Prosecution: Spy Case Shows China’s Effort To Steal U.S. Secrets

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

SANTA ANA, Calif. — The career of a Chinese-born electrical engineer, Chi Mak, over four decades is a textbook example of how China’s spy services encourage their agents to burrow into American society in order to steal America’s defense secrets, federal prosecutors said yesterday.

The picture of Mr. Mak as a dedicated and patient Chinese spy, along with an alternate image of him as a tireless and loyal developer of vital technologies for the American Navy, came as the government and the defense presented opening statements in one of the most significant China-related prosecutions ever to go trial in an American courtroom.

“It’s not like what you see in the movies,” a prosecutor, Gregory Staples, said, acknowledging that the nerdy scientist does not fit the bill of a dashing international spy. “The Chinese don’t work that way.

The Chinese use the concept of 1000 grains of sand,” he said, explaining that the communist government collects small quantities of important data from a vast array of unpaid operatives and allies in America. “It relies on the loyalty and patriotism of Chinese Americans who come here,” Mr. Staples said. He said Mr. Mak admitted to his intelligence gathering, saying, “I wanted to help China.”

The naval technologies Mr. Mak worked on for a defense contractor, Power Paragon, were of interest to China because of its ambition to gain control over a democratically governed island off the mainland, Taiwan. “Their no. 1 goal is to support the retaking of Taiwan, if it comes to that,” the prosecutor said. He said the main obstacle to the Chinese effort is the presence in the area of the American 7th Fleet. “The Chinese Navy has determined that it cannot fight the 7th Fleet face to face, but the way to attack the 7th Fleet is to get its subs,” Mr. Staples said.

Mr. Mak was arrested in 2005 after FBI agents stopped his brother and sister-in-law at the Los Angeles airport as they were about to travel to Guangzhou, China. In carry-on bags, the couple had a compact disc containing music files, as well as encrypted technical papers pertaining to quiet propulsion and other projects Mr. Mak worked on at Power Paragon.

Mr. Staples said the high-grade encryption was the hallmark of an espionage operation. “It’s not an encryption program that you can go to Fry’s or Office Depot and buy. It was a custom-made encryption program and its author was a Chinese man,” the prosecutor said. He alleged that American investigators would have been unable to break the encryption if a search of the home of Mr. Mak’s brother hadn’t turned up a key to the code.

A lawyer for Mr. Mak, Marilyn Bednarski, told jurors that the government was exaggerating the sensitivity of the documents, which she said were “handouts” from widely attended gatherings of naval engineers. She said “numerous foreigners” attended the meetings and that much of the information was for sale on the Internet.

“None of the documents that he made copies of were classified. None were labeled with any kind of warning saying ‘export controlled,'” Ms. Bednarski said. “Mr. Mak absolutely believed they were sendable.” She said the so-called encryption program was an unsophisticated one used to hide the documents from Chinese customs officials and had nothing to do with spying.

“This is about misperception and prejudice,” Mr. Bednarski said, suggesting that Mr. Mak was being viewed with suspicion because he is an American of Chinese origin.

Mr. Mak is not charged with stealing classified information, but with conspiring to violate export control laws, lying to the FBI, and acting as an agent for the Chinese government without notifying American officials. Four of his relatives are to be tried separately on similar charges.

Prosecutors yesterday offered jurors an explanation for why nearly all of the documents at issue in the case were not classified. “The reason for that is simple: It would cost too much,” Mr. Staples said.

The first witness called by the government yesterday was the founder of Power Paragon, Eugene Dotson. He said the procedures required for handling classified information make it impossible to place that designation on every document that describes sensitive technology. “If we classified everything, we wouldn’t be able to build anything,” he said.

A former FBI agent, Edward Appel Sr., said Mr. Mak’s case is an example of how the dispersed technique of information gathering used by China is far superior to the methods traditionally used by Western intelligence agencies. “The Chinese have ratcheted this up to a level where we and those in London and Moscow, who invented the modern art of spying, bow down to the ancient Chinese notions of how you do this,” he said.

Mr. Appel said American laws are still based on the old style of spying. “Trying to use our criminal statutes to address the Chinese intelligence gathering system is difficult at best,” he said.

In a startling development, Ms. Bednarski announced to jurors that an FBI official who once ran the bureau’s unit devoted to ferreting out Chinese spies, Ivian Smith, plans to testify as a defense witness.

“I decided I should do it because every defendant has the right to a fair trial. Without my testimony, I’m not sure he’ll get a complete defense,” Mr. Smith told The New York Sun yesterday. “I’m certainly not doing it for the money,” he added. The ex-agent said he would be paid a “minimum” fee for the time he spends testifying.

Mr. Smith declined to discuss his testimony in detail, but hinted that it may relate to benign explanations for some behavior the government is suggesting was nefarious. “Someone who looks in the rear view mirror a lot may be trying to see if they’re being followed, or they may be being a very careful driver,” he said, offering what he said was an example unrelated to the Mak case.

A retired FBI counterintelligence agent, Gerald Richards, said Mr. Smith’s decision to become a defense witness in an espionage case was unusual. “It’s a rarity,” Mr. Richards said in an interview yesterday.

Mr. Richards noted, however, that few espionage cases go to trial, so the possibility rarely arises. Still, he said most retired agents would be unlikely to align with the defense unless they were convinced investigators had done something “grossly wrong.”

Asked if Mr. Smith’s decision to testify for the defense would upset some of his former colleagues at the FBI, Mr. Richards said, “Absolutely.”

In 2004, Mr. Smith published a book highly critical of bureaucratic infighting at the FBI. Prosecutors may try to use material from that book and other sources to depict Mr. Smith as a disgruntled employee seeking to settle scores at the bureau.

“I’m not naïve. I expect the government to try to beat me up a little bit. That’s the tenor of the times. To disagree with the government is parallel to calling you treasonous,” Mr. Smith said.


The New York Sun

© 2025 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

or
By continuing you agree to our Privacy Policy and Terms of Use