prosecutors claimed she was a double agent for China, beginning around 1990.

His Indictment…        -       His Site: http://www.wenholee.org