This starts off as one of those quintessential American success stories. It finishes with a criminal conviction. In between is not merely a story but a life — which may well end in prison.
A Quarter of a Century on the Job
In the 1960s, Wen Chyu Liu, aka David W. Liou, came to the United States from China as a graduate student. In 1965, Liu started working as a research scientist at Dow Chemical Company’s Plaquemine, La., facility.  At Plaquemine, Liou worked on various aspects of the development and manufacture of Dow elastomers, including Tyrin CPE.
Dow is a leading producer of chlorinated polyethylene (CPE), an elastomeric polymer. Dow’s Tyrin CPE is used in a number of worldwid applications, such as automotive and industrial hoses, electrical cable jackets and vinyl siding.
By 1992, after more than a quarter of a century in Dow’s employ, Liou resigned. This should have been a time for sitting back, taking it easy, and enjoying the fruits of a lifetime of hard work. Instead, the government alleges that Liou embarked upon a second career that would take him down a very dark and twisted road.Â
Indictment
On March 24, 2005, a federal grand jury indicted Liou on 15 counts that charged him with conspiracy, receipt and possession of stolen trade secrets, wire fraud, illegal monetary transactions, and perjury. On August 22, 2006, Liou was arrested in Seattle, WA on an intercontinental flight from Taipei, Taiwan. If fully convicted on all counts, he faced up to 300 years in prison, and nearly $10 million in fines or twice his gross gain (whichever is greater).
According to the indictment, Liou conspired with at least four current and former employees of Dow’s facilities in Plaquemine and Stade, Germany, who had worked in Tyrin CPE production. This conspiracy’s goal was to misappropriate trade secrets in an effort to develop and market CPE process design packages to various Chinese companies.  As part of the enterprise, Liou traveled extensively throughout China to market the stolen information, and he paid current and former Dow employees for Dow’s CPE-related material and information.  In one instance, Liou bribed a then-employee at the Plaquemine facility with $50,000 in cash to provide Dow’s process manual and other CPE-related information.
Perjury
When eventually confronted during a deposition as part of a Dow federal civil suit against him, Liou falsely denied under oath that he made arrangements for a co-conspirator to travel to China to meet with representatives of a Chinese company interested in designing and building a new CPE plant. Thereafter, federal criminal charges ensued.
Conviction
On February 7, 2011, after a three-week trial, a federal jury in Baton Rouge, La. convicted Liou, 74, of one count of conspiracy to commit trade secret theft and one count of perjury in connection with his theft  trade secrets from Dow Chemical Company and selling them to companies in the People’s Republic of China. He now faces a maximum of 10 years in prison on the conspiracy to commit trade secrets theft charge, and a maximum of five years in prison on the perjury charge.  Each count also carries a maximum fine of $250,000.
Advocacy group Free Press is alleging that a Californian company has been helping the Egyptian government inspect the contents of email, Twitter and Facebook messages.
IP network traffic intelligence company Narus – owned by Boeing –Â counts Telecom Egypt amongst its customers. And Free Press claims that it’s been using Deep Packet Inspection (DPI) to help the government eavesdrop on communications and even track cellphone users via GPS coordinates and SMS messaging.
Using DPI, it’s possible to reconstruct emails and attachments, see what web pages a user has clicked on and reconstruct voice-over-IP phone calls.
“What we are seeing in Egypt is a frightening example of how the power of technology can be abused,” says Free Press campaign director Timothy Karr.
“Commercial operators trafficking in Deep Packet Inspection technology to violate internet users’ privacy is bad enough; in government hands, that same invasion of privacy can quickly lead to stark human rights violations.”
Narus’ NarusInsight system is used by the US National Security Agency for surveillance of internet communications. And Free Press is calling for the US Congress to establish transparent standards for the use of DPI technology in order to preserve human rights.
“The harm to democracy and the power to control the internet are so disturbing that the threshold for the global trafficking in DPI must be set very high,” says Karr.
The US Federal Bureau of Investigation is probing a series of cyber-espionage attacks on at least five major oil, gas and petrochemical companies by hackers based in China.
The attacks, which began more than a year ago and are continuing, have succeeded in capturing sensitive financial information, including plans for bidding on drilling rights in specific fields, and production information, such as the configuration of equipment.
Such data would be worthless to most people but highly valuable to competitors in the industry, suggesting an economic motive for the intruders. The penetration followed a similar pattern at all of the targets identified so far and appeared to have been conducted by a group of a dozen or fewer people working from about 9am to 5pm Beijing time during the week.
“These were company worker bees, not freestyle hackers”, said Dmitri Alperovitch, a researcher at Intel (NASDAQ: INTC – news) -owned antivirus firm McAfee (NYSE: MFE – news) and a contributor to a white paper on the campaign being published on Thursday.
Mr Alperovitch said he and his colleagues had briefed the FBI and that the agency was investigating.
“We are aware of the threat to the oil and gas industry” from cyber-espionage, said FBI spokeswoman Jenny Shearer, adding that she could not confirm or deny specific inquiries.
The National Cyber-Forensics Training Alliance, a US non-profit that works with private companies as well as law enforcement and academia, has also been researching the case, and group chief executive Rob Plesco said it was the first that he knew of against the oil and gas industry.
Mr Plesco praised McAfee for going public with a description of the attacks on its clients, since targeted companies themselves rarely confess to such breaches and they can serve as an effective warning.
According to the white paper and Mr Alperovitch, the attacks began with an assault on the companies’ external websites using a common technique known as ‘SQL injection’, named after holes in the Structured Query Language used to communicate with databases. Hacking tools readily available on underground forums in China were then used to gain access inside the company’s servers, and automated cracking techniques gave the intruders user names and passwords.
The hackers then installed software to control the compromised machines and sent off e-mails and targeted documents to internet addresses in China.
They used previously known software flaws and did not go to great lengths to cover their tracks, the researchers found.
Such attacks are commonplace in many industries, investigators and law enforcement officials say, but are rarely divulged or explained.
TAIPEI (AFP) – A Taiwanese general detained in what could be the island’s worst espionage case in 50 years was lured by sex and money offered by a female Chinese agent, media reported Thursday.
Army major general Lo Hsien-che was allegedly recruited while stationed in Thailand between 2002 and 2005, drawn in by a honeytrap set by the agent, then in her early 30s, said the China Times, citing unnamed sources.
“Lured by sex and money offered by the spy, Lo was recruited by China to supply top secret information he handled,” the paper said.
The woman, described by the paper as “tall, beautiful and chic,” held an Australian passport and initially pretended to be working in the export and import trade when she met Lo, who was already married, the paper said.
Lo, now 51, started to collect secrets for her in 2004 and received up to $200,000 at a time for his services, eventually pocketing as much as $1 million from China, it said.
Although he returned to Taiwan in 2005, Lo continued working for China and kept meeting the woman in the United States, where he handed over more confidential information to her, it added.
Lo had managed to keep his activities under wraps and pass repeated loyalty checks and was promoted to a major general in 2008, according to the paper.
He was head of the army’s telecommunications and electronic information department when he was arrested last month, according to the defence ministry, which declined to comment on the report.
Military officials have called the scandal the worst Chinese communist espionage case in the past half century, given the sensitive affairs that Lo had access to.
“We do not know the relevant circumstances,” said a spokesman for the Taiwan Affairs Office in Beijing when asked to comment on the case.
China’s state-controlled Global Times tabloid quoted Li Fei, a Taiwan expert at southeast China’s Xiamen University, as saying the two sides of the Taiwan Straits are still actively spying on each other.
“Espionage activities have never ceased, even though cross-Straits tensions have eased over the years,” he said, adding agents no longer targeted only military secrets, but also economic and technological intelligence.
Taiwan’s military, which has set up an ad hoc group for damage control, warns that China has not stopped infiltrating into Taiwan despite warmer relations in recent years.
Lo’s arrest came amid fast-warming ties between Taipei and Beijing following the 2008 election of Beijing-friendly Ma Ying-jeou as president.
Taiwan and China have spied on each other ever since they split in 1949 at the end of a civil war. Beijing still regards the island as part of its territory awaiting reunification, if necessary by forc
LONDON – British police revealed Wednesday it would contact thousands of people whose cell phones may have been targeted by the News of The World tabloid, an indication of the scale of the scandal at the heart of Rupert Murdoch’s media empire.
Police have long insisted only a small number of people were believed to have been have been spied upon by the tabloid, which employed a private detective to break into the voice mail boxes of the paper’s targets and eavesdrop on their private messages.
But that contention has been challenged by lawmakers, fellow journalists and former employees of the News of The World, who have claimed that the practice was widespread. There have also been allegations that police were hiding the full scale of the phone hacking operation for fear of jeopardizing its relationship with the politically powerful tabloid.
The police have denied those claims, but the force has long been cagey about who exactly was targeted — and how many individuals were involved. Alleged victims of the hacking include model Elle MacPherson and actress Sienna Miller, and some have complained that police only gave them evidence reluctantly — fueling allegations of a cover-up.
Police said they were taking a “fresh approach” to informing people whose names appeared in documents taken from The News of The World’s private investigator, Glenn Mulcaire.
“With this new investigation, we will be as open as we can be and will show them all the information we hold about them, while giving them the opportunity to tell us anything that may be of concern to them,” Deputy Assistant Commissioner Sue Akers said.
Police have previously said around 3,000 cell phone numbers were recovered over the course of their investigation into the hacking, although police cautioned that did not necessarily mean that they were all targeted. Akers made clear that every one of the people connected to those numbers would be informed.
“In time, we will … make contact with everyone who had some of their personal contact details found in the documents,” Akers said.
John Prescott, a former deputy prime minister who believes the tabloid used phone hacking to get a story about his extramarital affair, said that in a meeting with Akers Wednesday he was told police now had “significant new evidence” relating to his claim that he had been a hacking victim.
“I now look forward to the police finally uncovering the truth,” he said in a statement.
