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U.S. Accuses Chinese Duo of Stealing Secrets, Spying on GE

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A former engineer and a Chinese businessman have been charged with economic espionage and conspiring to steal trade secrets from General Electric to benefit China, according to an indictment unsealed by the U.S. Justice Department on Tuesday, Reuters reported.
The indictment against the former GE engineer, Xiaoqing Zheng, and Chinese businessman Zhaoxi Zhang, comes after Zheng was initially charged in August in connection with the alleged theft. It marks the first time the U.S. government has formally said the scheme was carried out to benefit China and that the Chinese government provided “financial and other support.”

According to the indictment, Zheng stole the proprietary data on GE’s turbine technology by encrypting the files on his computer and secretly embedding them into a digital photograph of sunset before emailing the photograph to his personal email.

Zheng, 56, pleaded not guilty on Tuesday and was allowed to remain free on bond. His attorney Kevin Luibrand declined to comment.

The charges are the latest in a handful of cases brought by the Justice Department since last year as part of a broader crackdown by the Trump administration, which has vowed to fight Chinese theft of corporate secrets, cheating through intellectual property theft, illegal corporate subsidies and the use of rules that hamper U.S. corporations that want to sell their goods in China.

The FBI has said in the past that nearly every one of the agency’s 56 field offices have investigations into economic espionage tied to China.

The 14-count indictment against the pair charges that Zheng, who worked at GE Power & Water in Schenectady, New York, stole multiple electronic files containing details about design models, engineering drawings and other specifications related to the company’s gas and steam turbines.

Prosecutors say he emailed the files to Zhang, who was located in China. GE said in a statement it has “been in close cooperation with the FBI and the U.S. Attorney’s Office for some time on this matter.”

The two men allegedly used the stolen information to advance their own business interests in two turbine research and development companies – Liaoning Tianyi Aviation Technology Co Ltd and Nanjing Tianyi Avi Tech Co Ltd.

The indictment adds that the pair received financial and other support from the Chinese government through those two companies, and they coordinated with Chinese government officials.

According to the indictment, Zheng told GE in February 2016 that he was operating an aviation parts supply company in China with his brothers, and asked permission to ensure it did not violate any rules about conflicts of interest. GE approved his proposal, asking that he protect the company’s intellectual property, Reuters writes.

About a year later, around November or December 2017, GE discovered a large number of encrypted files saved on Zheng’s computer. By July 2018, the company learned he had embedded the files in the seemingly innocuous photo of a sunset and emailed them to himself.

In interviews with the FBI in August 2018, prosecutors said he admitted to taking GE files. He also told agents his companies in China had received grant money from the Chinese government.

Zheng and Zhang, 46, were formally indicted on April 18. A jury trial has been set for June 24 in Albany, New York. Zhang was believed to be in China, the Justice Department said, Reuters adds.

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Iran Blocks Nearly All Internet Access

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Iran imposed an almost complete nationwide internet blackout on Sunday one of its most draconian attempts to cut off Iranians from each other and the rest of the world as widespread anti-government unrest roiled the streets of Tehran and other cities for a third day, The New York Times reported.

The death toll for the three days of protests rose to at least 12; hundreds were injured; and more than 1,000 people have been arrested, according to semiofficial news agencies like Fars News.

Iranian Supreme Leader Ayatollah Ali Khamenei, who has the last word on all state matters, called the demonstrators “thugs” and endorsed the government’s decision to raise prices it sets for rationed gasoline by 50 percent as of Friday and by 300 percent for gasoline that exceeds ration limits. Even after the price hike, gasoline in Iran is still cheaper than in most of the rest of the world – now the equivalent of about 50 cents a gallon.

In a speech on Sunday, Khamenei said he would support rationing and increasing gas prices because heads of three branches of government had made the decision.

Khamenei also acknowledged that Iranians had taken to the streets to protest and that some had died – however, he blamed the protests on monarchists and opposition groups trying to destabilize Iran, the Times added.

The widespread discontent on display across the country marked yet another crisis for the country. Iran has been struggling with an economic crisis after the United States exited a nuclear deal and reimposed harsh sanctions that ban Iran’s oil sales.

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HASC Chairman Claims Legislation to Create a Space Force in 2020 ‘Still Possible’

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House Armed Services Committee Chairman Adam Smith said last week that negotiations on the 2020 National Defense Authorization Act are “proceeding reasonably well” but he expressed doubt that the NDAA will include language to authorize a Space Force as a separate military branch, SpaceNews reported.

“It’s still possible but by no means guaranteed,” Smith told reporters on Capitol Hill last week. When asked for specifics, Smith said, “I don’t think it would be helpful for me to make predictions.”

The biggest sticking point in the NDAA negotiations is language in the House version of the bill that restricts the use of military funds to pay for the wall that President Trump wants to build along the U.S.-Mexico border, SpaceNews adds.

There are other dealbreaker issues. The authorization of a Space Force as the sixth branch of the armed forces is one of them, Smith said. Other contentious matters include extending the “war powers” legislation that authorizes the president to use military force, and allowing transgender people to serve in the military.

Smith said the House and Senate NDAA conference in recent weeks worked on compromise language on hundreds of provisions and “reduced the stack significantly, and we’re down to a few really contentious issues.”

Smith characterized the Space Force as a “higher echelon” issue that is proving divisive. Both Republicans and Democrats in the House and Senate continue to have reservations about the administration’s Space Force proposal, said Smith. “There is bipartisan concern on the proposal and bicameral concern about the specifics of that proposal.”

The House version of the NDAA creates a Space Corps and is closer aligned with what the administration proposed. The Senate bill would rename the Air Force Space Command the U.S. Space Force and does not specifically authorize a sixth branch of the armed forces.

Smith noted that the House has been a proponent of a military space branch since 2017 while the Senate had adamantly opposed it. “In their bill they didn’t have the same language that we did. But the president has persuaded them to look at it differently.”

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Gunman Kills Four at California Backyard Party

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Police in the California city of Fresno were investigating a mass shooting at a football game party on Sunday in which at least 10 people were shot, killing four, with five others left in critical condition and another wounded, Reuters informs.

Three men died at the scene and another died at a hospital, Fresno Deputy Police Chief Michael Reed said in a late night news conference. Six more were hospitalized, he said.

“Our hearts go out to the families of the victims of this thing,” Reed said. “This was senseless violence. We’re going to do everything we can to find out who the perpetrators were and bring them to justice.”

A gunman walked into a backyard and started shooting at a south Fresno home, where a gathering of about 35 family and friends was watching a football game before 8 p.m., said Reed. Neighbors soon flooded 911 dispatchers with calls for help, Reuters adds.

The suspect fled the scene and police were combing the neighborhood for witnesses and possible security camera footage, police said. Police did not release further information about the shooting in the city about 200 miles (320 km) north of Los Angeles, except that the dead were men between the ages of 25 and 35.

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