By MICHAEL S. SCHMIDT
Monday, May 19, 2014
Attorney General Eric H. Holder Jr. announced charges against Chinese army personnel for hacking into American companies including Westinghouse, United States Steel and Alcoa.
WASHINGTON — The Department of Justice said on Monday it had charged five individuals in China’s People’s Liberation Army in connection with stealing trade secrets from some of the largest American companies, including Westinghouse, United States Steel and Alcoa.
The authorities said that the five men had worked at a 12-story white office tower on a Chinese Army base on the outskirts of Shanghai that was identified in a report last year as a source for many attacks on the American government and corporations.
According to the report, which was released by the American security firm Mandiant, the attacks were coming from Chinese hacking groups, known to many of their victims in the United States as the “Comment Crew” or “Shanghai Group,” that were based in that building.
At a news conference in Washington, senior Justice Department officials said that China should send the defendants — Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui — to the United States to face trial.
Those demands, however, were largely symbolic as the Chinese government, which said on Monday that the facts behind the charges were made up, is unlikely to turn them over.
John Carlin, an assistant attorney general for national security, said the men had “targeted the U.S. private sector for commercial advantage.”
“We allege that members of unit 61398 conspired to hack into computers of six U.S. victims to steal information that would provide an economic advantage to the victims’ competitors, including Chinese state-owned enterprises,” Mr. Carlin said.
In response to the charges, the Chinese government said that its military had never been involved in stealing trade secrets.
“The U.S., fabricating facts and using so-called stealing network secrets as an excuse, announced indictments against five Chinese military officers,” the Chinese Foreign Ministry said in a statement.
“This is a serious violation of basic norms of international relations and damages Sino-U.S. cooperation and mutual trust.”
China has “lodged a protest” with the United States and “urges the U.S. to immediately correct its error and revoke its so-called indictment,” it added.
According to the statement, China also decided to suspend the activities of a Chinese-American Internet working group “given the U.S. lack of sincerity in resolving Internet security issues through dialogue and cooperation.”
China “will make further responses” based on developments, the statement said.
Press material displayed before Mr. Holder at the news conference on Monday.
The Justice Department said that the men were indicted on May 1 by a federal grand jury in Pennsylvania and charged with conspiring to commit computer fraud and accessing a computer without authorization for the purpose of commercial advantage.
Mr. Carlin gave examples of the damage done by the hackers.
He said that while SolarWorld was rapidly losing its market share to Chinese competitors that were pricing exports well below costs, the hackers were stealing cost, pricing and strategy information from SolarWorld’s computers.
And while Westinghouse was negotiating with a Chinese state-owned enterprise over the construction of nuclear power plants, he said, the hackers stole trade secret designs for components of those plants.
In 2013, amid reports that detailed the extent of Chinese hacking of American companies and corporations, American officials tried to pressure the Chinese government to stop its military from compromising American systems.
In March, it was revealed that the National Security Agency had created a back door into the computer networks of Huawei, a Chinese telecommunications giant that is considered a threat by the United States. The N.S.A. has also tracked more than 20 Chinese hacking groups — including some from the Chinese Army and Navy — that have broken into American government networks and companies.
The companies included Google, and drone and nuclear-weapon part makers.
In a separate case, the department was to announce charges later on Monday against several people who used hacking software called Blackshades.
The software allows hackers to remotely control a computer.
Mr. Holder said the two cases showed that the United States was “stepping up” cyberenforcement, regardless of whether attacks are by people inside the United States.