MIT Professor Charged with Fraud in Chinese Trade Secret Theft Case

January 15, 2021 by Tom Ramstack
Professor Gang Chen. (Photo courtesy MIT.edu)

A Massachusetts Institute of Technology professor is facing federal fraud charges after allegedly lying about transferring nanotechnology research to organizations associated with the Chinese government.

On grant applications and tax forms, MIT professor Gang Chen allegedly did not disclose that he had received $29 million from Chinese research programs, according to the Justice Department.

The incident is another example of conflicts with China over what the U.S. government describes as stolen technology.

“The Chinese government would rather siphon off U.S. technology rather than do the work themselves,” U.S. Attorney Andrew E. Lelling said at a press conference Thursday.

At the same time Chen, 56, was receiving $19 million in grants from various U.S. agencies to assist his research, he also was being paid by Chinese research and national talent programs designed to attract foreign expertise, the prosecutors’ complaint says.

“Through these various undisclosed appointments, Chen has sought to advance the scientific and technological development of the [People’s Republic of China] by providing advice and expertise — sometimes directly to PRC government officials — often in exchange for financial compensation and awards,” the complaint filed in federal court in Massachusetts says.

Nanotechnology refers to equipment and techniques to control individual atoms and molecules, especially to manufacture computer chips and other microscopic devices.

The Justice Department criminal complaint says Chen, a naturalized American citizen, was hired by the government-managed National Natural Science Foundation of China as an adviser to its “Outstanding Talent Plan.” The program identifies exceptional students seeking admission to the best U.S. universities.

He failed to disclose the potential conflict of interest to MIT or in his U.S. grant applications to the Energy Department, prosecutors said. He also did not mention on his tax forms that he held a Chinese bank account with more than $10,000 in it, they said.

His attorney, Robert Fisher, a partner with the law firm of Nixon Peabody LLP, told The Well News, “Since Gang moved to this country over 30 years ago, his life has been the epitome of the American dream. He has dedicated his life to scientific advancement in mechanical engineering. He loves the United States and looks forward to vigorously defending these allegations.”

MIT, where Chen has worked since 2001, said in a statement, “We take seriously concerns about improper influence in U.S. research. Professor Chen is a long-serving and highly respected member of the research community, which makes the government’s allegations against him all the more distressing.”

In a similar case last year, the Justice Department filed charges against Harvard University professor Charles Lieber after accusing him of fraudulent statements in his affiliations with a Chinese research university. He was chairman of the university’s chemistry and chemical biology department as well as a leading nanotechnology expert.

Justice Department officials said the Chinese attempts in both cases to gain inside information on U.S. nanotechnology were not coincidence.

“The Chinese government has identified nanotechnology as one of its strategic gaps,” Lelling said at the press conference Thursday. “The purpose of these Chinese talent programs is so the Chinese can fill those gaps without developing the technology themselves.”

President Donald Trump repeatedly has mentioned threats to U.S. intellectual property rights as he sought to crack down on what he described as China’s unfair trade practices. He also said the information leaks threaten national security as China uses the technology to increase its military capabilities.

A May 29, 2020 White House “Fact Sheet” said, “China’s theft of American technology, intellectual property and research threatens the safety, security, and economy of the United States.”

Trump signed a trade deal with China on Jan. 16, 2020 intended to protect U.S. trade secrets from foreign businesses. 

It called on China to develop an “action plan” to strengthen intellectual property rights. China also agreed to purchase $200 billion in U.S. goods over the next two years as a response to complaints about American businesses being shut out of its markets.

However, the deal failed to silence all complaints about technology and trade secret thefts.

John Demers, the Justice Department’s head of its National Security Division, described threats from China’s appropriation of U.S. technology at an Aug. 12, 2020 event sponsored by the Center for Strategic and International Studies in Washington, D.C.

He said 80 percent of economic espionage and 60 percent of trade secret theft cases investigated by the Justice Department could be traced to China.

Typically, the Chinese infiltrators steal American trade secrets, reproduce them first for their own market and then try to compete with U.S. companies that originated the technology in the global marketplace, Demers said. Some of the Chinese firms operate with government subsidies.

In the past seven years, China’s attempts to acquire American intellectual property have shifted from the People’s Liberation Army to clandestine intelligence operations focused on recruiting insiders at U.S. corporations, he said.

The Justice Department case against Chen is filed as U.S. v. Chen, case number 1:21-mj-01011, in the U.S District Court for the District of Massachusetts.

Criminal Justice

Whitmer Signs Order Establishing Michigan Forensic Science Task Force
In The States
Whitmer Signs Order Establishing Michigan Forensic Science Task Force
April 2, 2021
by Reece Nations

LANSING, Mich. — Michigan Gov. Gretchen Whitmer signed an executive order Friday instituting a forensic science task force as an advisory body within the Michigan Department of State Police.  The task force’s role will be to provide recommendations to improve the use of forensics as a... Read More

Jan. 6 Insurrectionists May Get No More than Slap on the Wrist
Criminal Justice
Jan. 6 Insurrectionists May Get No More than Slap on the Wrist
March 30, 2021
by Tom Ramstack

WASHINGTON -- Arrests of Jan. 6 insurrectionists at the U.S. Capitol are continuing this week even as the zeal to throw the defendants in prison with severe sentences begins to subside or run into stumbling blocks of criminal law. In the few weeks after the violent... Read More

Justices May Reinstate Death Sentence for Boston Marathon Bomber
Supreme Court
Justices May Reinstate Death Sentence for Boston Marathon Bomber
March 22, 2021
by Dan McCue

WASHINGTON - The U.S. Supreme Court on Monday agreed to consider reinstating the death sentence for Boston marathon bomber Dzhokhar Tsarnaev.  As is their custom, the justices did not explain their rationale for taking up the appeal filed by the Trump administration, but the decision presents... Read More

Jail Suicide Rates High Due to Inadequate Mental Health Care
Criminal Justice
Jail Suicide Rates High Due to Inadequate Mental Health Care
February 26, 2021
by Daniel Mollenkamp

The failure of the prison system to provide adequate mental health care is causing people to kill themselves at high rates, according to a new report.  The report, published in February in the peer-reviewed journal The Lancet, reviewed data from 27 countries, concluding that some of... Read More

Northam to Sign Death Penalty Repeal Bill
In The States
Northam to Sign Death Penalty Repeal Bill
February 22, 2021
by TWN Staff

RICHMOND, Va. - Virginia lawmakers gave final approval Monday to a bill that will end capital punishment in the Commonwealth. The legislation now heads to Democratic Gov. Ralph Northam, who has said he will sign it into law, making Virginia the 23rd state to stop executions.... Read More

Biden Signs Executive Order to End Corporate Prisons
Criminal Justice
Biden Signs Executive Order to End Corporate Prisons
January 27, 2021
by Tom Ramstack

WASHINGTON -- President Joe Biden issued an executive order Tuesday to end the Justice Department's use of private prisons. The order tells the Justice Department not to renew contracts with the corporations that incarcerate more than 120,000 people in the United States, or about 8.2% of... Read More

News From The Well
scroll top