Is brother of China’s ex-chief of staff seeking to defect to the US?

August 4, 2015 by 2 Comments

Ling WanchengA well-connected Chinese businessman, described by officials as potentially one of the most damaging defectors in the history of modern China, is reputed to have requested political asylum in the United States. Ling Wancheng, 54, is the multimillionaire brother of Ling Jihua, a close aide of China’s former premier, Hu Jintao, who rose through the ranks of the Communist Party of China to eventually lead its Central Committee’s General Office. With the help of his brother’s connections and political influence, Ling Wancheng transformed himself from a journalist to an entrepreneur in the early 2000s. Soon after receiving his graduate degree in business administration, he founded an investment firm and joined China’s nouveau riche elite. His wealth, which is estimated to be in the hundreds of millions of dollars, coupled with his older brother’s senior position within the Communist Party, made him one of China’s most politically connected entrepreneurs.

However, the Ling family’s fortunes turned dramatically for the worse in March of 2012, when Ling Jihua’s 23-year-old son was killed in a Beijing street while driving a Ferrari after a night of wild partying. Two half-naked women, who were also riding in the car, were seriously injured; one later died of her wounds. The circumstances of the crash, as well as Ling Jihua’s failed efforts to cover it up, were seen as symbolic of a spoiled generation of government officials, whose corrupt practices have isolated the Communist Party from the Chinese populace. Soon afterwards, the new administration of President Xi Jinping initiated a massive anti-corruption campaign as a means of restoring the reputation of the Communist Party. Ling was immediately demoted, cut off from the top echelons of the Chinese government, and in 2014 there were rumors that he would soon be facing a corruption investigation. In July of this year, it was officially announced that Ling had been expelled from the Communist Party and that he would be facing trial on charges of accepting bribes.

The announcement of Ling’s trial stated that he was accused of “accepting certain bribes for himself and on behalf of his family”. But no charges were filed against Ling Wancheng, and there were rumors that he was being pressured by Communist Party officials to testify against his brother. But it appears that the multimillionaire businessman, who owns several properties in the US, was able to flee China and is now in an undisclosed location on US soil. The New York Times, who tried to locate Ling earlier this week, spoke to unnamed American officials, who confirmed that he had indeed fled China and was in the US. The officials refused to confirm that Ling had applied for asylum. But they said that, if he did defect to America, Ling “could become one of the most damaging defectors in the history of the People’s Republic”, due to his political connections.

The Times added that Beijing had contacted the White House requesting that Ling be extradited to China. But the administration of US President Barack Obama appears unwilling to satisfy the Chinese government’s request, given that Chinese hackers are believed to be responsible for the recent theft of up to 24 million American government workers’ personal data.

► Author: Joseph Fitsanakis | Date: 04 August 2015 | Permalink

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CIA using Macau casinos to recruit Chinese officials, says report

July 23, 2015 by 2 Comments

Sands casino in Macau ChinaOfficials in China think that United States spy agencies are using casinos in Macau to entrap Chinese government employees, according to a report produced on behalf of an American-owned casino chain in the former Portuguese colony. The report was produced by a private investigator and was commissioned by Sands China, the Macau branch of a casino venture owned by American gambling magnate Sheldon Adelson. Its goal was to investigate why the Chinese-appointed authorities in Macau were hostile to the gambling industry in general and Sands China in particular.

The report is dated June 25, 2010, and includes a warning that it should not be shared with Chinese officials in Macau or in mainland China. It cites several unnamed officials in China’s Liaison Office, which governs Macau and Hong Kong, as well as sources in China’s Ministry of Foreign Affairs, and Chinese businessmen with close ties to the government in Beijing. It suggests that Beijing is weary of the damage caused to its public image by thousands of its employees gambling away an estimated $2 billion each year in Macau. Additionally, says the report, the central government in Beijing is hostile to the foreign-owned gambling industry in Macau because it believes that it collaborates with Western intelligence agencies. Sands China establishments in Macau, in particular, are believed by the Chinese government to be recruiting grounds for the United States Central Intelligence Agency, says the 2010 report.

Citing “well-placed sources” in the Chinese capital, the report suggests that the fear of espionage is “the primary subject” that causes Beijing’s hostility toward Sands China. It notes that “many of the [Chinese] officials we contacted were of the view that US intelligence agencies […] have penetrated and utilized the casinos [in Macau] to support their operations”. It adds that Chinese counterintelligence agencies have “evidence” that CIA operatives “monitor mainland government officials” who visit Macau to gamble, paying particular attention to those losing large amounts of money, or those visiting Macau without the knowledge of their superiors. They then “lure and entrap” them, forcing them “to cooperate with US government interests”.

The report was uncovered by the Investigative Reporting Program of the University of California Berkeley’s Graduate School of Journalism and published on Wednesday in British broadsheet The Guardian. The paper said the report was among a set of documents filed with a court in Las Vegas, where the former head of Sands’ Macau casinos is suing the company for wrongful dismissal. The Guardian contacted the Sands Company, which rejected the contents of the report as “a collection of meaningless speculation”. Its senior vice president for global communications and corporate affairs, Ron Reese, also dismissed the report as “an idea for a movie script”.

► Author: Joseph Fitsanakis | Date: 23 July 2015 | Permalink: https://intelnews.org/2015/07/23/01-1741/

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Macau authorities deny CIA tried to assassinate Snowden

April 28, 2015 by 1 Comment

PLA Macao GarrisonBy JOSEPH FITSANAKIS | intelNews.org
Authorities in the Chinese region of Macau have denied news reports that Chinese Special Forces averted an attempt by the United States Central Intelligence Agency to kill or capture American defector Edward Snowden. The reports were initially published on March 8 on the website of China News Service, China’s second-largest state-owned news agency after Xinhua. The news agency, which serves China’s Special Administrative Regions of Hong Kong and Macau, said that a secretive unit of the Chinese People’s Liberation Army held a private function to celebrate its success against an alleged attempt by the CIA to kill Snowden. The American former computer expert worked for the CIA and the National Security Agency before defecting to Russia in the summer of 2013. Prior to arriving in Russia, however, Snowden first sought refuge in Hong Kong, where he stayed until June 23.

According to Chinese media reports, the US sent a CIA assassination squad to Hong Kong in mid-June 2013, in an effort to either abduct or kill Snowden. However, the defector’s life was allegedly saved by men from the so-called “Sharp Swords” Special Forces unit of the PLA’s Macao Quick Reaction Platoon. The latter, which is part of the PLA’s Macau Garrison, had reportedly been urgently dispatched to Hong Kong by the Chinese government, in order to guard the high-profile American defector. Some reports suggest that a fierce firefight took place between the Chinese Special Forces troops and the CIA hit squad, which eventually left four CIA officers dead, including “a senior member of the CIA’s network in Hong Kong”. When Snowden transferred to Russia, the PLA unit returned to its base in Macau, where it remains today. Chinese news media alleged that a special “special event” was held in honor of the PLA unit, during which several of its members received “first-class merit awards” for protecting Snowden and neutralizing the alleged CIA operatives.

On Monday, however, the First Secretary of the Security Office of Macau, Wong Sin Chat, told local media that the reports of a PLA award ceremony were “nothing more than rumors”. He added that there had been no attempt by anyone to assassinate Snowden, and noted that, on behalf of Macau’s state authorities, he could “absolutely confirm” that the news reports had been inaccurate. Washington has yet to comment on the allegations.

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China’s once all-powerful security chief faces corruption charges

April 3, 2015 by Leave a comment

Zhou YongkangBy JOSEPH FITSANAKIS | intelNews.org
One of China’s most powerful government figures has been charged with criminal acts, including abuse of power and disclosure of state secrets, in what observers describe as an unprecedented development. At the height of his power, Zhou Yongkang, 73, headed China’s Central Political and Legal Affairs Commission, which oversees the country’s security institutions, such as the police, as well as intelligence and paramilitary organs of the state. He remained in that position until his retirement in 2012. Prior to that he was one of only 9 members of the Chinese Communist Party’s 17th Politburo Standing Committee, which serves as the country’s most senior decision-making body.

A highly decorated and immensely wealthy government bureaucrat, Zhou Yongkang has a built an entire network of allies within the ranks of China’s energy industry, from which he gradually rose to the highest echelons of power. Last December, however, state media suddenly reported Zhou’s arrest for “violations of Party discipline”, while a press release from the Communist Party announced the commencement of an investigation into Zhou and his family. Shortly afterwards, and while he was in custody, he was expelled from the Communist Party. On Thursday, a court in the northern Chinese city of Tianjin charged Zhou with using his political power and influence to turn the state agencies he supervised into tools for advancing narrow personal interests. In the process, said the court, he violated Communist Party discipline by undermining the central authority of the government and the state.

Zhou is the most senior government official to be charged with corruption since the founding of the People’s Republic of China, in 1949. Observers note that his fall from power is part of President Xi Jinping’s much heralded crackdown on government corruption, which aims to improve the popular image of the Communist Party. Others suggest that the president is also trying to consolidate his power base within the Party and dissolve networks of powerful bureaucrats that are critical of his reform plans.

Many of Zhou’s former allies and associates in government are also being investigated as part of a series of related anti-corruption probes. Many of his immediate subordinates were sacked shortly after Zhou was first detained back in December of last year.

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Was China behind mystery raids on South African nuclear facilities?

March 4, 2015 by 2 Comments

Pelindaba Nuclear Research CenterBy JOSEPH FITSANAKIS | intelNews.org
China is believed to be the culprit of a mysterious armed raid that took place at a South African nuclear facility in 2007, which has puzzled security experts for years, according to classified documents leaked to the media. The raid took place on November 8, 2007, at the Pelindaba Nuclear Research Center, located outside Johannesburg. That evening, two groups of armed assailants, later described by authorities as “technically sophisticated criminals”, skillfully deactivated numerous layers of physical security around the facility, including a 10,000-volt electrical perimeter fence. They entered the grounds of the nuclear station and fired at an off-duty night guard who saw them and tried to raise the alarm as he was leaving his post. The injured guard managed to summon a police team patrolling nearby, but by the time it arrived the assailants had managed to escape carrying with them a laptop computer stolen from the research facility’s control room. They were never caught despite an extensive investigation by South African authorities.

In the weeks following the raid, South African officials publicly dismissed the incident as the work of small-time criminals. Abdul Minty, the South African representative at the International Atomic Energy Agency (IAEA) described the raid as a “failed burglary”, while the Nuclear Energy Corporation of South Africa, which owns the Pelindaba facility, said the incident had been simply “a piece of random criminality”. One theory, which was especially popular in American media circles, was that the raid had been conducted by a terrorist group, or by an organized criminal gang employed by a terrorist group, aimed at acquiring nuclear material or designs that would enable them to build a nuclear weapon.

However, television channel Al Jazeera said recently that it had seen a copy of a secret intelligence briefing prepared by South African intelligence, in which it is stated with certainty that the 2007 raid on Pelindaba was ordered by the Chinese government. The Qatar-based news channel said the briefing related to counterespionage and was prepared in 2009. It said that the government of China had dispatched the sophisticated assailants’ team that raided the nuclear facility, and that the operation was part of an effort to steal sensitive technology that would give Beijing an advantage in building a state-of-the-art nuclear power plant as part of its Chinergy project. Chinergy is a massive collaborative effort by the Chinese government and the country’s private sector to reduce China’s reliance on coal and oil by building dozens of nuclear power plants across the country. There was no immediate comment by the Chinese and South African governments.

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North Korean hackers operating secretly in China, says defector

January 7, 2015 by Leave a comment

Shenyang railway stationBy JOSEPH FITSANAKIS | intelNews.org
An underground network of North Korean hackers are conducting complex cyberattacks against worldwide targets from Chinese cities without the knowledge of Beijing, according to a former professor who trained them. Kim Heung-Kwang was a professor of computer science in North Korean capital Pyongyang, until his defection in 2004. He told CNN on Tuesday that part of his job was training members of North Korea’s elite cyberintelligence corps, whose task was to compromise computer systems around the world. Kim alleged that some of the hackers joined a specialized outfit called Bureau 121. It was established in complete secrecy in 1995 and ten years later it began sending its operatives abroad, especially in northern China. According to Kim, Bureau 121 set up a complex network of hackers in the Chinese city of Shenyang, in northern China’s Liaoning Province. Shenyang is the largest Chinese city near North Korea, and Bureau 121 operatives were allegedly able to effortlessly blend in the sizeable Korean community there. The former professor told CNN that the hackers “entered China separately” over time, “in smaller groups […], under different titles” such as officer workers, trade company officials, or even diplomatic personnel. They operated like typical spies, working regular jobs by day and “acting on orders from Pyongyang” by night, said Kim. They gradually set up an underground “North Korean hacker hub”, operating secretly in Shenyang for several years, relocating from place to place in order to shield their activities from computer security experts. Kim told CNN that Shenyang’s bustling, money-driven life and its good Internet facilities made it easy for Bureau 121 members to work secretly on several projects that required sophisticated telecommunications infrastructure. North Korea lacks China’s telecommunications network capabilities, said Kim, which is why Pyongyang decided in the early days of the Internet to transport its hackers to Shenyang. He added that Bureau 121 has rolled back considerably its overseas operations in recent years, due to the advancement of high-speed telecommunications networks in North Korea; but some North Korean hackers are still active in northern China, he said.

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China hacking Hong Kong protesters’ smartphones, says security firm

October 3, 2014 by Leave a comment

Hong Kong protestersBy IAN ALLEN | intelNews.org
A mobile telephone security company has said the government of China is probably behind a sophisticated malware designed to compromise the smartphones of protesters in Hong Kong. Ever since the Hong Kong ‘umbrella revolution’ began to unfold, countless reports have referred to the use of smartphone applications as organizing tools by the protesters. According to one account, an application called FireChat was downloaded by more than 100,000 smartphone users in Hong Kong in less than 24 hours. FireChat is said to allow protesters to continue communicating with each other even when their individual devices are unable to connect to a mobile network. But a California-based mobile telephone security firm has warned that the Chinese government could be using such enabling applications to compromise the smartphones of pro-democracy protesters in the former British colony. Lacoon Mobile Security, which specializes in assessing and mitigating mobile security threats, said on Tuesday that it had detected several types of malware camouflaged as mobile phone applications designed to help the protesters organize. In a statement posted on its website, the security firm said that, once downloaded by a smartphone user, the malware gives an outsider access to the address book, communication logs and other private data stored on the unsuspecting user’s device. Lacoon added that what made the malware unusual was that it came in two different versions; one appears to target smartphones that run Apple’s iOS operating system, while the other is designed to compromise phones using Google’s Android software. The company noted that the types of malware that are circulating among Hong Kong protesters were some of the most sophisticated it had ever seen. They made use of a method called mRAT, which stands for multidimensional requirements analysis tool. Among other things, mRAT allows a hacker to take surreptitious pictures using the phone camera of a compromised smartphone. According to Lacoon, the design of the malware in question is so advanced that it is “undoubtedly backed by a nation state”. Read more of this post

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China charges its ambassador to Iceland with spying for Japan

September 18, 2014 by Leave a comment

Ma JisengBy JOSEPH FITSANAKIS | intelNews.org
Authorities in China have reportedly arrested the Chinese ambassador to Iceland on suspicion of spying on behalf of Japan, according to media reports. Ma Jiseng, 57, is a career diplomat who spent over eight years at the embassy of China in Japan. He was there in two separate stints, from 1991 to 1995 and from 2004 to 2008. In December of 2012, he arrived with his wife to Reykjavik, Iceland, where he assumed the post of China’s ambassador in the Nordic island nation. But, according to reports in the Icelandic media, Ma hurriedly left Reykjavik for Beijing on January 23 of this year, telling his staff that he was supposed to return in March. His wife followed him soon afterwards. Today, nearly eight months later, Ma and his wife have yet to reappear in the Icelandic capital. The plot thickened last week, when the online Chinese-language review Mingjing News published a news story claiming that Ma and his wife had been summoned back to Beijing and arrested upon arrival by Chinese authorities “for spying on behalf of Japan”. Shortly afterwards, Kai Lei, editor at the Hong Kong-based Wenweipo Chinese-language newspaper, blogged that Ma had been “arrested by [China’s] Ministry of State Security” on suspicion of “leaking international secrets to Japan”. According to the media reports, Ma was believed to have been recruited by Japanese intelligence during his second diplomatic stint in Tokyo, which lasted from 2004 to 2008. Interestingly, however, the reports about Ma’s alleged arrest began vanishing from Chinese news media websites just hours after they initially appeared. Reporters in Iceland turned to the country’s Ministry of Foreign Affairs, who said the Chinese embassy in Reykjavik claimed Ma was unable to return to Iceland “due to personal reasons”. Meanwhile, the Chinese Ministry of Foreign Affairs refuses to comment on the case. Read more of this post

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News you may have missed #883

August 29, 2014 by Leave a comment

Oleg KaluginBy IAN ALLEN | intelNews.org
►►Indonesia, Australia renew intelligence ties. Australia and Indonesia have signed a pledge not to use intelligence to harm each other, signaling a resumption in cooperation, which had been suspended after last year’s spy scandal. Australian Foreign Minister Julie Bishop and her Indonesian counterpart, Marty Natalegawa, signed the “joint understanding of a code of conduct” in Nusa Dua, Bali, on Thursday.
►►Ex-KGB general says Russia has already won in Ukraine. Russia has already won “the real victory”​ in Ukraine, according to former KGB general Oleg Kalugin, who is now living in the United States. The “southeast of Ukraine, that’s part of the general battle between the Russians and Ukrainians, but it’s not as crucial as the real victory and pride of Russia —the Crimea, I mean”, he said on Thursday. Kalugin reiterated that he does not believe Russian president Vladimir Putin wants annex another region of the country. “It’s not in the interest of Putin”, Kalugin said. “His position as of today is fairly strong in the country, in his own country, so why put it at risk by moving further?”
►►China says Canadian couple were spies disguised as ordinary citizens. Kevin and Julia Garratt have been accused of stealing Chinese military and national defense research secrets. They were detained on August 4, 2014, but not formally arrested, and China has offered little information on what they are accused of doing. The couple ran a coffee shop near the border with North Korea, worked with Christian groups to bring humanitarian aid into North Korea, and worked to train North Korean Christians inside China. Their detention by China’s State Security Bureau has been seen by Canadian authorities as reprisal for the arrest of Su Bin, a Chinese immigrant to Canada suspected of masterminding the electronic theft of US fighter jet secrets.

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News you may have missed #882 (cybersecurity edition)

August 22, 2014 by 1 Comment

Andrew LewmanBy IAN ALLEN | intelNews.org
►►GCHQ launches ‘Cyber Security Challenge’. Britain’s signals intelligence agency, GCHQ, has created a new online game to find new recruits and test the public’s ability to deal with hacking attacks. The new game, named Assignment: Astute Explorer, will give registered players the chance to analyze code from a fictitious aerospace company, identify vulnerabilities and then suggest fixes.
►►Chinese hackers spied on investigators of Flight MH370. Malaysian officials investigating the disappearance of flight MH370 have been targeted in a hacking attack that resulted in the theft of classified material. The attack hit around 30 PCs assigned to officials in Malaysia Airlines, the country’s Civil Aviation Department and the National Security Council. The malware was hidden in a PDF attachment posing as a news article that was distributed on 9 March, just one day after the ill-fated Malaysian Airlines Boeing 777 disappeared en route from Kuala Lumpur to Beijing.
►►Developer alleges NSA and GCHQ employees are helping Tor Project. Tor is a free software used for enabling online anonymity and resisting censorship. It directs Internet traffic through a free, worldwide, volunteer network consisting of more than five thousand relays to conceal a user’s location or usage. Interestingly, its executive director, Andrew Lewman, has told the BBC that employees of the NSA and GCHQ offer his team of programmers tips “on probably [a] monthly” basis about bugs and design issues that potentially could compromise the [Tor] service”. He added that he had been told by William Binney, a former NSA official turned whistleblower, that one reason NSA workers might have leaked such information was because many were “upset that they are spying on Americans”.

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Canada bans Chinese reporters over spy concerns

August 21, 2014 by Leave a comment

Stephen HarperBy JOSEPH FITSANAKIS | intelNews.org
The office of the prime minister of Canada has banned reporters working for China’s state-owned media from covering the Canadian leader’s official trip to the Arctic, due to concerns that they may be spies. For the past several summers, Canada’s Prime Minister Stephen Harper has undertaken official tours of the Canadian Arctic, in an effort to promote the country’s northern economy and attend military exercises. However, in a move that has raised eyebrows in Ottawa and Beijing, the organizers of the trip have issued a ban on a number of Chinese reporters from joining the Canadian prime minister’s entourage. The Winnipeg Sun reported on Wednesday that the unprecedented step was taken over concerns that the Chinese journalists in question may in fact be intelligence operatives in the service of China. The paper cited a quote by a spokesman from the office of the prime minister, who reportedly told the Québecor Média International news agency that “certain news outlets are no longer welcome” to travel with the prime minister. It appears that the reporters in question include primarily those working for The People’s Daily newspaper and the Xinhua news agency, both of which are owned by the government of China. Two Chinese journalists working for these outlets, Li Xue Jiang, and Zhang Dacheng, caused controversy during Harper’s trip to the Arctic in 2013. The two appeared to show more interest in photographing their fellow journalists and the interior of Canada’s prime ministerial airplane than covering Harper’s trip. Li even wrote an article for the Chinese-language edition of The People’s Daily at the time, in which he mentioned that he had come under suspicion of spying for China, saying that a secretary from the office of the Canadian prime minister had tasked an officer of the Royal Canadian Mounted Police to keep an eye on him. IntelNews readers will recall that in 2012 Canadian reporter Mark Bourrie resigned his post as parliamentary correspondent for Xinhua, accusing the Chinese news agency of running spy operations in Canada. Read more of this post

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China stops using some Apple products, fearing US espionage

August 7, 2014 by 2 Comments

By JOSEPH FITSANAKIS | intelNews.orgApple offices in China
Authorities in China have removed Apple products from a government procurement list because of fears that they are susceptible to electronic espionage by the United States. Citing “government officials familiar with the matter”, Bloomberg News said on Wednesday that 10 Apple products have been removed from the list, including the iPad and iPad Mini, as well as MacBook Air and MacBook Pro products —though interestingly the inventory of removed items does not include Apple smartphone products. The procurement list is produced several times a year by China’s Ministry of Finance and the National Commission for Development and Reform. It specifies the types of products that can be purchased with public funds by all central departments of the Communist Party of China, as well as by all state and local government ministries. The surprise removal of Apple products from the list follows a report aired by Beijing’s state-owned China Central Television in July, which claimed that security weaknesses in Apple software could cause the theft of sensitive state secrets. Apple vigorously rejected the claims made in the television report. The action by the Chinese government is the latest move in a tit-for-tat cyberespionage war between Washington and Beijing, which began in 2013, when American defector Edward Snowden began leaking US intelligence secrets. In June of that year, it was revealed that the US National Security Agency (NSA) has been engaged in protracted offensive cyberespionage operations against China for nearly 15 years. Almost a year later, the US Department of Justice charged a group of Chinese military officers with stealing American trade secrets through cyberespionage. Apple is not the first American technology firm to be hit with removals of its products from the Chinese government’s procurement list. Read more of this post

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News you may have missed #880

July 2, 2014 by Leave a comment

Augusto PinochetBy IAN ALLEN | intelNews.org
►►Chinese military establishes cyberintelligence research center. The Chinese People’s Liberation Army (PLA) has announced the creation of a Cyberspace Strategic Intelligence Research Center. Experts say the Center will “provide support in obtaining high-quality intelligence research findings and help China gain advantage in national information security”. Its staff reportedly specialize in such fields as strategic theory research, intelligence studies, and technology management, among others.
►►Chile court says US had role in 1973 killings of Americans. A court ruling released late Monday said the commander of the US Military Mission in Chile at the time of the 1973 military coup gave information to Chilean officials about journalist Charles Horman and student Frank Teruggi that led to their arrest and execution just days after the coup, which brought General Augusto Pinochet to power. The case remained practically ignored in Chile until 2000, when Horman’s widow, Joyce, came and filed a lawsuit against Pinochet.
►►Opinion: Cyber tools are no substitute for human intelligence. A colonel in the Israel Defense Forces critiques “the increasing use of cyber tools as a central and sometimes exclusive role in the work of many intelligence agencies throughout the world”. He argues that “the documents exposed by Edward Snowden show how willing the Americans are to invest in technological systems to collect information and gather as much intelligence as they can using cyber tools”. But he warns that “this almost exclusive reliance on the collection and analysis of intelligence using technology comes at the expense of the human element as a basic component of intelligence-gathering”.

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Hidden spy software found in Chinese-made smartphones

June 18, 2014 by 1 Comment

Star N9500By JOSEPH FITSANAKIS | intelNews.org
A popular brand of Chinese-made smartphones, which are sold internationally by several major retailers, has been found to contain pre-installed monitoring software, according to a German security firm. The revelation was made on Tuesday by G Data Software, which is based in Bochum, Germany, and has a subsidiary in the United States. The firm, which was founded in 1985, said it discovered the spy software hidden deep inside the proprietary software found on the Chinese-made Star N9500. The product in question is a cheap smartphone based on the popular Samsung Galaxy S4, and can be purchased from numerous Internet retailers, including online outlets such as Amazon.com. A G Data spokesperson, Thorsten Urbanski, told reporters in Germany that his company purchased several Star N9500 telephones from an online retailer after receiving multiple messages from users of the telephone in Germany, who said the device’s operating system appeared to contain malicious software. The security firm said the Star N9500’s operating system contains hidden software applications that could allow a third party to access and steal the telephone user’s personal information. There are also secret applications that could permit a hacker to place calls from the telephone, or utilize the device’s microphone and camera without the consent of its owner. What is more, the stolen data was sent to a server based in China. G Data investigators added that their team of experts sought for “over a week” to track down the manufacturer of the Star N9500 but were unable to do so. German media reported that journalists from The Associated Press also tried to locate the manufacturer of the smartphone, by contacting several companies located in China’s southern province of Shenzhen, known as the center of the country’s telecommunications industry. Read more of this post

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Analysis: Should government spies target foreign firms?

June 12, 2014 by 3 Comments

CyberespionageBy JOSEPH FITSANAKIS | intelNews.org
Last month, the government of the United States indicted five officers of the Chinese People’s Liberation Army with conspiracy to commit computer fraud, economic espionage, and theft of trade secrets, among other charges. In indicting the five PLA officers, the US Department of Justice went to great pains to ensure that it did not accuse the suspects of engaging in cyberespionage in defense of China’s national security. What sparked the indictments was that the accused hackers allegedly employed intelligence resources belonging to the Chinese state in order to give a competitive advantage to Chinese companies vying for international contracts against American firms. In the words of US Attorney General Eric Holder, the operational difference between American and Chinese cyberespionage, as revealed in the case against the five PLA officers, is that “we do not collect intelligence to provide a competitive advantage to US companies, or US commercial sectors”, whereas China engages in the practice “for no reason other than to advantage state-owned companies and other interests in China”. I recently authored a working paper that was published by the Cyberdefense and Cybersecurity Chair of France’s Ecole Spéciale Militaire de Saint-Cyr, in which I argued that the American distinction between public and private spheres of economic activity is not shared by PLA. The Chinese see both state and corporate cyberespionage targets as fair game and as an essential means of competing globally with the United States and other adversaries. In the paper, I argue that Beijing sees the demarcation between state and private economic activity as a conceptual model deliberately devised by the US to disadvantage China’s intelligence-collection ability. Read more of this post

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