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US Charges Two Hackers Linked to Chinese Intelligence

By Masood Farivar December 20, 2018

U.S. prosecutors unsealed charges on Thursday against two hackers linked to Chinese intelligence, accusing them of engaging in a campaign of computer intrusions over a 12-year period targeting technology firms that businesses and government agencies around the world hire to store, process and protect their data.

Zhu Hua and Zhang Shilong, described by officials as members of a Chinese cyber-espionage group known as APT-10 and working for China's main intelligence service, hacked computers in at least a dozen countries, giving Chinese intelligence access to confidential business information, Deputy U.S. Attorney General Rod Rosenstein said.

"When hackers gain access to (managed service providers), they can steal sensitive information that gives competitors an unfair advantage," Rosenstein said at a press conference in Washington announcing the charges. "This is outright cheating and theft, and it gives China an unfair advantage at the expense of law-abiding businesses that follow the international rules in return for the privilege of participating in the global economic system."

Companies targeted

The hackers, working in association with China's intelligence service, targeted "manager service providers" (MSPs). Those are companies that remotely manage the information technology infrastructure of U.S. government agencies, more than 45 tech companies in at least a dozen U.S. states, and governments around the world, officials said.

Zhu and Zhang remain at large. They faces charges of conspiracy to commit computer intrusions, conspiracy to commit wire fraud and aggravated theft.

The charges come against a backdrop of growing U.S. concerns about Chinese economic espionge and maliciouscyber activities and rising tensions between Washington and Beijing over trade and intellectual property theft.

Secretary of State Mike Pompeo and Secretary of Homeland Security Kirstjen Nielsen said in a statement that an escalation in cyberattacks by Chinese hackers connected to the country's intelligence service violated commitments made in 2015 by Chinese President Xi Jinping to the U.S. and other countries to refrain from engaging in cyber-espionage "with the intent of providing competitive advantages to companies or commercial actors."

"These actions by Chinese actors to target intellectual property and sensitive business information present a very real threat to the economic competitiveness of companies in the United States and around the globe," the statement said.

British foreign secretary Jeremy Hunt described the Chinese cyber campaign as "one of the most significant and widespread cyber incursions against the UK and allies," saying it violated commitments Xi made to the U.K. in a bilateral agreement.

"These activities must stop," Hunt said. "Our message to governments prepared to enable these activities is clear: together with our allies, we will expose your actions and take other necessary steps to ensure the rule of law is upheld."

Long-term effort

FBI Director Christopher Wray described the Chinese government's campaignof cyber-espionage in recent years as part of a broader, long-term effort by China to surpass the United States as a superpower.

"As evidenced by this investigation, the threats we face have never been more severe or more pervasive or more damaging to our national security, and no country poses a broader, more severe long-term threat to our nation's economy and cyber infrastructure than China," Wray said. "China's goal, simply put, is to replace the U.S. as the world's leading super power, and they're using illegal methods to get there."

The Justice Department has responded to the Chinese cyber campaign by stepping up efforts this year to investigate and prosecute Chinese nationals and others suspected of carrying out economic and cyber activities on behalf of China.

According to a Justice Department summary released on Thursday, so far this year the department has brought charges in 10 China-related cases of espionage and hacking, including three recent cases involving alleged crimes committed at the behest of a branch of the Ministry of State Security, the country's main intelligence service.

In October, U.S. prosecutors charged two Chinese intelligence officers and their recruited hackers with conspiracy to hack private companies' computer networks in the United States and overseas for more than five years.

Last week, a U.S. official said investigators believe hackers working for China's intelligence service were responsible for the data breach that resulted in the theft of personal information from 500 million guests of the Marriott hotel chain.

In the latest case, Zhu and Zhang are alleged to have "acted in association with the Chinese Ministry of State Security's Tianjin State Security Bureau" while working for a technology company.