Chinese Nationals Accused in US of Decade of Hacking

Federal prosecutors in New York accused two Chinese nationals of conducting an “extensive” hacking campaign over more than a decade in association with Chinese state security officials, allegedly infiltrating 45 U.S. companies and government agencies in an effort to steal intellectual property and other data.

In an indictment unsealed in federal court in Manhattan, Zhu Hua and Zhang Shilong were accused of conspiracy to commit computer intrusions. Their group is known in the cyber security community as Advanced Persistent Threat 10, according to prosecutors.

The hackers stole information from companies in an array of industries, including banking and finance, telecommunications, biotechnology, automotive, health care and mining, according to the indictment. They also ran an international campaign, allegedly breaching companies in more than a dozen countries.

The group hacked the U.S. Navy, making off with the personal data of more than 100,000 personnel, and successfully infiltrated computers linked to NASA’s jet propulsion laboratory, the indictment said.

The indictment was unsealed shortly before U.S. Deputy Attorney General Rod Rosenstein, FBI Director Christopher Wray and other top law-enforcement officials were scheduled to appear in Washington to announce a China-related enforcement action.

The defendants worked for Huayhing Haitei Science and Technology Development Co. in Tianjin, China, and acted in coordination with the Chinese Ministry of State Security’s Tianjin State Security Bureau, according to the indictment. Their group was also known as 'Red Apollo,' 'CVNX,' 'Stone Panda' and other names, according to the indictment.

Prosecutors said in court filings that while the group used similar tools and methods in all of its campaigns, the hackers increasingly strengthened their ability to breach network defenses as part of a 'continuous and unrelenting effort' to steal technology and other information.

Starting in 2014, members of the group worked to gain access to computers and networks of managed service providers, which remotely manage information technology for businesses and governments worldwide, in order to break into their clients’ systems and steal 'intellectual property and confidential business data on a global scale.' That campaign included the hack of one managed service provider with offices in New York that compromised the data of the provider and clients located in a dozen countries involved in industries including banking and finance, consumer electronics and oil and gas exploration, prosecutors said.

The crackdown on Chinese cyber-espionage comes as the Trump administration faces off with Beijing on trade. Since July, the two countries have imposed tariffs on a combined $360 billion in each other’s imports, a bruising conflict that economists could undermine the global upswing at a time when growth is leveling off.

Fed Chairman Jerome Powell said this week the tit-for-tat tariffs are one of the factors the central bank is monitoring amid signs of slowing global growth. President Donald Trump and President Xi Jinping agreed on Dec. 1 to refrain from imposing new tariffs, giving their officials 90 days to work out a deal on thorny issues like U.S. allegations that China steals intellectual property. But the prospect of a deal has been clouded by the arrest in Canada of Huawei executive Meng Wanzhou, who the U.S. accuses of helping the telecom company evade sanctions against Iran.