U.S. Accuses Chinese Executive of Hacking to Mine Military Data

The Justice Department has charged the owner of a Chinese aviation technology company with stealing reams of information from U.S. defense contractors about key American technology—the latest in an effort to criminally prosecute what American officials allege is rampant Chinese industrial espionage.

The charges against Su Bin, a Chinese citizen living in Canada, shed new light on an alleged hacking ecosystem that officials have long said poses a threat to many U.S. companies.

Tensions between the U.S. and China over cyberespionage remain high. Secretary of State John Kerry, visiting China this week, raised the “chilling effect” hacking has on U.S. firms. The Chinese, in turn, see themselves as victims of cyberespionage. On Friday, state broadcaster China Central Television called a location-tracking function offered by Apple Inc. AAPL +1.69% ‘s iPhone a “national security concern.”

Prosecutors in Los Angeles unsealed a 50-page complaint accusing Mr. Su of working with two co-conspirators in China between 2009 and 2013 to break into computers at Boeing Co. BA +1.26% and other defense contractors, steal technology and pass it to entities in China, sometimes for a price.

It is unclear what data, if any, Mr. Su allegedly eventually sold into China. But the hackers boasted about the heist in internal memos, suggesting someone benefited from the data.The government says it didn’t find evidence indicating whether Mr. Su took classified information, though the complaint said some of the data was subject to laws that restrict the export of military technology.

Boeing said it was informed by the FBI and Air Force investigators of the alleged breaches in 2012 and was continuing to cooperate with authorities. Lockheed said it is cooperating with the U.S. government.

Boeing delivered the first C-17 to the U.S. Air Force in 1993. The four-engine jet, able to carry troops and equipment to and from small airfields, won overseas orders from allies including the U.K., Australia and Canada.

But after a dearth of new orders, Boeing said last year it would end production and close the Long Beach, Calif. factory that assembles the jet in 2015.

China’s state-controlled Xian Aircraft Corp. is developing its own four-engine military cargo jet, dubbed the Y-20, that flew for the first time last year. Western defense experts have said the plane bears similarities to the C-17, though other military transport planes also share attributes.

Any security breaches involving fighter jets are likely to cause more alarm. Pentagon officials have in recent months expressed concerns that the U.S. is losing its technological superiority in some areas.

“We remain deeply concerned about cyber-enabled theft of sensitive information,” a Justice Department spokesman said. “The conspirators are alleged to have accessed the computer networks of U.S. defense contractors without authorization and stolen data related to military aircraft and weapons systems.”

source: ANDREW GROSSMAN & DANNY YADRON /Wallstreetjournal