Silicon Insider: Espionage Hits High-Tech
Jan. 14 -- As long as you keep running they can't pick your pocket.
One of the more interesting events in Silicon Valley in the last few weeks was the indictment of two local engineers on charges of stealing trade secrets for the People's Republic of China.
On December 5th, Fei Ye and Ming Zhong were charged with ten counts of trade-secret theft and economic espionage. They were popped by the Feds in November 2001 while trying to board a plane headed for China out of San Francisco Airport. This was pretty nasty stuff, especially occurring just two months after 9/11. If convicted, the two men (Ye is a naturalized U.S. citizen; Zhong a Chinese national with permanent U.S. residence) could face 95 years in prison and $3 million in fines.
The victims in the case appear to be Sun Microsystems, Transmeta, NRC Electronics and Trident Microsystems, all of whose stolen internal documents were found in the men's possession. The Sun documents related to the company's latest microprocessor, and may have been taken while Ye worked there.
But the big target appeared to be Transmeta, Ye's current employer. The much-publicized young company has had a rough road the last few years, taking on Intel in the laptop computer processor market.
No one has ever doubted the cutting-edge nature of the company's chip technology — and as the company began to shift into embedded processors for industrial applications, Transmeta was expected to be a formidable competitor. In terms of national defense, Transmeta's 'code morphing' technology is especially useful in building the kind of computers you use to model nuclear weapons or track missiles.
Foreign Espionage Hits the Valley
Ye and Zhong's apparent plan was to sneak the stolen secret documents out of the U.S. and set up a new company, named Supervision — or the Zhongtian Microsystems Company — that would build state-of-the-art chips in mainland China.
This might appear at first glance to be just another example of sleazy entrepreneurship. However, the FBI claims to have found documents in the two men's possession suggesting that the PRC government had blessed the project. As a result, Ye and Zhong were among the first people ever charged under the economic espionage act, enacted in 1996.
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