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CEO Catches Stranger After Hours, Prompting Espionage Charges (wsj.com) 242

An anonymous reader shares a report: Samuel Straface thought he was the last one out the door one recent evening at the medical-technology startup he leads in suburban Boston. But as he passed a glass-walled conference room on the second floor, Dr. Straface says he saw a man he didn't recognize, sitting by himself in front of two open laptops and a tablet device. He continued walking a few steps toward the exit, but then, feeling uneasy, he turned back (Editor's note: the submitted link could be paywalled; alternative source). The man was later identified as Dong Liu, a dual citizen of China and Canada. And his after-hours computing at Medrobotics is at the center of an economic-espionage case brought by U.S. prosecutors. Mr. Liu is in federal custody, charged with attempting to steal trade secrets and trying to gain unauthorized access to the company's computer system, prosecutors said. If convicted of both charges, he could face a maximum sentence of 15 years in prison. "Mr. Liu adamantly asserts his innocence and we fully expect he'll be exonerated after a careful review of the evidence," said Robert Goldstein, Mr. Liu's defense attorney. The U.S. attorney's office for the District of Massachusetts declined to comment on the case beyond details in court records. Before his arrest, police said Mr. Liu told them he was there to discuss doing business with the company -- but Dr. Straface says no one had scheduled a meeting with Mr. Liu.
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CEO Catches Stranger After Hours, Prompting Espionage Charges

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  • by CajunArson ( 465943 ) on Wednesday September 20, 2017 @11:51AM (#55232333) Journal

    "The man was later identified as Dong Liu, a dual citizen of China and Canada."

    As a non-American this Dong is obviously a victim of racism -- which only exists in America -- and should be given an award for liberating information that wanted to be free from the clutches of evil racists like that CEO who DISCRIMINATED against Dong by using his brain.

    You never discriminate against Dong.

    [P.S. --> If that fucker had been a Russian then executing him on the spot and using it as indisputable proof that Trump committed treason in the election would be cool though. Xenophobia is only bad against some foreigners based on political convenience after all]

    • by K. S. Kyosuke ( 729550 ) on Wednesday September 20, 2017 @12:15PM (#55232501)

      You never discriminate against Dong.

      Clearly that would be sexist as well.

    • Xenophobia is only bad against some foreigners based on political convenience after all

      We're totally against those Canadian hosers.

    • [P.S. --> If that fucker had been a Russian then executing him on the spot and using it as indisputable proof that Trump committed treason in the election would be cool though. Xenophobia is only bad against some foreigners based on political convenience after all]

      It's OK for liberals to hate on Russia since Russians are largely white and must therefore be bad, evil, and racist as well as being single handedly responsible for all the ills ever done by any white people ever.

    • How very... APKish
  • Paywall. (Score:5, Insightful)

    by Jahoda ( 2715225 ) on Wednesday September 20, 2017 @11:56AM (#55232377) Homepage
    I don't understand why we have paywall-ed links on the front page.
    • Look how long it took them to fix the MDSolar problem, much more serious things like paywalls are bound to take decad...

      Nvm.

    • Re:Paywall. (Score:5, Insightful)

      by rsmith-mac ( 639075 ) on Wednesday September 20, 2017 @01:40PM (#55233125)

      Because often those are the original source of a story, and when doing a meta-story like this it's good journalism (and manners) to acknowledge and link to the original source.

      If Slashdot doesn't link to the original source, then they're doing readers a disfavor by linking to a second-hand account. But at the same time if the original source is paywalled, then it's not going to be accessible to everyone. So linking to the original and offering an alternative link, they're both properly citing the original source and making sure a longer story is available to everyone.

      • by dysmal ( 3361085 )

        Except that the alternative link was also paywalled which is why a lot of people are grumbling (this time).

      • by Jahoda ( 2715225 )
        There was no alternative link. Now that is has been added, it is also behind a paywall. I cannot read the story. So, it's not good journalism. But I appreciate your condescending reply which was somehow modded "informative".
        • Slashdot is not journalism. It never has been and criticizing them for that is just silly.

          It's not good editing, good presentation, or very helpful - that much is true. That it isn't good journalism is just silly, as this site doesn't have journalists.

          Don't be dumb.

          See? Now this is condescending.

  • No pay wall here (Score:5, Informative)

    by siriuskase ( 679431 ) on Wednesday September 20, 2017 @11:59AM (#55232395) Homepage Journal
    https://beta.theglobeandmail.c... [theglobeandmail.com]
  • by jelwell ( 2152 ) on Wednesday September 20, 2017 @12:01PM (#55232415)

    A couple of sources that aren't paywalled:
    https://execsecurity.com/news/... [execsecurity.com]
    http://www.cetusnews.com/busin... [cetusnews.com]

  • by Anonymous Coward on Wednesday September 20, 2017 @12:04PM (#55232435)

    They will be less likely to cheat next time.

  • by hyades1 ( 1149581 ) <hyades1@hotmail.com> on Wednesday September 20, 2017 @12:05PM (#55232441)

    "Mr. Liu told them he was there to discuss doing business with the company..."

    Yes. Obviously. Exactly like a fox goes into a hen house to "do business" with the chickens.

    • by Tjp($)pjT ( 266360 ) on Wednesday September 20, 2017 @01:07PM (#55232855)
      Yes, as people often do business with a company by hiding in a bathroom with their feet on the toilet seat, waiting for the lights to go off, then making their way to a room with good guest WiFi, other networking and power easily accessible when they suspect no one is left in the office. Then we set up shop and probe their networks and download information, solely to prepare to do business with them. And bright and early the next day we'll be there waiting to start work with them! Yes, that has to be it!

      People need to have their WiFi, and general network to offices cut-off when it is after hours. Heck, cut power to conference rooms after hours. We have sufficiently smart devices that swiping an access card could turn on lights to your office, and the power and network outlets in your office. WiFi is one of the biggest vulnerabilities to data security. Guest WiFi even more so as it is often left without a password requirement or the password is posted in conference rooms for all visitors to easily use. And often seldom if ever changes. Work smarter people. Intellectual property is one of the major items America still has significant "wealth" and contributions to the GDP.
  • by DeplorableCodeMonkey ( 4828467 ) on Wednesday September 20, 2017 @12:07PM (#55232459)

    But I think it's pretty clear from some of the stories about Chinese espionage that the only way we can disincentivize civilians from doing stuff like this is to completely upend their existence. Ex charge this guy with economic espionage, violating the Computer Fraud and Abuse Act and whatever else, then throw everything from criminal trespass to theft of services (if he's on the company's network).

    • Yeah, right. Then the next time around, when questioned the spy will pull a gun, or a plastic knife that didn't show up in a metal detector. Two days later he's a different Dong Liu in a different part of the country, still a Chinese Canadian...

      • Re: (Score:2, Informative)

        by Anonymous Coward

        You watch too many movies.

    • by Solandri ( 704621 ) on Wednesday September 20, 2017 @12:49PM (#55232753)
      It's worth pointing out that corporate espionage is not frowned upon in the East the way it is in the West. The prevailing attitude in East Asian countries (slowly changing) is that if you didn't take sufficient measures to safeguard your company's secrets and they got stolen, it's your own damn fault. In fact, employees are often expected to steal from competing companies when they can, and can be fired if they're ordered to conduct corporate espionage and they refuse.

      This is why piracy is so rampant in East Asian countries. The concept of media being protected by law even though they lack any real protection, is foreign (again, slowly changing).

      When Western countries were tripping over themselves to help China build high speed trains [wikipedia.org] eagerly agreeing to conditions like doing the fabrication in China, I just shook my head at their naivete. And predictably, after China had gleaned enough knowledge to build the trains themselves - either by direct observation of the construction machines and plans, or by outright theft - they booted the Western companies out and began building the trains themselves. The Western reaction is "that's not fair!". The East Asian reaction is "how stupid can these guys be?"
      • by liquid_schwartz ( 530085 ) on Wednesday September 20, 2017 @01:34PM (#55233081)

        When Western countries were tripping over themselves to help China build high speed trains [wikipedia.org] eagerly agreeing to conditions like doing the fabrication in China, I just shook my head at their naivete. And predictably, after China had gleaned enough knowledge to build the trains themselves - either by direct observation of the construction machines and plans, or by outright theft - they booted the Western companies out and began building the trains themselves. The Western reaction is "that's not fair!". The East Asian reaction is "how stupid can these guys be?"

        To be fair most citizens and employees fully expected the Chinese to steal the plans and copy the trains and were generally these deals. The CEOs who got paid well to sell out the company are almost as guilty as the Chinese. Certainly accomplices. The politicians who turn a blind eye to forced technology transfers should be punished as well.

        • by Ungrounded Lightning ( 62228 ) on Wednesday September 20, 2017 @08:47PM (#55235833) Journal

          The CEOs who got paid well to sell out the company are almost as guilty as the Chinese.

          It's right in line with a career building move for denizens of the C-suite (CEO, COO, CFO, CTO, ...) that is often attributed to the teachings of the Harvard Business School (though graduates of other business schools have also been seen to execute it). It works like this:

          1. Join the company as the new, or turnaround, CEO (or whatever). Get a big package of stock options (a "free" leveraged investment that pays off drastically if, and only if, the stock price rises.)
          2. Dump the R&D and other preparation for future products (and any personnel working on them). Perhaps also make some cuts in customer support for current products, cheapen the product, cut infrastructure maintenance, etc.. This drastically cuts expenses while not (initially) affecting revenue, boosting the "bottom line" of the financial statements.
          3. Announce the big boost in profits at a few quarterly reports and the investor/financial media phone conferences. The stock price soars, as does the executives' reputation as a corporate administration wizard.
          4. Select a successor (sucker), leave the company, and cash out the stock options. (PROFIT!) Of course cashing out when leaving is viewed as prudent, since the company will now be run by somebody else the way THEY feel like running it.
          5. Rinse and repeat at your next company. Meanwhile, your successor is in charge, and catches the blame, when the house of cards collapses.

          The scam depends on the benefits being immediate and the damages, though bigger, being delayed.

          Moving production to China (or some other offshore sites), with its far lower costs but track record of expropriation of trade secrets (which takes a while to spin up into a competing product) has exactly the same structure.

          Of course it's a breach of fiduciary duty for officers of a corporation to do this. But they can make it LOOK like they're being responsible by taking advantage of the drastically lower production prices to "maximize investor value".

          Until enough investors catch on to this, and both the markets and stockholder meetings shift to make this a losing strategy for executives (or regulators pick up on it ditto), expect it to continue.

      • It's worth pointing out that corporate espionage is not frowned upon in the East the way it is in the West.

        Actually, the West is also heavily engaged in economic espionage. Many Western intelligence services, perhaps most notoriously the French [foreignpolicy.com], view economic espionage in the name of giving French industry an advantage, is a core national mission. Nearly every other nation engages in this. The United States tends to be shier about this than others given national laws against corporate espionage, but that doesn't mean it doesn't flirt in the gray areas of this as well.

      • The prevailing attitude in East Asian countries (slowly changing) is that if you didn't take sufficient measures to safeguard your company's secrets and they got stolen, it's your own damn fault.

        This is a common attitude among many people who use the Internet. If you let something appear on the Internet for any reason at any time, behind a paywall/login or otherwise, even by accident or as the result of a simple hack, it is public domain.

      • by Trogre ( 513942 )

        If that is true, then remind me why we do business with them at all?

        • If that is true, then remind me why we do business with them at all?

          Because of the lure of cheap labor, the common idea that "it won't happen to me", and/or the product is short-lived anyway and by the time the Chinese start flooding the market with cheap clones you'll have made all the money you are going to from that fad.

          Or you count on the fact that the Chinese cheap clones are cheaply made and people will still buy your better quality product. People still do buy Yaesu ham radios even though Baofeng and Wouxon and others have clones. Some people don't want to have to

  • Computer security. (Score:5, Insightful)

    by Gravis Zero ( 934156 ) on Wednesday September 20, 2017 @12:10PM (#55232473)

    Honestly, if you are in a field that is competitive enough where others would want to copy your work, you should at least take the proper measures to ensure that somebody cannot just walk in the building and access your data. Your drives should be encrypted at the very least.

    • And if you're going to do something like this, for gods sakes don't do it in a glass walled conf room!

      • I don't know. His sitting in the glass conference room looking harmless almost worked. The CEO almost walked past. In fact if you have a shirt and tie, except in the smallest of companies, you could probably occupy a conference room all day and not draw any attention.
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Read TFA:

      "He gave inconsistent answers when questioned by police about how he got into the building, which is secured 24 hours a day and requires a key card to gain entrance, court papers said."

  • Am I the only one who can foresee the best newspaper headline: "Chinese Dong caught 'doing business' behind Laptop" I'm just saying...
  • ... PERFECT name for a porn-film body double.
  • by thomastan ( 4043595 ) on Wednesday September 20, 2017 @12:29PM (#55232623)
    You cannot get dual citizenship with China. Is this article accurate/believable?
    • by Anonymous Coward on Wednesday September 20, 2017 @01:01PM (#55232817)

      are you sure?

      From wikipedia(https://en.wikipedia.org/wiki/Nationality_law_of_the_People's_Republic_of_China#Loss.2C_termination_and_renunciation_of_nationality):

      "Also, Article 9 explicitly states that only Chinese nationals residing abroad who voluntarily acquires another country's citizenship shall be deemed as forfeiture of Chinese nationality. As a result, a Chinese national residing in China with no permanent residency in any foreign countries who obtains economic citizenship in another country does not lose Chinese nationality."

      meaning if you buy your 2nd nationality then you do not need to forfeit your chinese nationality.

      also for example: http://ipdpropertygroup.com/ci... [ipdpropertygroup.com]

    • The guy's a spy. His Canadian passport is either an excellent fake, or completely genuine and authorized by the Chinese government.

  • by Herkum01 ( 592704 ) on Wednesday September 20, 2017 @12:35PM (#55232679)

    Looking at the title I read it as CEO was caught downloading "Stranger After Hours" as a TV show being leaked online.

  • by LeftCoastThinker ( 4697521 ) on Wednesday September 20, 2017 @12:45PM (#55232719)

    The US needs to make China aware that this state sponsored economic terrorism will no longer be tolerated. I vote that every time there is a theft of US technology, we VOID $10 billion (minimum) of US treasuries held by China. Make it $50 billion if it is a military contractor. If they want to steal our technology, they are going to pay out the ass for it. If they run out of US debt, start putting a 1% tariff on all goods imported for a year, per incident. Watch companies start to flee China as the cost of producing goods there to import to the US skyrockets while the Chinese economy craters.

    We cannot survive as a nation with the parasite of China continuously stealing our manufacturing, manipulating trade deficits and now stealing our technology. We either have to change or we are going to collapse.

    And to all you globalists out there rooting for the US to fail, I hope you like living under a jack booted dictatorship with zero freedom and can speak Russian or Mandarin, because that is what will happen to you about 10 days after a US collapse.

    • by wickerprints ( 1094741 ) on Wednesday September 20, 2017 @01:04PM (#55232837)

      While I agree with the principle of some form of financial/economic penalty along the lines of what you propose, I am unclear as to how this could be implemented effectively.

      The problem with simply voiding any US debts to China (or any other sovereign nation) because we catch their agents committing corporate or military espionage, at least in my own naive understanding, is that it basically sends a signal to the world that the repayment of our debts is conditional and uncertain: should the US government simply decide "we don't like something you're doing so we will refuse to pay you back," this would have clear repercussions with respect to the ability for the US to borrow money. It's a bit like saying that because Volkswagen was caught manipulating vehicle emissions in some of their models, you don't have to pay back the loan on your vehicle whose emissions are compliant and therefore whose market value was not affected. There's no contractual basis for that unilateral decision on the borrower's part.

      But again, I absolutely agree that such flagrant actions (and let's be real here, there is and has been widespread and pervasive and extremely successful corporate espionage committed by China for decades) should be punished so severely that it should cost significant amounts of money to ensure mere compliance. I just don't know how it could be done.

      • The problem here is that this is a state actor being caught out. The effective kinds of penalties in this situation would be tantamount to self harm. That is, the only thing that would stop China from doing this would be to cut economic ties with them. Of any kind. And that is literally cutting our nose off to spite our face. We and by this I mean the global community are tied too deeply to one another economically to try and isolate a nation as large and as prosperous as China currently is. It's also of du

      • by swb ( 14022 )

        The sword of Damocles works because it hangs, not because it falls.

        The *potential* for voiding Chinese holdings of US treasuries should be held over them not because it's effective in any small case, but because it's an existential threat against any large-scale Chinese sell-off or other manipulation based on them.

        We could void them selectively if we wanted, but ultimately the market would just price in that risk and raise interest rates.

        • by tlhIngan ( 30335 ) <slashdot AT worf DOT net> on Wednesday September 20, 2017 @02:04PM (#55233263)

          The sword of Damocles works because it hangs, not because it falls.

          The *potential* for voiding Chinese holdings of US treasuries should be held over them not because it's effective in any small case, but because it's an existential threat against any large-scale Chinese sell-off or other manipulation based on them.

          We could void them selectively if we wanted, but ultimately the market would just price in that risk and raise interest rates.

          That's exactly what happens. Right now, people love US debt because in general, the US is a very trustworthy country that will repay the debt.

          Threaten to invalidate that debt (i.e., fail to repay) and the US goes from "trustworthy" to "banana republic" - think of other countries failing to repay debt (like say, Greece). This means any time the US wants to borrow money, people will require a higher interest rate just because they're not sure the US will repay it.

          It's just like a credit rating - most first world nations are generally quite good - AAA+ or so, which means they're low risk, and thus low interest. But it's a great place to park money you're not using - a safe investment and it also gets money flowing and economy humming. But do something like fail to pay a debt, or threaten to do so and you lose the nice credit rating and creditors will demand more money to cover the risk.

          Yes, even personal loans work this way - that's why there are companies like Equifax making lots of money storing your credit history - the repayment rate is what determines if the bank will let you have the loan.

          • by swb ( 14022 )

            I'm not entirely sure it would *ruin* Treasuries to void select quantities for specific political reasons (versus other reasons for non-payment). One other reason they're popular is its a nearly bottomless well of liquidity that cash can be pumped into and back out of.

            It's an open question whether it's seen as a bottomless pit of liquidity because we don't play games with our bonds or because the US economy and government is such a giant player that there are no other equal places to put cash.

            The Euro was

            • by tlhIngan ( 30335 )

              I'm not entirely sure it would *ruin* Treasuries to void select quantities for specific political reasons (versus other reasons for non-payment). One other reason they're popular is its a nearly bottomless well of liquidity that cash can be pumped into and back out of.

              It's an open question whether it's seen as a bottomless pit of liquidity because we don't play games with our bonds or because the US economy and government is such a giant player that there are no other equal places to put cash.

              The Euro was s

          • Except that unlike debt, this is a state taking money from another state based on a defined law to penalize and recover damages for state sponsored stealing. The analogy would be if you borrowed $100k from a bank and then 3 weeks later the bank employees come to your house and steal your car (and in China's case, your boat, your RV, your motorcycle, the solar panels off your roof, the siding off your walls and damn near everything else that isn't bolted down).

            You take them to court and get the value of the

            • No, because the bank would disown its employees. China would disown its "agents" which are dual citizens, sympathizers or mercenaries.

              Now if you could prove beyond doubt that the bank's management was instrumental in sending the employees for stealing any car, it might work. But you'll have to do it in a court of law of which the bank falls under the jurisdiction.

              That doesn't work against China because they do not fall under any court's jurisdiction. ICJ is a joke. You could sue China in Chinese courts, but

      • Canada better fucking rescind his Canadian citizenship and take a look at all parties involved in his application. It's one thing for CSIS to monitor them, it's another to let them get away with shit.
      • Yes and no. The risk to an individual investor or bank in say Europe or Canada that his/her US treasury will be voided is nil, and thus the treasury rates wouldn't be affected, since good faith investors would not have any additional risk. However in the case of government level investment for the purpose of manipulation, like China, it flips the risk/reward for corporate espionage and the original intent of buying US treasuries (to have leverage over the US government/economy).

        OTOH, an automatic 1% impor

    • Theft is now terrorism?

      Trade secrets aside, manufacturing relocation and trade deficits don't work the way most people think.

      There's this thing [wordpress.com] but I think the numbers are slightly-off. 18% is a lowball figure for payroll costs (usually taxes and benefits are more like 40%-60% of payroll; wages make up the rest).

      The tl;dr is that cutting off Chinese manufacture and producing (in this example) trousers in the United States would create few net jobs if wages were very low in the factories; loses more

      • Don't think your logic parses, Bluefox.

        US stops trading with China and nets a bunch of crappy low-wage jobs making things the chinese currently make for cheap.

        Price in US market for certain goods goes up because US has labor laws and minimum wage, which result in more expensive products. Consumers get poorer because they can no longer buy cheap plastic toys and baby food with lead additives.

        Therefore US loses jobs? This does not follow. Your argument fails and you're trying to hide your BS logic in
      • You are assuming that we do things the same way in the US that they do in China where labor is cheap. If US companies lose China as a source of cheap labor, they will hire a big team of engineers to design and build the robotics/automation necessary to make their goods economically in the US. Quality goes up, global pollution goes down, the jobs created are fewer than in China, but high paying engineer jobs, middle class wage technicians and operators, final cost of goods actually goes down, since robotic

        • You are assuming that we do things the same way in the US that they do in China where labor is cheap. If US companies lose China as a source of cheap labor, they will hire a big team of engineers to design and build the robotics/automation necessary to make their goods economically in the US.

          You assume China isn't doing things as cheaply as possible. China is highly-interested in and heavily-invested in the forefront of manufacture technology, and wants to automate their factories as soon as the technology is cheaper than labor.

          If you don't automate your factories because your labor is $3/hr and the automation is equivalent to $7/hr, then moving the factories to an $8.25/hr-plus-benefits (about $11.50/hr) labor country and automating means you're running at the equivalent of $7/hr labor. Th

    • by sfcat ( 872532 )

      The US needs to make China aware that this state sponsored economic terrorism will no longer be tolerated. I vote that every time there is a theft of US technology, we VOID $10 billion (minimum) of US treasuries held by China. Make it $50 billion if it is a military contractor.

      You do realize that this would likely destroy the US's ability to raise capital (sell t-bonds) internationally. Not sure your plan would work as you envision.

      • Because who besides China and Russia are investing in US treasuries while simultaneously engaged in state sponsored corporate espionage against US firms with no laws against such activity?

        If you are a country of moral laws (i.e. it is illegal to steal other people's shit) you have nothing to worry about. If China and Russia stop stealing our shit, they have nothing to worry about. Make nice with everyone or get the shaft, that is the way the world works everywhere else...

        Really, it is either this approach

    • > We cannot survive as a nation with the parasite of China continuously stealing our manufacturing, manipulating trade deficits and now stealing our technology. We either have to change or we are going to collapse.

      Your consumer, debt-based, buy shit i don't need with money i don't have economy cannot survive without China and it's DIRT cheap crap they export to you.
      China can survive without you considering how massive China, and Asia in general is, and how less they care for you.

      This is why the west will

      • Maybe try learning to write in complete sentences, and the difference between your and you're? They make your post very difficult to read.

        The majority of stuff we buy from China falls into two categories, cheap garbage that just ends up in the landfill in less than a year that has preexisting higher quality/higher cost alternatives made in the US/Europe already. The other category is things designed in the US that we have China manufacture for us (i.e. the iPhone, microchips, etc.) because it is cheaper t

  • Source https://www.bostonglobe.com/me... [bostonglobe.com] (paywall link) (disclaimer, I work for The Boston Globe)...

  • Am I the only one who keeps reading the CEO's name as Scarface? Because we know how that guy welcomes unexpected visitors, by introducing them to his little friend.

  • The thing I found interesting is that when they searched his car, the guy seems to have had one of every kind of storage device known to man in it. Now I'm a professional software engineer, and yes, when I travel on business I travel with gear, including usually one or two USB sticks and a laptop, but this was ridiculous:
    • 128GB USB Ram stick
    • Another thumb drive of unreported size
    • 10 SIM cards
    • 1 SD card
    • 2 Micro SD cards
    • 2 portable hard drives
    • *TWO* digital camcorders
    • Is there an engineer here who can honestly say

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