Five Chinese military hackers charged for spying on US firms

A grand jury in the Western District of Pennsylvania indicted five Chinese military hackers for computer hacking, economic espionage and other offenses directed at six American victims in the US nuclear power, metals and solar products industries.

Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui, were officers in Unit 61398 of the Third Department of the Chinese People’s Liberation Army (PLA). The indictment alleges that Wang, Sun, and Wen, among others known and unknown to the grand jury, hacked or attempted to hack into US entities named in the indictment, while Huang and Gu supported their conspiracy by, among other things, managing infrastructure (e.g., domain accounts) used for hacking. The attacks happened between 2006 and 2014.

The victims of the attacks were Westinghouse Electric Co. (Westinghouse), US subsidiaries of SolarWorld AG (SolarWorld), United States Steel Corp. (U.S. Steel), Allegheny Technologies Inc. (ATI), the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and Alcoa Inc.

The indictment alleges that:

• In 2010, while Westinghouse was building four AP1000 power plants in China and negotiating other terms of the construction with a Chinese SOE (SOE-1), including technology transfers, Sun stole confidential and proprietary technical and design specifications for pipes, pipe supports, and pipe routing within the AP1000 plant buildings. Additionally, in 2010 and 2011, while Westinghouse was exploring other business ventures with SOE-1, Sun stole sensitive, non-public, and deliberative e-mails belonging to senior decision-makers responsible for Westinghouse’s business relationship with SOE-1.
• In 2012, at about the same time the Commerce Department found that Chinese solar product manufacturers had “dumped” products into US markets at prices below fair value, Wen and at least one other, unidentified co-conspirator stole thousands of files including information about SolarWorld’s cash flow, manufacturing metrics, production line information, costs, and privileged attorney-client communications relating to ongoing trade litigation, among other things. Such information would have enabled a Chinese competitor to target SolarWorld’s business operations aggressively from a variety of angles.
• In 2010, U.S. Steel was participating in trade cases with Chinese steel companies, including one particular state-owned enterprise (SOE-2). Shortly before the scheduled release of a preliminary determination in one such litigation, Sun sent spearphishing e-mails to U.S. Steel employees, some of whom were in a division associated with the litigation. Some of these e-mails resulted in the installation of malware on U.S. Steel computers. Three days later, Wang stole hostnames and descriptions of U.S. Steel computers (including those that controlled physical access to company facilities and mobile device access to company networks). Wang thereafter took steps to identify and exploit vulnerable servers on that list.
• In 2012, ATI was engaged in a joint venture with SOE-2, competed with SOE-2, and was involved in a trade dispute with SOE-2. In April of that year, Wen gained access to ATI’s network and stole network credentials for virtually every ATI employee.
• In 2012, USW was involved in public disputes over Chinese trade practices in at least two industries. At or about the time USW issued public statements regarding those trade disputes and related legislative proposals, Wen stole e-mails from senior USW employees containing sensitive, non-public, and deliberative information about USW strategies, including strategies related to pending trade disputes. USW’s computers continued to beacon to the conspiracy’s infrastructure until at least early 2013.
• About three weeks after Alcoa announced a partnership with a Chinese state-owned enterprise (SOE-3) in February 2008, Sun sent a spearphishing e-mail to Alcoa. Thereafter, in or about June 2008, unidentified individuals stole thousands of e-mail messages and attachments from Alcoa’s computers, including internal discussions concerning that transaction.
• Huang facilitated hacking activities by registering and managing domain accounts that his co-conspirators used to hack into US entities. Additionally, between 2006 and at least 2009, Unit 61398 assigned Huang to perform programming work for SOE-2, including the creation of a “secret” database designed to hold corporate “intelligence” about the iron and steel industries, including information about American companies.
• Gu managed domain accounts used to facilitate hacking activities against American entities and also tested spearphishing e-mails in furtherance of the conspiracy.

The FBI conducted the investigation that led to the charges in the indictment.

“For too long, the Chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state-owned industries,” said FBI Director James B. Comey. “The indictment announced today is an important step. But there are many more victims, and there is much more to be done. With our unique criminal and national security authorities, we will continue to use all legal tools at our disposal to counter cyber espionage from all sources.”