On May 16, the US Department of Justice (“DOJ”) announced that, in connection with the multi-agency Disruptive Technology Strike Force (the “Task Force”), it brought criminal charges in five cases and four arrests involving export violations, smuggling, and trade secrets theft.1 The charges were brought in the Eastern and Southern Districts of New York, the District of Arizona, and the Northern and Central Districts of California.
The Task Force, discussed in more detail in a previous client alert,2 was announced in February of this year. The goal of the Task Force is to block adversaries from “trying to siphon [the United States’] best technology.”3 It is co-led by the Assistant Attorney General for the DOJ’s National Security Division and Assistant Secretary for Export Enforcement at the Department of Commerce’s Bureau of Industry and Security.4
According to the DOJ press announcement, three of the five cases involve China. In two of those, charges were brought against “former software engineers” for “stealing software and hardware source code from U.S. tech companies in order to market it to Chinese competitors.” In the Central District of California, a senior software engineer was arrested for “allegedly stealing source code used in metrology software which is utilized in ‘smart’ automotive manufacturing equipment,” which the engineer marketed to various Chinese companies. In the Northern District of California, a former Apple engineer and citizen of China has been “accused of allegedly stealing thousands of documents containing the source code for software and hardware pertaining to Apple’s autonomous vehicle technology.” The announcement notes the defendant has “fled to China and is believed to be working for a PRC-based autonomous vehicle competitor.” The third case involves what the DOJ describes as “a Chinese procurement network established to provide Iran with materials used in weapons of mass destruction and ballistic missiles.” A Chinese national has been charged in the Southern District of New York for “allegedly participating in a scheme to use his employer to conduct transactions with a U.S. financial institution for the benefit of a purported Iranian entity, as part of an effort to provide isostatic graphite, a material used in the production of WMDs, to Iran.”5
The remaining two cases involve “the disruption of alleged procurement networks created to help the Russian military and intelligence services obtain sensitive technology in violation of U.S. laws.”6 In the Eastern District of New York case, a Greek national was arrested “in connection with allegedly acquiring more than 10 different types of sensitive technologies on behalf of the Russian government and serving as a procurement agent for two Russian Specially Designated Nationals” who were “operating on behalf of Russia’s intelligence service.” Meanwhile, in the District of Arizona, charges were brought against two Russian nationals for their “involvement in a procurement scheme to supply multiple Russian commercial airline companies . . . with export-controlled parts and components[.]”7
These charges demonstrate the Task Force’s “commitment to preventing sensitive technology from falling into the hands of foreign adversaries, including Russia, China, and Iran,” according to the Assistant Attorney General of the DOJ’s National Security Division. The Assistant Secretary for Export Enforcement echoed this sentiment, saying, “The Strike Force actions announced today reflect the core mission of our Export Enforcement team – keeping our country’s most sensitive technologies out of the world’s most dangerous hands.” The announcement also quotes the Assistant Director of the FBI’s Counterintelligence Division and the Assistant Director of Homeland Security Investigations, both of whom emphasized that “[c]ombating the illegal transfer of technology is one of” their main priorities, and that protecting the country’s “technologic edge” is key to the country’s economic and national security interests.8
For readers interested in a detailed description of each case, please see the DOJ announcement.