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Five Chinese hackers indicted by DOJ for cyber-espionage

The U.S. Department of Justice (DOJ) has filed criminal charges against five military hackers from China, charging them with cyber-espionage against United States corporations.

One of the corporations cited as a victim of the hacking is Hillsboro-based SolarWorld. SolarWorld’s U.S. headquarters is in Hillsboro, along with the largest solar module production facility in the Western Hemisphere.

“We were notified in 2012 during a period of intrusion and were able to take aggressive steps to further tighten our IT (information technology) security,” said Ben Santarris, SolarWorld’s strategic affairs director, on Tuesday.

On May 19, a grand jury in the Western District of Pennsylvania indicted five Chinese hackers on 31 counts of computer hacking, economic espionage and other offenses directed at six American companies in the nuclear power, metals and solar products industries during a time period ranging from 2006 to 2014.

The indictment alleges that the defendants conspired to hack into American entities, to maintain unauthorized access to their computers and to steal information from those entities that would be useful to their competitors in China, including state-owned enterprises.

In some cases, it alleges, the conspirators stole trade secrets that would have been particularly beneficial to Chinese companies at the time they were stolen. The hackers also allegedly stole sensitive, internal communications that would provide a competitor or an adversary in litigation with insight into the strategy and vulnerabilities of the American entity.

“This is a case alleging economic espionage by members of the Chinese military and represents the first-ever charges against a state actor for this type of hacking,” explained U.S. Attorney General Eric Holder in a May 19 statement. “The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response. Success in the global marketplace should be based solely on a company’s ability to innovate and compete, not on a sponsor government’s ability to spy and steal business secrets.”

According to the DOJ indictment, the defendants were officers in Unit 61398 of the Chinese People’s Liberation Army. The indictment alleges that the conspirators hacked or attempted to hack into U.S. entities named in the indictment.

In 2012, at about the same time the Commerce Department found that Chinese solar product manufacturers had “dumped” products into U.S. markets at prices below fair value, the alleged 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.

This information would have enabled a Chinese competitor to target SolarWorld’s business operations aggressively from a variety of angles.

“I think anytime one country seeks unfair competitive advantage, we have to try to curb that type of behavior,” Santarris said. “If this case has a chilling effect (on hackers), then it’s helpful.”

— Doug Burkhardt



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