Chinese Spy Ring in USA Busted by FBI

by RICHARD SISK - NY Daily News

posted 02/12/08

WASHINGTON - FBI agents raided the suburban home of a Pentagon military sales analyst Monday and busted him on charges of spying for China in return for poker chips, plane tickets and a wad of hundreds.

In a separate case of Chinese espionage, a 72-year-old former engineer and contractor for Boeing was charged with giving military and commercial secrets over decades to Beijing on systems ranging from the space program to Air Force cargo planes. The espionage cases show "that foreign spying remains a serious threat in the post-Cold War world," said Assistant Attorney General Kenneth Wainstein. He said they underlined the "threat to our national security and to our economic position in the world posed by the relentless efforts of foreign intelligence services" to buy secrets.

FBI and Justice Department officials said the cases also illustrated the two favored methods of U.S. foes to gain access to secrets. The indictment of Gregg Bergersen, 51, of Alexandria, Va., was emblematic of "the classic espionage network, complete with traditional elements of spy trade craft - including foreign handlers, payoffs, cutout couriers and a compromised government employee," the officials said.

In the case against Dongfan (Greg) Chung, China compromised an aerospace engineer who acted "out of a strong sense of loyalty" to his former homeland to give away sensitive trade and military secrets, the officials said. The Bergersen case was overseen by a Chinese government spymaster identified only as "Official A," who operated out of Guangzhou and Hong Kong, the indictment said. The Chinese Embassy in Washington had no immediate comment on the charges.

Bergersen, wearing a black T-shirt and blue shorts, and Tai Shen Kuo, 58, a naturalized U.S. citizen from Taiwan and his alleged handler, were arraigned before federal Magistrate Judge John Anderson in Alexandria.

Much of the data concerned U.S. military sales to Taiwan, prosecutors said. Bergersen faces a maximum of 10 years in jail on espionage conspiracy charges. His wife, Ofelia Perotti, a marathon-running executive with the Naval Criminal Investigative Service, told reporters her husband was innocent and the charges "came out of the blue."

Kuo, a furniture salesman in New Orleans, was charged with conspiracy to deliver national defense information to a foreign government and faced a maximum life sentence.

A third defendant, Yu Xin Kang, a suspected go-between for Kuo and Official A, had her arraignment in New Orleans after she broke down crying and an interpreter was not immediately available. In a letter to a contact in China, Chung allegedly wrote that he wanted to "contribute to the motherland" by spying, but Bergersen allegedly had more mercenary motives. FBI affidavits charged that Bergersen was caught taking a wallet from Kuo to pay for poker chips in Las Vegas, and also portrayed Kuo stuffing a fat wad of hundreds into Bergersen's shirt pocket.

At one point, Bergersen complained that his wife went through his wallet after he returned home from a trip to Bulgaria and found a wad of bills. He told her it was gambling winnings - and she promptly peeled off half the bills as her share. Kuo offered to make up the difference; Bergersen declined the offer.

Who's who:

Gregg Bergersen, 51,of Alexandria, Va. Weapons systems policy analyst with top secret clearance at the Defense Security Cooperation Agency, the Pentagon unit that oversees the sale of military equipment to foreign governments. Married to Ofelia Perotti, a long-distance runner who competed in the Boston Marathon and is a division chief in the Naval Criminal Investigative Service.

Tai Shen Kuo, 58, of New Orleans. Naturalized U.S. citizen born in Taipei, Taiwan. Owns a furniture business. Regularly travels to China and has office in Beijing. Close relationship with Chinese government operative identified as "Official A."

Yu Xin Kang, 33, of New Orleans. Chinese citizen and permanent resident of U.S. Employee of Kuo's furniture company. Official A allegedly paid off Kuo, who then paid Kang.

Dongfan (Greg) Chung, 72, engineer and contractor for Rockwell International and Boeing. Since 1979, alleged to have given secrets on systems ranging from the space program to air cargo transports to China out of "strong loyalty" to China rather than money.

China's hunger for progress has its companies increasingly taking the easy route - swiping U.S. trade secrets. In November, a congressional panel said Chinese spying in the United States was the top threat to U.S. technology, putting a strain on America's counterintelligence agencies and kneecapping U.S. manufacturers and technology firms.

China has eclipsed even Russia in its corporate espionage efforts, which cost American companies $300 billion a year, said Ira Winkler, a former National Security Agency staffer and author of "Spies Among Us." Chinese intelligence operatives are constantly at work in the U.S., often preying upon those with ties to China, said Winkler, who is from Brooklyn but lives in Washington. "They play upon the ethnic heartstrings of people with Chinese heritage, telling them they must help. "They identify in social settings who is here on a Green Card, who has relatives in China and who can be compromised," said Winkler, a security consultant.