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Night Vision Goggles - Chinese Industrial Espionage Case

The threat posed by China goes beyond their reported involvement in the recent cyber attacks against Oak Ridge National Laboratory. Their role in economic espionage was discussed here a few weeks ago by Steve Schippert (Chinese Industrial Espionage: Major Economic Security Threat). The aggressive Chinese economic espionage effort mounted by Chinese intelligence agencies is illlustrated by the announcement by U.S. Attorney Scott N. Schools in the Northern District of California earlier this week that Philip Cheng had been sentenced to two years in prison and fined $50,000 for his part in brokering the illegal export of a night vision camera and its accompanying technology to China.

Cheng had pleaded guilty on October 31 to charges that without authorization from the Department of State for selling the Panther series infra-red camera. Indicted along with Cheng was the owner of Night Vision Technology of Cupertino California, Martin Shih (Shih died after being indicted).

Shih's company designed and made military-application devices that use infrared technology to enhance night vision. Cheng established a separate technology-transfer company with the intention of producing the camera in China, court records show.

Cheng was reported to be aware of the export control restrictions but ignored them, even admitting that he was “probably wrong” in transferring a Panther I camera. While China is the most visible and recent national perpetrator of industrial espionage, other countries like Russia, France and Israel have in the past been active as well. Generally, the F.B.I. is responsible for the investigation into this area. The entire issue of sensitive technology is one that involves many questions of proper sale of technology, and it isn't limited to the obvious night vision goggle case described here. It involves software, algorithms, new materials and more.

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