U.S. Attorney General Eric Holder held a press conference Monday to announce that the Justice Department has indicted five officers of the Chinese military. The five individuals are alleged to have hacked into U.S. solar, steel and nuclear companies in Pennsylvania as well as a labor organization, which was mined for secrets of the trade and other details, in some cases by sending “phishing” emails to company employees that claimed to have come from colleagues. A grand jury returned an indictment containing 31 counts of violation of U.S. law by hacking in order to steal trade secrets and espionage.
The five officers, from Unit 61398 of the People’s Liberation Army in Shanghai, are alleged to have been part of a wider group engaged in espionage by hacking into U.S. networks in order to gain information from U.S. Steel Corp., Westinghouse Electric Co. and SolarWorld Industries American, Inc. The hackers were seeking information related to nuclear power plant systems, computers and pricing of solar panels.
In addition, network passwords were stolen from thousands of employees from Allegheny Technologies, Inc. while over 2,900 emails within Alcoa, Inc.’s system were also stolen. Email accounts were hacked into at the United Steel Workers Union (USW), which has historically criticized the Chinese government for its trade practices.
Monday’s indictment is the first time that the U.S. has charged employees of a world power with committing cybercrimes against U.S. businesses. The move is being seen as an escalation of the dispute that China and the U.S. have had regarding the U.S. government’s belief that Chinese hackers purposefully target U.S. businesses in order to discover any information that might help China to gain a competitive advantage over the U.S. in business, negotiations or trade talks. China has long denied the allegations of computer espionage.
The Chinese Foreign Ministry are demanding that the U.S. dismiss the charges because they have no merit and are based on “fabricated facts,” according to Qin Gang, spokesman for the Chinese Foreign Ministry, in a statement posted on the website of the ministry. Qin also added that the accusations by the U.S. government are “ungrounded and absurd,” and denied that the Chinese government or military has ever attempted to hack into U.S. businesses in order to gain proprietary information. Qin states that quite the opposite is true and that China has been a long-time victim of espionage by cyberattacks by the U.S.
In an expression of anger on the part of the Chinese government, China is no longer participating in a U.S./Chinese forum on cybersecurity, which was announced in 2013.
The executive in charge of the department within the Federal Bureau of Investigation that oversees cyber and criminal investigations gave a statement in which he said that charges like the ones filed today would be “the new normal” because traditional diplomacy and transparency have failed to work. The five officers charged today are Gu Chunhui, Huang Zhenyu, Sun Kailiang, Wang Dong and Wen Xinyu. They have been accused of conspiring to commit computer fraud and abuse. The Chinese government has not confirmed or denied the names of the men indicted.
The Justice Department also released the suspects’ photos, a move which may have been deliberately made in order to publicly shame the men, as the likelihood of China turning them over to the U.S. is very slim. In addition, the indictment will prevent the men charged with traveling to the U.S. or to any country which extradites to the U.S. Experts on the issue believe that the charges will also hurt the men’s chances of obtaining private sector employment when they retire from the People’s Liberation Army.
Although exact details on the amount of losses incurred by the affected U.S. businesses were not revealed, Justice Department officials described them as “significant.”
By Jennifer Pfalz