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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

* * *

UNITED STATES OF AMERICA, : Case No. 1:18-cr-0043

:

Plaintiff, :

:

- v - : Closing Arguments

:

YANJUN XU, also known as XU : Wednesday, November 3, 2021

YANJUN, also known as QU HUI, : 9:30 a.m.

also known as ZHANG HUI, :

: Cincinnati, Ohio

Defendant. :

* * *

EXCERPT OF TRANSCRIPT OF PROCEEDINGS

BEFORE THE HONORABLE TIMOTHY S. BLACK, DISTRICT JUDGE

For the Plaintiff: TIMOTHY S. MANGAN, ESQ.

EMILY N. GLATFELTER, ESQ.

Assistant United States Attorneys

221 East Fourth Street, Suite 400

Cincinnati, Ohio 45202

and

MATTHEW J. McKENZIE, ESQ.

United States Department of Justice

National Security Division

950 Pennsylvania Avenue NW

Washington, D.C. 20530

and

JACQUELINE K. PRIM

Special Assistant, Paralegal

United States Department of Justice

National Security Division

950 Pennsylvania Avenue NW

Washington, D.C. 20530

For the Defendant: RALPH W. KOHNEN, ESQ.

JEANNE MARIE CORS, ESQ.

SANNA-RAE TAYLOR, ESQ.

Taft Stettinius & Hollister

425 East Walnut Street, Suite 1800

Cincinnati, Ohio 45202

and

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ROBERT K. McBRIDE, ESQ.

AMANDA JOHNSON, ESQ.

Taft Stettinius & Hollister

50 East RiverCenter Boulevard

Suite 850

Covington, Kentucky 41011

and

FLORIAN MIEDEL, ESQ.

Miedel & Mysliwiec, LLP

80 Broad Street, Suite 1900

New York, New York 10004

Also Present: Mae Harman, Interpreter

Robin Murphy, Interpreter

Yanjun Xu, Defendant

Law Clerk: Cristina V. Frankian, Esq.

Courtroom Deputy: Rebecca R. Santoro

Court Reporter: M. Sue Lopreato, RMR, CRR

Potter Stewart U.S. Courthouse

Southern District of Ohio

100 East Fifth Street

Cincinnati, Ohio 45202

513.564.7679

- - -

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EXCERPT OF PROCEEDINGS

(In open court at 11:30 a.m.)

* * *

MR. MANGAN: Good morning, ladies and gentlemen.

Before I begin, I want to thank you first and foremost for

your time, your attention, and your service in this matter.

It's very much appreciated by everyone involved.

Now, I'm not going to pretend that this is a normal case.

It's not. At its heart, you are asked to decide whether this

man, Xu Yanjun, engaged in a conspiracy to steal trade secrets

from aviation companies across the world, or whether he

attempted to steal those trade secrets from GE Aviation in

addition.

But it's much more than that, because this case also

involves a much larger concerted effort to engage in

industrial espionage, economic espionage, on behalf of a

foreign country; namely, the People's Republic of China.

And the defendant in this case, as you know, is not

someone who is loosely connected with some Chinese entity. He

is, in fact, an intelligence officer, a spy, with China's

Ministry of State Security, with the sole mission of trying to

acquire whatever trade secrets he can from aviation firms by

whatever means on behalf of the state.

And he used many different means and methods, and we will

talk about those as we go through this. And he also had many

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conspirators, coconspirators, people at MSS that you heard

about already like his associates, Chen Feng, Xu Hang; his

boss, Zha Rong; and his associates at AVIC that he worked

with, the technical experts that helped define his

requirements; friends like his card playing friends at NUAA;

his university ally, Chen Feng, as well as insiders that he

had planted in aviation companies, like Tian Xi and Gu Geng at

Safran.

Now, the government bears the burden of proof in this

case, and we gladly take on that burden because the evidence

shows beyond a reasonable doubt that the defendant is guilty

of all the crimes charged in this case.

Now I'd like to talk a little bit about these crimes and

walk through the four charges that you've just been instructed

on by the Court.

First and foremost, we'll talk about Counts 1 and 2, the

conspiracies towards the aviation companies. Bear in mind,

for Counts 1 and 2, the time period that we're talking about

is from 2013 through April 1, 2018.

Count 1 is for the conspiracy to commit economic

espionage, and Count 2 is the conspiracy for the theft of

trade secrets, okay.

These involved all of the activities that we've discussed

in this case, all of the things related to Safran, related to

these exchanges, related to the overall conduct that he

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engaged in during that time period. It also includes the GE

incident, all right. That's Counts 1 and 2. Those are the

conspiracy counts.

Again, as you heard in the instructions, it's simply an

agreement, an understanding between him and others, just one

other person to engage in these crimes, and then an overt act

in furtherance of the crimes.

The main difference between the economic espionage and

the trade secret portions, as you saw in the instructions, was

that for the economic espionage charge, it talks about that

this was to benefit a foreign government or a foreign

instrumentality or a foreign agent.

Here you have all of those things because he was working

on behalf of the MSS, along with other entities like NUAA, and

certainly the government for China itself.

In contrast, the crime related to the theft of trade

secrets involves an intent to injure the owner of the trade

secrets, to take it from them to harm that owner of the trade

secrets and benefit someone else. As you look through those

instructions, that's the fundamental distinction there.

When we turn to Counts 3 and 4, there we are talking

specifically about the aviation, GE Aviation incident that

occurred between 2017 and April 1, 2018, that you heard so

much about.

These are both attempt charges. Again, the GE incident

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is included in Counts 1 and 2. But with respect to Counts 3

and 4, these are specific attempt charges related to the

conduct towards GE Aviation in that time period.

Again, the distinction between the economic espionage and

trade secrets has to do with was it to benefit a foreign

country, did it also have the intent to injure the trade

secret owner, okay?

Importantly, as you heard in the instructions, there's no

requirement that it requires proof that any trade secret was

lost. Again, he's charged with conspiring to commit these

crimes, and he's charged with attempting to commit these

crimes. It doesn't require proof that he actually acquired

any specific, one specific trade secret. It also doesn't

matter if the information that he was targeting --

THE COURT: Excuse me. Excuse me. I'm sorry. The

interpreter has a hand up. Slow down?

THE INTERPRETER: The interpreter is asking to slow

down.

THE COURT: I think I heard slow down.

MR. MANGAN: I did. I will.

THE COURT: Very well.

MR. MANGAN: What I also wanted to say is that it

doesn't matter if the targeted information actually was a

trade secret or not. What's important is what he believed and

what he intended. The question is did he target information

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that he believed was a trade secret, and the answer to that

question is undoubtedly yes.

Now, before I turn to the mountain of evidence in this

case, one thing I want to highlight for all of you. The

evidence in this case, nearly all of it, came from his own

words. There's hardly another case like this. The case came

directly from his own writings, his own text messages, his

recordings, his pictures, his cloud, his calendar and diary.

These are all his own words.

You don't have to resolve any kind of he said/she said

dispute. These are his own statements, his admissions. And

we all know, as a matter of human nature, that it's not

uncommon for people to say things, often incriminating things,

when they don't think anybody's listening or they don't think

these statements will ever reach the light of day.

Well, these statements by the defendant did reach the

light of day in this courtroom. And what you see in there is

that it shines a light on what his deeds were, and it gives

you a clear window -- his own statements give you a clear

window into his intent.

Now, let's start with a fundamental question. Who is

this defendant? We went through a lot of information at the

beginning of the trial to piece together where the information

came from so that you would be confident in the sources of the

evidence and how they are all connected and tied to each

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other, especially when we're dealing with his names and his

aliases and the various accounts that he used.

We explained to you that there were four different phones

recovered in Belgium, including the Apple 5s, which we've

talked about numerous times. This was the phone that was

backed up on the jastquhui@icloud, and it contained so much of

the evidence you heard.

In addition, there was the iCloud backup of the phone and

the iCloud account itself. All of these had chats, text

messages, the calendar, the photos, the recordings. And then

we also showed you a few emails from these two different email

accounts, the JAST XYJ, which stands for JAST Xu Yanjun, and

then the JAST Qu Hui Gmail accounts, okay?

We wanted to give you that belt and suspenders approach

so that you can understand how all of these are tied together

and that you had that confidence in this evidence.

Let's start with what was on him when he was arrested.

First of all, there was certainly the passport, and that

included the Schengen visas with his true identity on it. It

showed how he went to Europe in 2017, and then again got a

visa in 2018.

He also was found with that passport and the credit card,

all in his true name. He was also found with his Chinese

national ID card. It contains his date of birth, his national

ID number, his true address back at home. These were all

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found on him and identifies what his true identity is and who

he is.

Now, when we start looking at the electronic evidence, we

showed you the various different email accounts. If you look

at those top two accounts, two email addresses. The first one

set up in his own personal name, Xu Yanjun. The second one

set up in his alias, Qu Hui.

Both were set up on the exact same day, five minutes

apart, from the same IP address. He used the same recovery

email and the same phone number. And, lo and behold, it's the

same phone number that's on the phone that was on him in

Belgium, and it's the same phone number that's on the business

card that he gave to the GE employee in China. Same phone

number, the 2316 number.

If you want more confirmation that Qu Hui is the

defendant, that it's his alias, look at the last account. He

sets it up in the name of Qu Hui, Qu Hui 11, and the recovery

email is his true name and the year of his birth, Xu Yanjun,

1980.

As we go to the cloud accounts for those, you see, once

again, the JAST XYJ email, and that again is tied to the same

phone number. This is the cloud account associated with that

email.

When we turn to the JAST Qu Hui cloud account, again, it

describes the 5s phone that was actually recovered in Belgium.

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It shows you on here, you see once again the Xu Yanjun 1980

email account he had used previously to set up a different

account. Here it is tied to this cloud account.

When you go to the other subscriber information, it shows

you the actual IMEI number for that 5s phone that was being

backed up on the cloud, and that's where so much of this

evidence came from.

It was for JAST Qu Hui's Gmail in the cloud account. The

phone number matched. The IMEI number matched. On the

right-hand side, you see the actual back of the phone that was

recovered in Belgium so that you have confidence this is the

same guy using his alias and these are his devices.

As we go forward here, we wanted to show you a lot of the

things that were found in his cloud account to further help

you understand the attribution. So if you weren't convinced

already that these are his numbers, these are his accounts,

this is why it's tied to him, look at the content of what we

found.

You have in there in his true name the photo of his own

national ID card that was found on him. You have pay stubs

that were in there that say that he worked for the Sixth

Division and had a law enforcement piece. You have a picture

of a bank withdrawal form where it identifies him as working

for the state security department, and it gives the same

national ID number, all right, and his true name.

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You even have his NUAA card, which has, again, his true

Chinese national ID number, similar to our Social Security

number.

Other items that were found in there, in his cloud

account to help you understand this is really him, this is

really his stuff, here's his medical card that was found in

there. And then on the right-hand side was his MSS vacation

form that he sent to his wife. And in there, it explains he's

deputy division director, and he has his boss listed at the

bottom, Chen Li, who we also discussed during the trial, one

of the MSS supervisors.

Now, this is all to make clear how these tie together.

But who is he? Well, fortunately, he also took a picture of

his resumé, his Communist party application form, which sets

forth his entire history with the party and with the MSS. His

current post at the time that this was taken, sometime in that

2016 time period, was a deputy division director at the Sixth

Bureau for the Jiangsu Province Ministry of State Security.

And in the calendar part of it, it sets forth all of his

experience, roughly 15 years, developing and being promoted

within the MSS as one of their intelligence officers.

By the way, he talked about these promotions in his

calendar too, and there's a lot in the calendar, as you saw.

It's more or less his diary. He talked about these promotions

and his ups and downs with the MSS.

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So you don't have to take our word for it. Look at the

evidence. It's right there in black and white, in his own

accounts, in his own words.

So let's turn to the messages. We went through these in

Exhibits 32 and 33, if you want to look through them, text

messages and WeChats from the defendant time and time again

identifying himself, identifying his email accounts,

confirming who he is and where he works.

Here again, "This is Xu Yanjun of the Provincial State

Security Office and the unit of recruiting is the MSS."

Message after message we went through.

Here are two more. It says where he works, it says his

true name; and, again, this is when he's talking to the

insiders, when he wants to let them know he works for the MSS,

because he's working with them on these operations.

Here again, more messages where he is not at all shy

about who he is and that he works for the MSS.

Here's one more message, again, explaining that he works

for the JSSD, which was that sub-department for the MSS.

Remember the MSS is the large organization. JSSD was the

sub-organization that he worked for for the Jiangsu Province.

Then we get into the WeChats, and it's even more

revealing when he talks about being in intelligence and that

he works for the Sixth Bureau. It's already in the resumé,

but this is just more and more evidence piling up, identifying

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who he is and what he does.

In this chat with Vivian, he talks about his involvement

in intelligence assessment for the ministry, and he explains

the large investment that they have.

Then there's this question from her, "Does your division

mostly deal with overseas?" And his answer was, "Right.

Science and technology."

If you'll remember back at the very first witness, it was

Dr. Mulvenon, who explained to you what the MSS was, what

their purpose was. He talked about the various bureaus, and

he testified he was aware that the Sixth Bureau did science

and technology.

Here it is, an individual who is actually a member of the

Sixth Bureau, confirming in his own words, in his own chats

back in 2016, yep, that's what we do. I do science and

technology.

If you remember, there was a recording of the defendant

with a tutor that was found on his cloud. And when he's

talking with the tutor, they get into things about all the

secrets and what they can see as far as surveilling the

internet. A lot of things were discussed in there, and we

read those to you.

But as you'll see, one of those statements in here is

that he focused on aviation. Now, you also saw that from all

the evidence with respect to who he recruited and who he

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contacted, it generally was people from Boeing, GE Aviation,

other aviation firms like Honeywell, and so on. But to

further confirm it, here he is saying it, "I focus on

aviation," okay? It's right there in black and white.

Now before we move on, I want to say one word about

Nanjing Luote. You may forget the name of this company. It

came up a little bit. This was the entity that he used on his

visa applications to France. It only comes up in those two

circumstances, when he went to France in 2017 and when he went

back in 2018 to meet the GE employee. And in those two

circumstances, he told the French authorities his employer was

this Nanjing Luote Technology.

There's nothing else in the cloud, as you heard in the

testimony from Agent Hull. There were no other messages,

nothing that indicated he worked for Nanjing Luote; no

calendar entries, no pay stubs, no identification card.

Nothing. No discussions with other Nanjing Luote employees.

All you have is when he traveled these two times, he told

the French authorities that that's where he worked, and then

they made up documents like the one on the right, saying

that's where he had worked for many years.

But you know now, from seeing his resumé and seeing

everything else, that he had been working for the MSS the

whole time, and this is a lie. It's a lie to the French

government. It's what he does.

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You also saw the precautions document. If you recall,

Mr. Olson testified about that as well. Sometimes, when they

have a cover and they travel overseas, you need to study what

that cover is so that everybody knows how to answer questions.

And that sort of cheat-sheet precautions document was found in

the cloud for his travel. And in there, it said if you need

to contact anybody, you contact Chai Mung, one of his MSS

colleagues.

And then during those trips, both trips, they would use

codes when they chatted with each other, calling each other

Tom, or Jerry, or Sam, okay, further proof that they are using

their espionage trade craft when they would engage in these

various excursions where they went overseas, because those

were very risky for them.

But, again, all of the evidence you see that we presented

here proves that he was an MSS officer. That was his primary

function. That was his job. Everything else is an alias, or

a cover, or a front.

Let's talk about the aliases, mostly the Qu Hui one that

you see there. He used these aliases. This is part of the

deception that goes with his job title, that goes with his job

duties.

Take that into consideration when you consider his

intent, okay. He is hiding his MSS affiliation when he deals

with outsiders because he doesn't want them to know that the

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MSS is behind these exchanges, that they are behind these

operations.

Look at what he's hiding when you consider his intent.

To do his job, this was the card obviously that he handed to

the GE employee. It was part of this alias that he used

fairly consistently with a number of these exchanges,

especially when he dealt with outsiders, people that weren't,

you know, either at AVIC, or at NUAA, or at MSS, okay?

Here it's very clear he sends a message to someone,

saying, "Teacher Zhang, my working identity is Qu Hui, deputy

secretary general of the Jiangsu Province Foreign Science and

Technology Association. Thanks." And then he signs it with

his true name. He calls it his working identity.

And remember, you heard from Mr. Mulvenon, Mr. Olson how

the MSS does use science and technology associations as

covers, as fronts for some of their operations. It happened

throughout this case, you saw in the evidence.

But look at this right here. Remember back in the

opening statements -- and I know our opening statements aren't

evidence, but the defense mentioned to you that he works for

Nanjing Luote, and maybe sometimes for the MSS, and who knows

who Qu Hui was.

They made that statement. "Who knows who Qu Hui is?"

You know who he is. He just told you. He tells you over and

over again in the evidence. He's Xu Yanjun. This is his

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working identity. This is my alias. This is the lie I'm

using. Let's get it straight so that you call me by the right

name when we're trying to dupe these foreigners.

So when they talk about who knows who Qu Hui is, is that

what you saw in the evidence? Because the evidence was very

clear. It's his alias. It is this defendant.

Mr. Zheng, from GE Aviation, went to meet Qu Hui, got the

business card. He stood here in the courtroom and pointed at

him. "That's him. I met him. That was the guy who said he

was Qu Hui," who you know as Xu Yanjun.

Here you have one of the examples, one of many examples

in the evidence where he's introducing himself to the

outsiders as being part of JAST. This is part of the

deception. It's part of the luring and the recruiting. The

whole idea is to bring people back under these false

pretenses, lull them into some sense of comfort that this is

normal, this is aboveboard, there's nothing underhanded here.

You certainly can't tell them you work for the MSS.

It's part of the scheme. It's how they try to get the

technology. This is part of the con. That's what it is.

It's a con.

Let's look at a job posting that he does over at -- he

reaches out to one of the professors and wants to do a job

posting for JAST, and he tells the professor, Hey, don't tell

them -- don't reveal our security agency background when you

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notify the students. Just put the posting under the JAST

name.

So he's acknowledging we used it as a front. Don't tell

the students. But in the contact portion, when the students

want to apply, this is who they contact; same phone number,

same email address, same defendant who is sitting here today.

Now, there is one other alias. This was admitted in the

evidence, and I know we read a lot to you. We read a lot.

And I appreciate your patience. We didn't actually read these

exhibits. This was Exhibits 94 to 98. You're welcome. We

didn't read all of those to you. You may think we read

everything. It felt that way, but this was something we

didn't cover.

I'm going to just comment on it briefly, but you can go

take a look at 94 through 98. There was another individual at

Boeing that was recruited over for exchanges, an engineer

named Linda Li. And with Linda Li, you'll see in the messages

with her that the defendant reached out to her under a

different alias called Zhang Hui or Zhang Hui.

Even for this one, he set up a LinkedIn profile under

this name. If you'll look at the email address that set it

up, it's jastxyj@gmail.com. And when she came over for the

exchanges, he had to reach out to his coconspirators and let

them know the alias he was using.

So here again, similar to what you saw in other

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instances, he's telling the dean for this exchange, Hey, I'm

Zhang Hui, deputy director over at this science and technology

association, so everybody can get on the same page. Then he

sends the same thing to two more people. Hey, here's the

identification I'm using.

Remember this is coming from the defendant on his own

communication platforms on this phone that we've already

talked about.

This kind of deception is second nature for him. It was

part of the job. It comes with being an officer in the MSS,

and it comes with trying to lure these people over to get

their technology. Again, understanding what he's hiding helps

you understand his intent.

Let's turn to the exchanges themselves. We talked about

those a lot. The aliases, these fronts and covers were part

of bringing the folks over. These, again, were the opening

steps to bringing folks over and trying to soften them up,

recruit them, and find out how they might be best used by the

MSS in order to acquire the technology they want.

The true purpose was to lure them and obtain trade

secrets. We looked at the recruitment cycle. First, there

was a spotting. As you heard, they would reach out,

oftentimes through LinkedIn, as a way to identify the person

in the right company with the right expertise. That certainly

happened in the GE scenario.

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Oftentimes, they would use a person as a front person to

make the first invitation, like they did with Chen Feng and

the GE Aviation employee -- that's part of that spotting

process -- and then inviting them over.

Then when they bring them over, they do the wining and

dining. They take them out for a couple meals. They get to

know who they are. Maybe they do a presentation to students.

This is all part of the assessment phase.

As you heard, this is part of the recruitment cycle for

an espionage officer. They're assessing them. They're trying

to learn as much as they can, find out what they know and how

they can help the MSS.

They pay them cash. They'll pay for sightseeing.

They'll take them around, all right, all under false names,

false covers, so that the person doesn't know. And, by the

way, maybe they brought their work computer. But we'll come

back to that.

As you saw, he did this many times with Arthur Gao. He

did it with the individual at Boeing who did the IT, Sun Li,

Linda Li. It goes on and on.

Now, one of the examples we showed you was this

individual named Bin Liang, and he was a person who had worked

for one of the aviation companies. Again, the alias was used.

He brought them over. He offered to help the parents of

the individual with the demolition issue in China, which,

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again, was part of how they tried to leverage things in China

to help get some cooperation, and brought the person around

for sightseeing and presentations.

And, again, as you saw at the bottom there, once again,

"The guest doesn't know our identity. I approached him in the

name of Qu Hui," okay? So we see it over and over again

between them.

Ask yourself -- and we do rely on your common sense.

It's in the instructions. Apply your common sense. Ask

yourselves, why are they using this deception? If you're

simply trying to get public information, if you are on the

up-and-up, if you have legitimate reasons for what you're

doing, you don't do this stuff.

It's all part of the developing of sources. What are the

options once they get them? Well, we'll talk about that a

little bit more here with Arthur Gao; but, obviously, once

they bring them over and they get them developed, there are

options. They can keep asking them back. They can try to get

more information. They can even break into their hotel room

and take their computers; a lot of options at this point.

Now, you heard about Arthur Gao. He was originally

recruited by Zha Rong, who was using an NUAA alias at the

time. They brought him back in 2016, and that's when he was

handed from Zha Rong over to the defendant, Xu Yanjun.

They met at that point. No presentation. They just took

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him sightseeing, paid for everything. And when he left, they

gave him $5,000 in cash and said why don't you come on back.

All right. They were just planting the seeds, trying to make

sure they had started to get their hooks in him and slowly get

him going.

But what really was interesting was when he came back in

2017. He gave a presentation, and the substance of the

presentation, it's in the transcript, but what was interesting

was that the whole meeting was recorded.

And when Arthur Gao left -- and he testified here, Nobody

asked me specifically for any trade secrets. Not that that's

the words they're going to use anyway, but what he didn't know

is what they were going to say about him after he left, and

what Xu was going to say about his overall process after he

left. That's what's really interesting in this.

As you look at this recording -- and he talked about how

he works with these experts when you bring them over. Again,

think of this in terms of the recruitment cycle.

As he went through these, he walked through -- he tells

you exactly what his process is. At the highest level, these

experts can participate in long-term design. But there's a

problem with this because of the time commitment. They can't

simply leave their jobs, and they may not want to leave their

jobs or the U.S. and come back to China and become an actual

developer for China.

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So another option is to present specific problems or

programs to the person about the problems encountered and see

if they can help China fix some of those problems.

But the big one that he uses the most, probably, is

asking the experts -- and by "experts," he's talking about

people that work for aviation companies in the U.S. and in

Europe, all right. These are insiders in aviation companies

that they are luring back.

One of their main options, and something he says they did

frequently, was to try to get them to provide information

directly, okay? And he talks about the volume of information

is hard, and they have a lot of challenges with this; but,

most importantly, it's right here.

"As experts abroad, it's very difficult for them to

directly take materials, large batches of materials from

abroad, due to the fact that their company security is tight."

And he talks about the risk they bear before he gets cut off.

Look, he gives away his intent here, okay? There's no

statement here about we respect the security of these

companies. This is an obstacle for him. This is something he

wants to circumvent and get around, and he needs to try to

find people on the other side that will look at it the same

way.

Again, this is a problem. The way it's difficult for

them is because sometimes the security is tight for this

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information. Remember the definition of trade secrets:

Information that a company has taken reasonable precautions to

keep secret and that they derive some economic benefit from

that being kept secret.

That's really all we're talking about with trade secrets.

It's not magical. And here, when he talks about it in the

context that he never thought was going to be played in an

American courtroom, here he is talking about it. "Large

batches of materials, it's hard to take because the company's

security is tight." He's not backing off from it. It's just

a problem they need to overcome. He still wants that

information. He still intends to get those trade secrets.

Now they do talk about Arthur Gao, how they can still use

him. And they mentioned even, well, maybe he can get

information because his company's bankrupt. They seem to

think that's sort of an opening for him. Mr. Gao didn't know

any of this, of course. He didn't know how he might be used

in the future; and, fortunately, he never made it back there

before this defendant was arrested.

They also talk about spotting, that he can contribute to

other things, like introduce other experts for us. So here's

some more talking about spotting. We saw it on the

recruitment cycle.

And Mr. Xu, the defendant, talks directly about how he

targets people. It's not simply the technology. If they tell

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him, Hey, we need composite fan blade technology, he needs to

know the company. And we'll get to that. There's one

company. It's GE Aviation.

He wants to know the company, and then he can look,

whether it's LinkedIn or somewhere else, and start burrowing

down to the person with the right specialty, the right access,

and then that's who he looks for.

And he says it right here, all right? We're not asking

you to, you know, come up with this out of some other

circumstances. It's right here in his admissions. He's

trying to find the company, and then he tries to identify the

person.

He also goes on to talk at length about funding. And

what is made abundantly clear is that there are no limits

here, that there is abundant funding for this.

And the very last statement at the bottom is maybe the

most telling, "As for money, for our state, the funding for

the aviation field is not a problem," right?

So he has all these tools at his disposal. The main

goal, though, is to get trade secrets. This is not a

discussion you are having about trying to do open source,

public research on the internet, okay? This is what you're

talking about when you're talking about operations,

intelligence operations.

Again, he goes on and on, talking about the funding. He

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even mentions if somebody can give him a serial number and he

can find the document, he's willing to spend the money to buy

it, okay?

And you saw with these exchanges there's plenty of cash

thrown around. With Arthur Gao, they gave him five grand in

2016 just to come back. When he came back, gave a

presentation, they gave him another pile of cash and paid for

his trip back.

They do talk about the state function, as I mentioned in

the economic espionage portion. There's certainly a part of

this where one of the elements is that they're doing these

crimes on behalf of or for the benefit of a state entity,

which would include MSS. But here, it's right here.

If you want to check the box on this element, go right to

this statement: "Talk about the truth. With that said, we

are serving the state." Period. End of story. That's what

he's doing. That's his job. That's his mission.

Now, one of the portions of the recording, he happens to

talk about originally looking for a fan blade. So I wanted to

point out the timing of this.

When we get to the GE function, the GE employee's invited

there and gives his initial presentation in June of 2017. A

few months later, we have Arthur Gao coming back for his round

two.

Then you get this recording, and he makes this comment.

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And then shortly thereafter is when the FBI goes and

intervenes with the GE employee, and then they reach out.

Within seven, eight months, April 1st, the defendant is

arrested.

These overlap. That's the main point I wanted to get to,

that you understood that the timing of this recording showing

his intent is in the middle of and as the GE incidents are

going on. It's over the same time period.

He then goes on and talks some more about Mr. Gao, how

we've got some options for how we can use this guy, that he

seems willing. You know, Arthur Gao doesn't know what they

have in store for him, but they have a plan. The question is

what method they want to use for execution. You see that at

the bottom. They want to design something for him and make

use of what he knows.

And sure enough, in January of that year, it was around

the same time he's starting to make plans to meet with the

GE employee, they send a tasking to Arthur Gao, where they did

ask for information, more detailed information. So they are

continuing down that path of trying to develop him as a source

and extract information.

The other interesting thing after that meeting was this

particular phone call that he has with Chai Meng. And Chai

Meng is everywhere. We're going to talk about him a lot.

He's in Safran. He's in the GE case. He was with Arthur Gao.

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He was in the picture. That's him, the tall guy on the left,

meeting with Arthur Gao and taking him sightseeing.

And after the meeting, you get the call from the

defendant saying, Hey, you used the wrong alias. It's hard

when you're lying. It's hard to keep them straight. These

things happen.

And right here, he goes through it and he explains, You

said you were with the foreign affairs office of NUAA.

Remember, that was the lie that Zha Rong had used for him and

Xu. But he wanted him to use the JAST alias, which, by the

way, Chai Meng's alias Cai, C-a-i, and Mr. Gao said, Yeah,

this was the guy, C-a-i, that's how they introduced him to me.

The tall guy was called the secretary.

That alias was on the JAST website, Cai Meng, right next

to his alias, Qu Hui, on the JAST website, until after he was

arrested, and then they pulled the alias down.

But it's interesting here. It definitely reveals very

clearly what they are doing. This is the inside stuff. One

spy talking to another, saying, Hey, you messed up. You used

the wrong alias when we were talking to the target. Let's

clean it up tomorrow.

One other thing before we move on here. You saw how

Mr. Xu talked with people at places like AVIC to help define

requirements, also evaluate the information that he was

collecting.

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We introduced a number of those communications between

him and individuals at AVIC. I won't go through all of those,

but one of the parts of it that was interesting was their use

of codes. And you also saw their use of -- their discussions

regarding not just commercial aviation technology, but

military aviation technology.

The efforts of Mr. Xu and his coworkers at the MSS to

steal aviation technology extended into that realm, and they

certainly did have an impact on those interests. They used

codes in discussing military technology. You see in this

exchange where he passes along the various codes from his MSS

associate to one of the AVIC associates.

You recall he talked about seeing plans or getting plans

for the U.S. F-22 fighter aircraft. They also made a

reference to another aircraft. The U.S. aerial refueling

aircraft, the KC-135, which he talks about right here in one

of his messages to AVIC.

This reinforces what you heard is that the number one

goal for MSS and for his group was to get aviation technology,

and that certainly bled over into information of what might be

military technology, which certainly even more so is going to

be protected and guarded as trade secret.

I alluded to the issue with computer hacking, and we got

a lot to talk about there, so let's turn to it.

So with respect to computer hacking, these exchanges were

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the beginning of the process to recruit sources. They would

bring the individuals over and, from that point, they have a

lot of different ways to use them.

If the person actually became an insider and became an

asset within a company like Safran, then they could use them

in even more aggressive ways.

The hacking of Safran is the crystal clear example of how

an intelligence operation like the one he operated could use a

HUMINT asset inside of a company to help with acquiring trade

secrets from an aviation company by planting malware on one of

the employee's networks.

The messages -- and there's a lot in here, and we'll go

through them all, but please go back and reread the summary of

the Safran intrusion in Exhibit 110. It walks through it from

beginning to end, where he talks with his insider.

Remember the Safran employee came here from France to

testify, and he explained that he went to Suzhou, which is the

area in China where they had their particular plant with their

subsidiary, and he met with -- he worked with Tian Xi, one of

the main managers at the plant. They worked side by side, and

he didn't know this guy was betraying him the whole time. And

the reason he was betraying him is because he was a working

inside asset for an MSS spy, Xu Yanjun.

They talked about when they're going to meet, when the

Frenchmen are arriving so that he can set up times to meet,

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okay? They go on and on and talk about when they're going to

get together.

As you go on, he even talks about, Hey, if we can meet at

the restaurant, I'll pretend to bump into you at the

restaurant. That way, we don't have to meet elsewhere. And

they try to make those types of covert arrangements.

Now, eventually, they get to where he talks about where

they're staying, and he tells them the Crowne Plaza. If you

remember, Mr. Hascoet testified that when he would go there,

that's where they stayed. They stayed at the Crowne Plaza.

This is going through November, and they're having some

frustration. They didn't quite get where they wanted to be,

and he asked the question of Tian Xi, "Horse hasn't been

planted?"

Now, you heard the testimony from Adam James, the special

agent, about what a remote access Trojan was, and that this is

a term for that kind of malware, that kind of remote access

Trojan horse malware that can be planted on somebody's

computer. Again, they talk about how they haven't found an

opportunity to plant the horse.

As it moves on, we get into January, and he starts

talking with a different asset he has. Remember Gu Geng was

an IT specialist within Safran, another insider that he had

planted in the company.

He talks about how Gu has told him that Safran heard that

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people were posing as company leadership and sending out

letters. This is a different scheme going on. And here he

talks with his associate, Chai Meng, about, Hey, is this us?

You know, is this another part of the MSS operation? And

they're back and forth about, you know, here's what we did,

what we didn't do, okay.

This is kind of -- it's almost a side route from the

planting of the malware, but it shows the other activities

they were engaged in.

But then January 25th, it finally happens. He sends the

message to Xu -- this is one coconspirator to another -- about

an overt act, saying, "The horse is planted. This morning."

Okay. And "the horse" is the malware.

And you heard from Agent James that that was the day when

they analyzed Frederic Hascoet's computer. That was the day

that the malware was installed -- two different types of

malware were installed on his computer.

He explained the horse is planted, the IP address is now

online, and the MSS is off and running. They have now hacked

into a Safran employee's computer with the help of this

defendant. Then the next day he tells them, "Destroy the

horse," and his agent acknowledges.

They go on, and you see more conversations with,

eventually, you know, this is only in effect for a few weeks

before there was a public report, and that led to the

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discovery of this malware, and eventually Safran was sort of

at least on to it and started to take actions to fix this

hacking.

As they go through it, they start talking about --

fighting a little bit about what's going on. Here the insider

IT guy, Gu Geng, is told to check out this particular record,

the dmsdojo.com. If you recall from Agent James, that was the

website that the malware was designed to beak in to.

So you can see the company has figured out this is part

of the problem, and our inside conspirators who are committing

this crime are talking about, hey, they're on to us, they're

checking out this particular record. And here he is checking

with his other MSS associates about it.

Then you just see a number of things where they -- Xu is,

again, checking with individuals, trying to find out if

anybody's on to them, trying to see if they got caught.

Bear in mind, you don't do this operation, you don't go

through this kind of work to put malware on a computer for

public information, okay? All right. They may say, Well,

look, they weren't -- the computer didn't show whether or not

things were extracted. They couldn't tell one way or another

whether or not they successfully extracted documents from

there. But the point is they put a tool on there, they put

malware, two types, on there that was designed to extract

documents from that computer.

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And remember who Safran is. Safran is in a joint venture

with GE. They make the LEAP engine. They have a factory,

obviously, over in China, where they're working on some parts,

but that is the technology that they are trying to acquire.

They don't have an engine of their own yet that they can

put on a plane. Right now they're designing a plane, the

C919, and the engine they're putting on it is the LEAP engine.

They're using the Safran GE engine right now.

So, yes, this is who they're targeting, another aviation

company, trying to get after one of their employees to exploit

that company and get around their security measures to get

into the company, okay?

No indication this is domestic surveillance. There's no

evidence of that. There's no statements about that kind of

stuff. They're trying to get in to and exploit a particular

computer for an aviation company that is a target.

There's no way they're going through all this expense,

this whole operation planting this horse because they want to

get the invitation list to the Christmas party, all right?

They're going after the crown jewels. They need to get in and

find more about this technology.

If we look on, they get to the end of this, and it says,

"No new news. Should be an unsolved mystery." "Ho ho."

Now, bear in mind, it was an unsolved mystery for a long

time, for four years, until the defendant's arrest and these

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messages were discovered. You saw that Gu Geng and Tian Xi

were terminated in 2018 by Safran once this information was

discovered.

Bear in mind, if you go back to the cadre form, he did

well in 2014. They were proud of the work he did. That

happened to be the same year that he got the malware planted

in Safran.

But the hacking doesn't end there. If you turn forward

and you start talking about -- there's Sun Li who came and

testified. He was the IT person at Boeing, and he went back

and forth about how they contacted his parents, they recruited

him to come over.

And he kept telling them, I don't do the network

security. I do something else at Boeing. But bear in mind,

he's not an engineer. He's not going to be invited over for a

presentation with the AVIC professors or anything like that,

okay?

So why did they want to get ahold of him? Well, it makes

sense when you think of Gu Geng and Safran. If your job is to

get aviation technology from foreign companies and steal that,

you either need to work with the engineers or an IT person

inside. And they certainly went after that with Sun Li and

reached out to him.

And after they met with him -- remember he said he met

with a person named Cai in the hotel lobby, and they kept

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trying to pay for his trip. They kept pushing him. He's

like, You don't need to pay for my trip. But they kept saying

how they reached out to his dad, and there's pressure applied.

There's definitely pressure applied.

There's another one in the evidence here, Exhibit 93b,

where he reaches out to a Honeywell employee; and, again, he's

asking about their network security for the same reason. This

fits with Safran. This fits with what he's doing with Boeing.

He's trying to get ahold of IT people within aviation

companies because his goal is to get into their platforms.

And the only reason you want to do that is because you're

trying to get trade secret information.

The last part of the hacking is what he does with some of

the guests that came over for these exchanges. And as you saw

in there, this was called the "Eighth Division Apply

Techniques."

The foreign folks would come over. One of the examples

we showed you was Li Jiang from 2014. Here they applied the

techniques. It says, "The laptop was not turned off.

Therefore, it could only work on the hard drive." And he

apologizes and says, "Sorry for troubling you this time."

But they meet with him again. They talk about how, Hey,

the expert doesn't know my true identity. I approached them

under the name of the JAST. Don't mention the materials. All

right.

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So what happens after that? They have another meeting in

December 2014. This is from his calendar. It's from the

defendant's own calendar in the cloud. It says how they

brought Li Jiang to Nanjing, and Zha held a banquet, and they

applied the techniques. And what were the chats that happened

during that? That's how we know what it means by "Eighth

Division Apply Techniques."

It goes through and talks directly about how they're

working on the laptop computer, one portable hard drive, two

small drives. They brought him back to the hotel for him to

start dinner with Zha Rong. And then while they're doing

that, they are up in the hotel ripping off the guy's computer.

It goes on, saying, "Copying the entire thing needs three

hours." And his boss, who is down there at dinner, says,

"Speed it up. That's too long."

They go on and talk about how they're done -- if we go

back, they talk about how they're almost done, and they will

restore the scene. "Restoring the scene" meaning they're

going to clean up the hotel room that they just broke into and

get it back to where the person doesn't suspect that we just

ripped off what was in his computer. This is what they did

here in this occasion for one of the guests that they invited

over from an aviation company.

Now, there's one other example we sent in, talking about

how in April 2014 there was another individual who came for an

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exchange, the Eighth Division Apply Techniques. That's the

defendant's own words. And you see later on he has a message

from where he has to tell his boss that the guest has it

turned off, all right?

So it's pretty clear what's going on here. Not some kind

of -- you know, there's no explanation for this, other than

they're recruiting, they're targeting these aviation

employees, bringing them over, and this is one of the methods,

one of the techniques that they can use to get the information

that they want.

Now I'm going to turn to the GE portion of it here. But

I want to at least mention, for Counts 1 and 2, what we've

talked about already in terms of the recruiting of the guests,

these exchanges, the Safran incident, the hacking in the hotel

rooms, you know, trying to use these compu- -- the exchanges

to get into IT people, all of this process, the whole

recruiting process that he describes in detail in the Gao

recording, this is enough for Counts 1 and 2.

Counts 1 and 2 is proving a conspiracy to steal trade

secrets, both economic espionage or trade secrets, for

Counts 1 and 2. You've already got enough before you even get

to the GE portion.

Now, the GE portion is definitely part of Count 1 and 2,

and that's what I'm going to turn to, but I want to make clear

to you that you may already be convinced that there is enough

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there to convince you of those crimes before we even get to

the events of 2017 and 2018 with GE.

But let what we just talked about, how he operates, all

the lies, the deception, inform how you think about what

happened with GE. Now that you know how he operates, and who

he is and what he does, that should color everything you see

in that whole exchange regarding the GE side of things.

Now let's talk about this. Up in Dayton, you know, not

far from here, a long time ago, a couple of brothers invented

airplanes, all right? They did so with their own hard work,

their own innovation, their own brainwork, all right?

And then up the road in Evendale, not far from here, is

GE Aviation, and they continue on that tradition of

innovation, of great technological advancement when it comes

to jet engines.

As you heard, to build a competitive engine, it needs to

be light, it needs to be durable. And one of the key

components for GE Aviation engines is the use of composite fan

blade technology and composite cases.

What GE is able to do by building this kind of mold, this

very complex mold, and use lightweight composites to make

these fan blades, it makes them lighter. They're stronger.

They last longer. They require less maintenance.

By being lighter, it means the whole plane's lighter.

They can fit more people on the plane, or they can go further.

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It's more money for the aircr- -- you know, for Delta, or

whoever is running the aircraft. It's more fuel efficient,

all right? It makes them the leader; the leader in the world.

And other companies have tried. They have tried to

develop similar or competing technology. They talked about

how Rolls-Royce, you know, has tried. They tried once before

and nearly bankrupted themselves. Now they're trying again.

They've got one in development, hasn't been certified, is not

on a single plane.

So for the last 20 to 30 years, if you want an engine

with composite fan blades, there's only one show. It's GE.

So for China, whose goal is to develop their own plane, some

day develop their own engine so that they don't have to buy

all of this stuff from foreign companies, they need to figure

out how to do the same thing.

And so composite fan blade technology is a very logical,

understandable target for them. And they certainly did it in

this case.

What you cannot deny is that even as other folks have

tried to develop the same technology, it takes time. It takes

years. It takes millions of dollars. Even if someone can

acquire some of the technology and shave off that time and

save some of that money, it is of huge benefit to a competing

entity so even a little piece helps.

They have tried to pour -- competitors have tried to pour

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money into this and develop a similar thing; but, at the end,

the GE technology still stands alone. It doesn't have a

competitor that actually is on the market.

So if this person's job is to get trade secret

information from aviation companies, and you need to get a fan

blade, a composite fan blade, well, there's only one target

for you, and that's GE.

So sure enough, they look on LinkedIn, they do their

spotting, they do their assessing, and they identify

Dr. Zheng, the GE employee that came in here and testified.

And you know the whole story; how they recruited him, how

they first got him to come over for the initial visit. They

used a proxy, Chen Feng, to recruit him.

He suggested the topics for the meeting. Got him to come

on over. They go forward from there. Again, when he's there,

he decides to come over, and one of the things we point out is

in that exchange with Chen Feng, as he's getting ready to come

over, at one point the GE employee doesn't respond quick

enough, and then you get this email from jastxyj saying, "Did

you receive the earlier email? Please confirm." And he signs

it "Chen Feng," all right?

But this is Xu Yanjun jumping into the picture because he

knows -- you know, he's behind this. Sure enough, he comes

over for the visit and does the presentation in June of 2017.

Again, they meet multiple times. He meets -- obviously,

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he meets him under the alias, doesn't use his true name.

Introduces him to another MSS person, Director Ji. They have

tea, lunch, dinner, do the presentation, give him cash, send

him on his way, all right? Fortunately, he didn't bring his

company computer.

And if you go back and look at the calendar references,

it shows Chai Meng met with him the day before, met with Xu

the day before to talk about this meeting.

Now, one thing to keep in mind, and this goes for

Dr. Zheng, Mr. Gao, some of the deception, you need to

understand how they talked with their own companies. He

didn't tell GE he was going over there. Same thing with

Mr. Gao.

Folks like this, they get recruited over. Whether they

know exactly who they're dealing with may not be clear.

Obviously, they do get lied to, but they lie to their

companies. They didn't tell them about the trips. They

didn't tell them they're getting paid in cash.

Why they do it, there may be a lot of reasons. It could

be ego. It could be money. It could be some desire to help

the old homeland. It could be pressure. It could be just

disgruntled. But bear in mind -- and we don't want sympathy

to be any part of this -- there could be a lot of motivations

for what's going on here on both sides of this; not just Xu,

but the people he's recruiting over.

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His job is to seduce them and exploit them, exploit

whatever emotions they have, slowly, and then you can see how

it worked.

Now, in the operation, as you heard, they found --

eventually, the FBI went and interviewed Dr. Zheng and

convinced him to cooperate. He did this with, obviously, you

know, his counsel.

I think in the opening, the defense talked about "they

broke Dr. Zheng." You can decide -- you saw him testify -- if

you saw anything that indicated that.

There was testimony from him, from the FBI agent. They

treated him politely. They even looked after his own

security. There was no evidence of that. He was simply

confronted, and he decided to cooperate. Any discussion of

breaking Zheng is just a red herring.

So let's turn to the actual communications. At that

point, the FBI reached back out to Chen Feng. Well, actually

before that. Obviously, he had said thank you. So they reach

back out to Chen Feng to connect with him again, and then Chen

Feng does the handoff to Mr. Xu, and they're off and talking

with Mr. Xu, okay?

So as we go through this, you'll see that they talk about

when he can come back. And we get to this point where in this

message, Mr. Xu states -- and we're in January 9, 2018, he

states, "He will see what technology is desired and let you

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know what to prepare. For your end, please prepare the plane

ticket," and explains the rest of it, and then chides him to

pay more attention to WeChat, okay?

So note, he does let him know that he will tell him what

to prepare so, obviously, the GE employee asks what he should

bring. There were communications about should I bring this,

should I bring that, until we get to his communication about a

week or so later, when Mr. Xu, still using his alias, says,

"Right now there's nothing for you to prepare on my end."

But then the message after that is -- excuse me. Is a

few days -- actually, a week or so later, the message from the

GE employee mentions speculation about laying off in his

department.

And as you heard from the testimony, there were layoffs.

There were public reports, if Xu wanted to confirm that in the

news. There were press reports that there were layoffs at the

time. So he indicates that he's concerned about that, and

that's why he's trying to collect.

So immediately, for an MSS officer, that shortens the

time period and puts a little bit of urgency. And we

definitely see a change in what Mr. Xu does from this point

forward.

He tells him right there, "Okay. Try your best to

collect, and we can talk by then."

And then he says, "Domestically, there is more focused on

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the system code." All right. That's a collection target.

That's tasking.

As we go to the next slide, he clarifies, "What exactly

do you mean?" Xu gives him a clarification of what he means,

"The system specification and design process." And he gives

him an email to send it to.

Again, this is tasking. This is trying to get your

target to start collecting information for you, just like

Mr. Olson testified.

As we get into this, let's take a look at this message

right here. You heard once again from the defendant, where he

said, "It might be inappropriate to send directly from the

company," right?

Again, company security is just a nuisance. It's an

obstacle for him to circumvent, and he's looking for somebody

who is willing to do that with him. So it's right here that

he is targeting information he believes would be trade secrets

because he knows there's company security. He wants to get

around it.

He gives him a new email to help circumvent the process.

And then they move on to where the GE employee sends a slide;

and, again, GE came and told you that they had changed some of

the information on here to make sure they weren't revealing

anything too sensitive, but it does indicate it's proprietary,

and he sends this along, saying "is this what you mean by the

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system code" to help clarify what was already asked for, what

was already demanded by the defendant, Xu.

What's really interesting is what happens after this.

Two emails right in a row on -- as we get into the May 5th

time period. He sends this email where he says, "Here are the

domestic requirements that I know of. Can you take a look and

let me know if you're familiar with those."

All right. Remember from Mr. Olson, where he talked

about you meet with the experts, you define the requirements

of what you need. Intelligence officers don't waste their

time looking for stuff that's public. They may use that to

define what the requirements are, but what they are trying to

do is figure out what they don't have, what is not public that

they need.

And so he goes and gets requirements from the experts in

China, and he delivers them here in an email to the

GE employee. He even calls them domestic requirements.

This is a complete hallmark of an intelligence operation,

and they're clearly tasking him to get into something that is

trade secret.

Let's go to the actual requirements. You heard Mr. Kray

from GE testify about these. What he told you was these are

pretty good questions. These are pretty good questions.

They're looking at stuff that if you answered these questions,

if you got into the information behind this, yes. Yes,

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absolutely, you would be getting into GE trade secret

information.

So did the defendant ask for trade secret information?

Yep. It's right here in an email. He even calls it domestic

requirements. They didn't even bother to change some of the

language. It's written asking for "foreign countries

structural materials of rotor fan blades" all right.

They know they're targeting foreign technology. They

didn't even bother to change the language in their document

when they sent it over to him. They wanted to know foreign

countries' composite material rotor fan blade details.

And a lot of this stuff, when you start getting into

prepreg, which is the material that they use, and then all

these different tolerances, how they put together the

composite, the orientation of it, that's some of the secret

sauce. And Mr. Kray said, "These are good questions. They

are getting at it. They are really getting at what we do."

That was on February 5th. That wasn't the only thing he

sent. He sent a second email same day. By the way, at this

point, all that was sent to him was just saying, Hey, I might

be laid off, so this is a good time for me to collect. That's

all that happened.

At arrest, he took over. He was the aggressor. He is

the one going after it. Sends these two emails. One with the

domestic requirements where he is directly targeting "here are

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the questions, we need answers" regarding GE's trade secret

technology.

Then he makes a more aggressive statement, saying, "Here

are the instructions. Can you download a directory of your GE

work computer?" He gives those directions to the

GE employee.

At this time, they're still trying to talk about going to

China. Obviously, Mr. Xu thinks he's got a good, willing

source inside GE. He's asked for information that is trade

secret technology.

If you have any doubt about that, you can look at this

email, where he's told, Hey, the stuff you're asking about,

because the involvement of GE intellectual property and

commercial secret, such as the previous email I sent to you,

he's put on notice many times.

The actual email that sent that slide had the word

"proprietary" on it. He comes up with his own list of

questions, which does target trade secret information. Then

he's told in a message, Hey, what you're asking for is getting

into our IP, our proprietary trade secret information or

commercial secret information.

Did you see him slow down? Does he back off? No. Not

at all. This doesn't -- again, these are the -- he's blowing

through these stop signs. You know, this is just stuff for

him to get around. He thinks he's got a target, a willing

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target insider, and he's looking to exploit it. He thinks the

door's open a crack, and he's trying to bust it down.

So we get into this. He says regar- -- he emails back,

"Hey, regarding your concerns, let's just talk about it when

you get back to China." Kind of blows him off there and moves

on.

Again, he still thinks he's coming back to China. So at

this point, the GE employee backs off. And this is the FBI

operation, all right? I think it was made clear by the agent,

this is Agent Hull sending these messages, you know, as the

GE employee.

He sends the messages and says, "Hey, sorry. I can't

come back. I've got to go to France for work." He did not

invite him to France. He did not tell him anything else. He

just says, "Sorry, I'm not coming to China." Period. Okay.

Then he also says, "You asked for the directory. I'll

get you the directory." Okay. All right. And they talk

about maybe they can meet some time in the future.

But he says, "I know you asked for the directory. I'll

send it over," okay?

So after we go through the process, I think you heard

that described, how GE went through the process of actually

compiling a real directory off of Dr. Zheng's computer and

then went through and deleted what they needed to to protect

their own information. That was provided to the FBI, and they

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were able to send it over.

This is sent on Valentine's Day, February 14th. Okay.

Up to this point, he had been pushing, pushing, pushing. Then

he finds out, oh, he's not coming to China. Then he gets a

directory.

And all the sudden, Hey, let's meet in Europe. Suddenly,

Xu is the one pressing to meet him somewhere else. Says

obviously he's not going to meet you in the U.S., but he wants

to see if you're visiting any other countries and wants to see

if there's a way where they can still meet.

Obviously, the director, he has whetted his appetite. He

thinks he's got an insider who's willing to give him

information; and, again, he is trying to exploit it and get

whatever trade secrets he can.

Same day he sends all those messages, he sends an email.

This is a pretty anxious person at this point. He wants to

know, "Hey, when are you coming back? By the way, I've got

some questions about the directory" that he asks at the

bottom, all right?

You get the response back. The GE employee doesn't

commit to any of this. It was never suggested that he meet

with him in Europe. This was all Mr. Xu pushing, pushing,

pushing.

He continues to try to press for details to see if he can

meet; and, again, the GE employee deflects, you know, kind of

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backs off, plays a little bit hard to get.

So he talks about trying to -- you know, can you please

make the arrangements. This is Xu telling him make the

arrangements so that he can make his own, all right? And he

keeps pressing and pressing, okay? Again, looking for more

details, okay?

Then there's a phone call. He tries calling. He says,

"Hey, sorry I missed your call." That tells you how anxious

he is, that he went ahead and tried to call the GE employee

spontaneously because he hadn't quite gotten any commitment as

to where the guy was going. That tells you how much he's

pressing him.

Then the GE employee sends back a clarification for his

questions. This is responsive to Xu's own questions about the

directory. But then they do set up a call. And the phone

call is pretty revealing. A lot of it gets into the

logistics. A lot of it is talk about his personal life and,

as Mr. Olson explained, this is part of what a case officer

tries to develop in terms of understanding a target and

knowing their whole life.

But what's really interesting is when the topic of the

directory comes up. And by the way, it is Xu that brings it

up. They're talking about now maybe we can meet in Europe.

And he says, "By the way, the document list that you sent last

time is pretty good stuff. I wonder if it's convenient for

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you to bring that stuff." He's telling him to bring the

computer to Europe. Wants to see if he can bring it along,

all right? Yet another tasking.

He previously asked for stuff related to the system code.

Then he sends the domestic requirements, wants those answers.

Then he says, "Hey, can you print a directory?" He gets a

directory and says, "Hey, bring it. Can you bring the

computer?" It's tasking after tasking, where he is initiating

the action.

He's asking, demanding, trying to get this information,

inside information. Somebody he knows. It's a composite

expert inside GE that he thinks is on the outs with the

company. He wants to get this stuff. He wants the crown

jewels, the trade secrets. He asks him to bring the computer

with him. Again, nobody else brought this up. This was Xu

bringing this up.

They continue on in the conversation, and he talks about,

"Hey, can you export it out?" Not just bring the computer.

Can you actually export this stuff or download it.

And as you see in the instructions, the jury

instructions, about different ways in which you can commit

these trade secret crimes. It lists all those different

verbs, you know: copy, photocopy, sketch, draw, download,

things like that. Copy, duplicate, this exploiting the stuff,

it's right in line with those instructions, okay?

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He asks him, "Can you export the information out of your

GE computer," all right, because he wants to get it in a

portable hard drive.

They continue on. And this is an interesting thing that

talks about the insight of an MSS officer who is trying to

develop a long-term relationship. He says, "We don't have to

rush because if we're going to be doing business together,

this won't be the last time," right? Notice that phrase

"doing business together." This is a transaction. This is

purely transactional. Quid pro quo, all right? He is trying

to get as sensitive information he can from somebody he can

exploit inside the company. As Mr. Olson explained, just like

a spy would. That's what they do.

So as we get into this, here's some more in the phone

call. They talk about how, hey, some other things we can just

talk about in person, all right. They're not going to talk

about everything. We're going to wait until they get there.

So as we move on, they have some chats. They're getting

ready to meet. At this point, they talk about it, and the

GE employee mentions -- through Agent Hull, they send a

statement saying, "Hey, I don't know if you're going to be

able to read this when you get to Europe," in terms of

downloading it from my computer.

And he clarifies, "Hey, does this mean I will not be able

to view these documents after I bring them back?" So if there

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is any doubt, he's alleviated that right there. His plan was

to get the documents and take them back to China, okay? He's

very clear. "Does this mean I won't be able to view these

once I bring them back?" All right.

And then later on he says, in the next part of it, "Is it

possible to dump to a portable hard drive or a USB drive from

the work computer in advance?" Okay. Again, he repeats the

tasking. Let's dump it to a hard drive in advance so that

it's an easy handoff.

One more here. As if the others weren't enough to

convince you, one more here. A few days later, he does it

again. This is now several times he has asked him to download

the information, and he throws this out, "Anything else will

do." I've got you working on the cake, can you throw in any

icing, because I'll take anything you can download.

Again, anything design related. He knows he's talking to

a composite expert within GE. It's a key target. He's

trying -- and he thinks the person is on the way out, and he's

trying to get as deep and as good a information as he can get,

and as much as he can get.

By the way, going back to that slide, notice the word

"download." Again, that's one of the words in the

instruction. The word download, that's one of the ways you

can commit these crimes.

So, again, they fight over the location. At one point,

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he suggests -- you heard the conversation from the translator,

who talked about how they had these various phone calls, and

they talked about fighting over where to meet. At one point,

the defendant suggested we can meet at a train station at the

border. That's how desperate he was for the handoff. But

eventually, he relents and agrees to meet, okay? They set up

the name of the coffee shop, and they're there.

Now, we'll get to talking about the meeting in Brussels

here as I wrap this up, but I do want to note, look, with

respect to these attempt crimes, well, the conspiracy crimes

and the attempt crimes which cover the GE stuff, he's already

committed them. You know, he's already taken numerous

substantial steps toward this.

He's already asked for the trade secrets multiple times.

He's tasked this person over and over again trying to get him

to dump this computer. Okay. It's done.

So let what happened in Belgium just further confirm for

you, further resolve all doubt that that's exactly what was

happening here and that that's what he intended.

He had already taken many substantial steps and committed

these crimes before he had even stepped foot in Brussels.

A line of person in his work, he knows he's committing

the crimes. He knows he's taking a risk by going to Europe,

okay? Most of what he's done that we showed you, he's doing

inside China where he has protection, all right?

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For him to leave and go to Europe is a big risk. He's

going to have to lie to the French folks to get his visa,

which he does, and he's going to have to go to Europe and take

that risk, and he knows that that's what he's doing.

But that tells you something. That tells you how

valuable this information was and that he thought he had the

mother lode. He thought he was going to come back a hero to

the MSS, maybe get Zha Rong off his back. That's what he

thought. And that shows you, by the fact that he was so

desperate to set up these meetings and to take the risk and

come to Europe and to come to Belgium.

So look how he came. He brought his cash, and he brought

the devices to download everything. Remember there was a one

terabyte hard drive that was found. There were several SD

cards that you could download information on to, large

devices that -- large storage devices that were pretty much

empty. They were ready for copying. He was anxious to get

this jackpot. So he brings the cash.

He brought the multiple phones, which we already talked

about, including the 5s. Mr. Xu Heng also brought two phones.

He brought these devices. On there, they used the codes. He

even knows what he does is risky, sends the message to his

wife about if something happens.

Now, there were two particular photos that we pointed out

to you that were on the phones. One in particular was this

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list of questions related to the fan blade technology. And

what this showed you was, you know, his notes on some of the

things he wanted to discuss and follow up on the information.

The other list, as Mr. Olson explained, this is very

symbolic of the type of list that typical CIA officers and

intelligence officers use when they are trying to profile an

asset.

These were the two lists of questions that he had on the

phone when he showed up in Belgium, along with the cash and

along with the storage devices.

And then he also had this. You heard the testimony that

on the phone, one of the phones, they had downloaded over

200 pictures of the GE employee from the GE employee's WeChat

account. They had been WeChatting, so he would have had

access to it as a friend.

And there was a lot of testimony about how that might

have been used, what that might have meant. What's

uncontroverted is that he did, in fact, download those

200 pictures, put them on a phone and brought them to a

meeting. May mean a lot of things. First of all, it's just

creepy.

What it's not, it is not normal. This is not the normal

behavior of somebody engaging in legitimate activity. This is

somebody who knows and engages pretty regularly in criminal

activity, and this is the type of information you bring for

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leverage, for intimidation, maybe simply background

information, but it's not normal.

This is not somebody seeking public information. This is

not somebody seeking something innocently. This is an

operation, an intelligence operation. And every single piece

of evidence leads you to that conclusion. That is exactly why

he brought this stuff.

It was an operation, and these were two MSS spies showing

up in Brussels to complete the job. They brought everything

they needed to get the laptop. They brought the cash. They

brought the pictures. They brought further questions, because

they knew who -- he knows who he is, and he knows what crimes

he's committing.

One last point of emphasis that -- and then afterwards,

they wipe the phone. Mr. Xu Heng is released from jail, and

the next day we showed you the iCloud records showing one of

the phones was wiped, and that goes back to an iCloud account

that Mr. Xu Heng had used.

So at least for his associate who got released, he

immediately turns around and tries to -- and actually does

destroy evidence.

I want to, first of all, emphasize the GE portion of it

that we just walked through. So it began and ended with what

happened there. That's applicable to the conspiracies in

Counts 1 and 2. It's also applicable -- it is the main part,

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it is the part that is in Counts 3 and 4, which are the

attempts, all right? And we believe that the evidence in

there supports all of those.

I appreciate your patience. I want to leave you with one

last thought.

So here in America, we are -- we use the phrase "we're a

nation of laws." And the laws in this case, trade secret

laws, espionage laws, are set up for one fundamental

principle.

You can develop technology with your own innovation, your

own hard work. You can buy it. But you can't steal it.

That's what the law is for, to tell you you can't steal it.

We learned this when we were kids. You don't steal.

And what you saw in the evidence in this case was over

and over and over again how Mr. Xu, the MSS, and his other

colleagues in these China entities had been engaging in a

large, concerted effort to engage in this kind of theft of

trade secrets from aviation companies in the U.S. and in

companies around the world.

And the compelling evidence that you heard in this case

came from his own words, came from his own mouth; his

recordings, his chats, et cetera. It shows far beyond any

kind of reasonable doubt who he is and what he does.

He is Xu Yanjun. He is a spy. His job is to steal

aviation technology and trade secrets. He does it by luring

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employees over to China and exploiting them, stealing from

them, doing whatever he can, compromising them.

He engaged in the Safran hacking and helped plant malware

on an aviation employee, and he extensively went after a

GE composite engineer and tried to get the entire GE laptop,

including all its trade secrets that were on it.

That's who he is. That's what he's done. And he's

guilty. He's guilty of all four crimes.

And on behalf of the United States, we ask that you

return a verdict of guilty. Guilty on all crimes.

Thank you.

THE COURT: Thank you, Mr. Mangan.

The government has presented the first portion of its

closing argument. It's 1:00. We're going to break for an

hour and 15 minutes so you can have lunch upstairs.

Take the break. No discussion among yourselves yet.

We're not quite there. Continue to keep an open mind. We

still got a closing argument to hear. No independent

research. No discussion with anybody.

Enjoy your break. Enjoy your lunch. Out of respect for

you, we'll rise as you leave for an hour and 15 minutes.

(Jury out at 1:05 p.m.)

THE COURT: The jury's left the courtroom. The door

is closing. We're about to break for an hour and 15 minutes

for lunch.

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Is there anything that requires my attention before we

recess from the government?

MR. MANGAN: No, Your Honor.

THE COURT: Defense?

MR. KOHNEN: No. Thank you, Judge.

THE COURT: All right. See you at 2:15.

(Lunch recess.)

THE COURT: We're back in the open courtroom, on the

record. The government's team is here, defense team is here,

including the defendant and two interpreters.

Are we ready to get the jury from the government's

perspective?

MR. MANGAN: Yes, Your Honor.

THE COURT: Are we ready from the defendant's

perspective?

MR. KOHNEN: Yes, Your Honor.

THE COURT: Let's call for the jury, please.

(Jury in at 2:21 p.m.)

THE COURT: You may all be seated. Thank you.

Members of the jury, all of them have returned to the

courtroom after the lunch break. Welcome back. Thank you for

your close attention.

We'll now proceed to hear closing argument on behalf of

the defense.

MR. KOHNEN: Thank you, Your Honor.

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THE COURT: You're welcome.

MR. KOHNEN: May it please the Court, counsel, my

esteemed colleagues, ladies and gentlemen of the jury. Good

afternoon.

Like Mr. Mangan, I, too, want to thank you for your

service on behalf of Mr. Xu and on behalf of my colleagues.

We couldn't do it without you, and we really appreciate your

attention.

What I'd like to do, as soon as I get this frog out of my

throat, is ask you to remember a couple of very important

principles as I go through my presentation this afternoon.

I want you to remember Judge Black's instructions. I

want you to remember his instruction about the burden of

proof, and I want you to remember especially about the

presumption of innocence.

With respect to the burden of proof, remember proof must

be beyond a reasonable doubt in order to convict. I don't

want you to ever let that leave your peripheral vision during

my presentation, if you would, please.

Almost as a matter of housekeeping, what I'd like to

do -- it will be a little bit redundant, but what I'd like to

do is reply to a couple of the points that Mr. Mangan made

during his closing argument before I begin what really amount

to my prepared remarks.

As I said, it's going to be a little bit redundant, but

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that way I won't miss anything, and I hope I'll get the

important stuff to you.

The first thing that Mr. -- or at least one of the first

things that Mr. Mangan talked about was this vast conspiracy,

a mountain of evidence. And he talked about -- and he was

talking about the conspiracies that allegedly began earlier, a

conspiracy that involves the People's Republic of China as an

unindicted coconspirator.

Ladies and gentlemen, that's 1.4 million people. So

rather than consider the intent of 1.4 plus million people or

their representative or representatives, let's do what we came

here to do. Let's focus on one person, my client, Mr. Xu.

This is a man and the only person whose guilt or

innocence you are here to decide about. You want to decide

primarily about his intent and his knowledge. His intent, his

knowledge. Not Chen Feng's, not Zha Rong's, not Tian's. His.

Another thing I want to tell you is, Mr. Mangan's remarks

to the contrary notwithstanding, this case is very much about

GE Aviation.

All of the other companies that Mr. Mangan named and who

might be named in these overt acts are tangential. They're

tangential. They bring the government's conspiracy back to

2013, to be sure, and that's by design. But the focus of this

investigation began, you'll recall, with General Electric

Aviation, and I submit that that throughout has been the

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primary focus.

A couple of -- I'm going to jump around a bit. I hope

you'll forgive me. But one of the things I also found

puzzling, a bit troubling, is this expressed belief that

Mr. -- Mr. Mangan's remark that Mr. Xu thought that the

material that he was storing in a cloud that ended up on a

server in California was never going to see the light of day.

How does a man as sophisticated as Mr. Olson claims, as

sneaky as Mr. Mangan and Ms. Glatfelter claim, miss that?

Ladies and gentlemen, I have an iPhone. I submit, I

suspect that probably at this time more than half of you have

iPhones, or at least half. We allow our information to be

stored in the cloud and, ultimately, on an Apple server

because we've got nothing to hide, right?

Another thing that puzzles me -- and Mr. Mangan tried to

explain it away, but how does a man who is a superspy travel

under his own identity? How does a man who is taking a

sneaky, nefarious, undercover trip to the Paris Air Show, of

all people -- of all places, travel under his own identity?

If this was such an important project, such a secret

project, such a stealthy project, don't you think he would

have been able to obtain a counterfeit or even a genuine

Chinese passport in a second name? Folks, these things don't

make sense. It's because they're cobbling things together and

trying to make them fit.

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Now, different identities, I think -- I get the sense

that we may all be on the same page. I mentioned in my

opening, I thought it was kind of cute, when you log on to a

company's website and you see that attractive young person in

the bottom right that says "Hi, I'm Jane. How can I help you

today?" we know that's not Jane, right?

But the fact of the matter is -- and part of what

Mr. Mangan said is correct. If Mr. Xu comes up to somebody

and says, "Hi, Yanjun Xu from the Ministry of State Security,"

you're going to go "whoa," right?

If Special Agent Hull went to Lowe's and introduced

himself to the person at the checkout as FBI Special Agent

Hull, you go "whoa." I'm a lawyer. I don't want people to

know I'm a lawyer sometimes when I'm dealing because they're

afraid I'm going to sue them. And when I was a federal

prosecutor, which I was for 16 years, I didn't advertise that

either.

So the aliases, I think we can understand why Mr. Xu

would hide his MSS affiliation. But one of the things I also

want to be careful about is this accusation that we ever

denied that Mr. Xu was using the alias Qu Hui. That's my

pronunciation.

Now, what I meant when I mentioned that in my opening

statement is something that we'll get to in a little more

detail. You're going to conclude -- you've already concluded

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that you can't tell who they're really communicating with on

the other end. You don't know whether it's Mr. Qu Hui, or

whether it's Mr. Chen Feng, or if it's Mr. Xu, or if it's

someone else, right?

I think we've got to come to accept that, folks, because

nobody knew for months that Mr. Zhang was actually Special

Agent Hull, right? I mean, it's a two-way street.

Mr. Mangan mentioned Linda Li. I'm not abundantly

familiar with Linda Li, and neither are you because we didn't

hear her testimony.

And I submit to you that maybe it would have been helpful

to hear her testimony. I think it certainly would have been

more helpful than the testimony we got from Arthur Gao and

Sun Li, and even to some extent David Zheng because they

didn't take us anywhere. They not only didn't take us to a

point beyond a reasonable doubt, they didn't take us to any

point of clarity.

And this claim that Mr. Xu is some kind of evil

recruiter. He's a recruiter. Nobody's ever hidden from that.

He's affiliated and works for MSS. Nobody's ever hidden from

that.

And while we're at it, you know, that recording of the

meeting he had after Arthur Gao's interview, when he talked

about security is tight, Mr. Mangan said that he refused,

you'll recall, to accept the security features that the

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company's -- or the security requirements that aviation

companies put on their employees. That's wrong.

Go back and look at that transcript, if you'd like. He

said security is tight, and he moved on. The fact of the

matter is, it reads to me and it will to you like he was

accepting that fact and they were going to do different

things; and, you know, that's precisely what started, at

least, to happen with David Zheng. And we'll get to that

shortly.

THE COURT: Can you keep your voice up?

MR. KOHNEN: I'm sorry. Yes.

Ladies and gentlemen, the other thing that I want to

confront right up front is this hacking of Safran and the

confusing confusion that the government has created between a

hacking event of the mother company in France and the malware

that was planted on the computer of the French Safran

computer -- Safran engineer, Hascoet. We'll get to that in a

minute, but I'd like you to please keep an open mind about

that because it's not as it seems.

These references to the Eighth Division and the applied

techniques are all very cryptic and kind of ill-defined here.

And Mr. Mangan said, and I think I'm quoting him, "It's

pretty clear what's going on here. A major component of the

first conspiracy and first attempt counts, and it's pretty

clear what's going on here." That does not sound like beyond

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a reasonable doubt to me.

I'm not going to get into a battle of words about whether

the FBI broke Zheng, David Zheng, or didn't break David Zheng.

You decide for yourself. Two FBI agents hot-boxed him,

interviewed him alone, unannounced, for seven hours. Do you

think that was a pleasant experience? Do you think they

treated him well? Oh, I'm sure they treated him like a king

after he joined Team USA, as they say, right? But that's when

they wanted something from him. I guess they got it on the

stand here.

By the way, the layoffs thing. Mr. Mangan tried to make

an excuse there for Agent Hull's lie when he had taken over as

David Zheng, and he sent an email purportedly to Mr. Xu saying

he was worried about layoffs, and Mr. Mangan said, "Well,

there were layoffs. It was in the paper and stuff."

Ladies and gentlemen, David Zheng had already been fired,

or at least on leave without pay. A layoff from GE was

probably the least of his concerns at that point.

Another thing, and I'm going to tell you this just in

case I forget. I thought that the words that -- the statement

that Mr. Mangan attributed to Nick Kray, the GE engineer, were

pretty telling, and they were words that I found and are

interesting.

Kray talks about what I think Mr. Mangan called a task

list, whatever it was, that list of questions that were on

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Mr. -- well, we think Mr. Xu's phone when he came to Belgium.

And Kray's testimony was, "Well, the information behind

this -- those are good questions, but the information behind

this, that would be our key tech information." I think "the

key technical information" was the way he referred to it.

How far behind? He didn't mean -- I didn't take it.

You're the judge. He didn't mean explicit answers to those

questions. He meant, and I think he said, Well, if somebody

knew what they were asking, and there was a conversation, and

they got layers behind these questions, then yeah, our key

information would be susceptible.

And, ladies and gentlemen, I don't fault anybody for

protecting that key information, but I want to make sure that

you all get the clear story so that you can make a fair and

objective assessment.

So let's talk about a couple of other things that this

case is not about. The government's efforts to the contrary

notwithstanding, this case is not about whether Mr. Xu was

employed by MSS. It's not about whether he was a spy, if you

want to call him a spy, whatever that means. And neither of

those statuses make him guilty in this case. Let's agree

absolutely on that.

And, again, these sort of frightening allusions -- with

an "a" -- to military and classified information, folks,

they're designed to scare you. GE doesn't make a polymetric

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[sic] fan blade for military aircraft.

THE COURT: Please keep your voice up.

MR. KOHNEN: I'm sorry. It's not about EARs

violations, it's not about iPhone violations. What this case

is about is the ultimate and only question for your

consideration, and that is has the government presented enough

evidence, a good enough evidence to convince you, beyond a

reasonable doubt, that Mr. Xu tried to obtain trade secrets.

The government has not presented sufficient information for

that.

Judge Black has instructed you on the illegal transfer of

science and technology, and it's a narrow definition. Please

read it and heed it because the evidence shows that Mr. Xu was

engaged in the legal collection of aircraft technology.

This case is about a man who was caught up in a

controversy between the U.S. and China over China's advancing

competency and abilities technologically. And this case is

about, I'm sorry to say, General Electric and the FBI trying

to send a message to China and to slow China's progress in

developing composite technology, which we all now know will

eat away at General Electric's market.

Believe what you will about the government's evidence in

this case, ladies and gentlemen, but there's no way that you

can conclude, beyond a reasonable doubt, that our client has

intended to steal trade secret information as Judge Black has

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defined it.

There's one place, as I mentioned earlier, where the

government's evidence falls woefully short. I'd like you to

think about the fact witnesses I mentioned: Arthur Gao, Sun

Li, David Zheng. What happened there? Nothing.

There were no requests for secret information. There was

no "ask" there. There was no "there" there. These were the

government's witnesses, and they were honest.

So let's talk a little bit about how the government

failed, and let's talk about Arthur Gao, a star witness. Poor

Arthur Gao. I mean, honestly, I repeat it, it's hard to

understand why the government even called him as a witness

because the bottom line to his testimony is what we have been

saying all along.

Sure, Mr. Xu was trying to -- was trying to cultivate

experts from abroad. Sure, he was trying to get them to share

their expertise. Sure, he paid them and wined them and dined

them, and that's -- what does that prove exactly?

Here's why Arthur Gao is the prime example. The MSS

literally had decades to get to Gao and to try to ask him for

trade secrets. That's what they wanted. He lectured there

beginning in 1997. By my math, that's 24 years ago. I think

Mr. Mangan talked about planting the seeds. Well, for crying

out loud, if you planted the seeds 24 years ago, don't you

have a garden by now? Nothing.

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He met with Zha Rong, this person Zha Rong at NUAA.

Nothing. He went to China in 2016. Nothing. They gave him

money. They paid for his flights, but no asks. They didn't

even -- he wouldn't even say that they said something like,

"C'mon, you know, make a few copies of your files for us" or

something. Nothing like that.

What did they ask for from him? "Anything will do." Do

you remember him saying that over and over in response to the

questions? "Anything will do. Art, just send us whatever you

can." That's the way it worked. That's what they were

looking for.

Gao goes to China in 2017. What's he ask? Four super

general presentation topics on engineering was his test- --

engineering presentation topics was his answer. He agrees

they had nothing to do with secret proprietary information.

In 2018, he talks about returning to China. You'll

remember Mujin. I think there was a certain fondness there.

He WeChats with her. She sends him some specific engineering

questions.

Once again, Mr. Gao describes them only as general

engineering questions. He was asked, "Anything from

Honeywell?" Nope. "Anything about product or material that

Honeywell was working on that wants you to keep secret?"

Nope.

The later technology that Gao shared, it turned out, at

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the very end of his testimony, I think you'll remember, was

stuff that he had worked on 20 years ago.

Go back to the judge's definition of a trade secret.

Something a company wants to keep secret because it provides

them with a competitive advantage and makes them money. Do

any of the questions that you recall or answers that Mr. Gao

gave reflect trade secrets as the judge has defined them?

They do not.

Meanwhile, poor Mr. Gao has to enter a guilty plea to --

what did he enter a guilty plea? Something completely

unrelated to this because, as he admitted, he made a mistake

and he said some stuff, unsolicited, to Mujin. That's how

they got him here. But he helped our case and not the

government's case.

So then we heard, and I think we have -- might have this

in the wrong order, but from this gentleman named Sun Li, who

is the government's star witness number two. He's the former

Boeing IT supervisor.

Mr. Mangan had a pretty fanciful theory about why they

reached out to Mr. Sun Li. I don't know if it's partially

true or not, but you remember Mr. Li 's testimony. And if

you're like me, you'll remember sitting here going, why did

the government bring this guy all the way from Washington to

testify about what amounts to nothing? There was no evidence

about trade secret. There was no pitch that he could help

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them with IT stuff. And despite -- this is important because

it shows where the government comes from.

Despite repeated questions trying to get him to say that

he was communicating with Mr. Xu and others because he was

afraid for his father's safety, do you remember those

questions? And you remember each time, Mr. Li said no. No.

He's not afraid. He wasn't threatened. This is the stuff of

spy novels, ladies and gentlemen. It's not real life.

Then we have star witness number three, Mr. David Zheng,

the most important of the government's cooperators, as they

call them. Mr. Zheng was a large part of the government's

case because almost all this case, as I said before, really

gets back to GE, and he was the GE engineer.

Let's talk about, very quickly, because we've gone over

these WeChats, et cetera, pretty much, but let's talk pretty

quickly about what we learned at least about David Zheng and

his interactions with Qu Hui, Chen Feng, Mr. Xu, or whoever,

before Special Agent Hull took over his identity.

He was invited to NUAA in March of 2017. He was clear in

his communications that he could not and would not discuss or

reveal trade secrets. That was a point that he made on

several occasions, and he was very clear about it.

It was understood from that point forward that only

Mr. Zheng was in a position to identify what was trade secret

protected information at GE and what was not.

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And that makes perfect sense, doesn't it, folks, because

if you know what a trade secret is, then it's not really a

secret, right, especially when it comes to the really exotic

and accomplished technology that Mr. Mangan described with

respect to GE.

Here's a bit of irony for you too. Mr. Zheng honored

that commitment to GE. He did not reveal trade secret

information, and they fired him anyway.

So on March of 2017, the first email from Chen Feng goes

out, and he says clearly -- and this goes out to Mr. Zheng,

"There is no restriction on the format of the exchange."

Mr. Zheng replies back and asks about the format again.

Chen Feng responds, "Our formats of exchange are diversified.

They can be adjusted according to your availability." He then

follows up a couple of weeks later asking about Mr. Zheng --

and this is very important. He says, "Can you send me your

preliminary thinking regarding the exchange you will be

doing." This isn't an ask. This isn't a directive

suggestion. This is "it's up to you, bud," right?

Zheng responds, "I don't know about the format --" he's

stuck on the format. He says, "Please provide some general

information." So he's basically asking Feng, Chen Feng, help

me out. What do you want?

Chen Feng replies, "Regarding the content of the

exchanges, the university would like to have you propose two

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or three of your specialized research topics."

Chen Feng then replies, almost the same day, and says,

"By the way, there's no restrictions on the format." Time

goes by. Finally, Chen Feng sends Mr. Zheng an email and

says -- makes some suggestive topics, and he says, "But you

can also propose contents that you would like to do in this

exchange in which you have expertise."

Zheng likes Chen Feng's topics, but he gives the warning

we've read over and over again, "I'm required to sign a

technical agreement with the company that I work for here.

Therefore, a lot of the work that I have conducted at the

company could not be shared," blah, blah, blah. And how does

Chen Feng respond? Basically, "Fine. No problem. We respect

that." You remember that, right?

So what happens now? That was May 21st of 2017. What

happens now is Mr. Zheng is working hard on his presentation,

which is going to happen the first or second day of April --

of June, pardon me.

Unbeknownst to him, Mr. Ritter and the folks at GE

Aviation are working hard trying to determine whether or not

Zheng gave anything up in his PowerPoint presentation, and

they find out that he didn't.

The important thing is during this time, which is, I

think, by my math -- well, anyway, it was some time, so -- let

me back up for a minute.

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So at this point, we're in May of 2017. We've got no

evidence of any intent, any ask, any intent to steal trade

secrets, and neither Chen Feng, Qu Hui, Xu, or anybody

followed up with David Zheng for five months. Five months.

David Zheng gets his non-prosecution agreement deal.

GE figures out that Zheng didn't give up any trade secrets,

and Special Agent Hull has to decide on what he calls an

operational pivot, which is jargon for, uh-oh, we better find

a new target, and they focus on Mr. Xu.

Also during that time, GE got Zheng's computer. They

analyzed it. They turned over the results to the FBI. Of

course, there was the interview of Mr. Zheng.

By the way, I want to remind you of the circumstances of

that interview, okay? It was done at GE. He was called in to

the big conference room. That interview was audiotaped and

videoed.

The agents weren't there when Mr. Ritter from GE Aviation

and his colleague met with Mr. Zheng. Instead, they were in a

different room listening to the audio and perhaps watching the

video, right?

Seven hours that interview lasted. He had no phone, no

car; eventually, some food. And he had to call his wife, but

he couldn't tell her why -- he had to speak in English. He

had to speak on the speakerphone. He couldn't tell her why he

was calling her or what was going on. Turns out she knew

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about the search, and he was questioned about that as well.

Do you think that that's treating a person well?

So then Special Agent Hull assumes Zheng's identity. He

makes up a fib to Qu Hui and says he wants to come to China to

give another exchange. He refuses to accept that these guys

won't specify the requirements for a presentation.

So what he does is he offers full access to General

Electric materials. He sends increasingly specific and

enticing emails, at one point sending even the Exhibit

Number 68 that Mr. Mangan showed you which, to the uneducated,

looks like the design for the Gen GE9X engine, which is the

latest and greatest, as we've all heard. But neither Mr. Xu,

or Qu Hui, or whoever, takes the bait.

But I think it's important to stop here and think about

that because, by all accounts, right now on this day, which is

February 3rd of 2018, Agent Hull, without being asked, has now

shared what is represented to be GE proprietary and trade

secret information.

That, of course, prompts questions coming back from

Mr. Xu, somewhat technical questions, questions that prompt

Mr. Hull, Agent Hull as David Zheng, to respond. And he says,

"I'm familiar with most of the topics you mentioned --" the

questions prompted by Exhibit 68, right?

And he says, "Regarding the answers to these questions,

some topics are more sensitive than others because the

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involvement of GE intellectual property and commercial

secrets, such as the previous email I sent to you --"

Exhibit 68, right? -- "regarding the topics mentioned in the

email attachment you sent," blah, blah, blah. In other words,

uh-oh, this is trade secret. I can't divulge. I can't answer

these questions.

It's a bit of a head fake, right?

The important thing that I want to stress is, you know,

Mr. Mangan says that my client, Mr. Xu, is charging ahead,

charging ahead, charging ahead. Whoa. Who's charging ahead?

Then we get around to it's still not clear who actually

suggested or mentioned for the first time this computer

directory, but I want to be very clear that the computer

directory is just that, the directory, and we're not talking

at this point yet about the contents that the titles of the

items in the directory are supposed to represent, right? You

guys remember all that.

And you remember that Special Agent Hull testified that

Mr. Ritter made up the directory. Mr. Ritter denied that, but

one thing we know is it wasn't Mr. Zheng's original directory.

We don't know, or at least we didn't hear what happened to

that.

So the thing reaches a bit of a standstill. And what

happens? Well, the FBI decides that we got to lure our man to

Belgium, and we got to go get our man, right?

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So they do whatever paperwork needs to be done here in

this courthouse, and they do whatever paperwork needs to be

done in the Kingdom of Belgium.

Mr. Hull, as David Zheng, lies about a trip to France.

He lies about being able to get away for the weekend. He lies

about logistics and travels so that he can lure my client to

Belgium, which, by the way, is a friendly extradition state,

and they arrest him.

Now, folks, in criminal cases, motive is always

important. The defendant's motive, but other motives as well.

The investigator's motives.

I'll call your attention to the jury instruction that

Judge Black gave you about testimony by law enforcement

personnel, right? At a minimum, to put it mildly, you're to

look into that testimony a little more deeply, a little more

carefully.

What we have here is a tight collaboration between

General Electric and the FBI. Now, Mr. Ritter, of course,

denied that. He's the cyber security vice president who

appears to have suffered amnesia from a head injury between

his direct testimony and his cross-examination, if you know

what I mean.

His memory was sharp as a tack for Ms. Glatfelter. When

I got up here to cross-examine him, he could hardly remember

his name, couldn't remember 11 meetings or contacts --

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11 documented meetings or contacts in a 7-month time with

Special Agent Hull and others.

What does that tell you?

He denied fabricating the Zheng made-up computer, despite

the fact that Special Agent Hull told us that he's the one

that put it together.

You know, the people we did not hear from General

Electric are the engineers who spent days poring over

Mr. Zheng's PowerPoint presentation to honestly conclude that

trade secret information had not been revealed.

You know, the witness, James Mulvenon -- I'm going to

pronounce it the best I can -- helps us with this. You know,

he talked about the incentives that companies like GE have to

keep China from advancing so they stay on top of that market.

He talked about continuing to sell products, announced

aircraft engines in China. He talked about continuing to

manufacture cheaply. And here we see General Electric

continuing to exploit China. Exploit and -- maybe that's not

the right word -- exist there, but in a very precarious state.

First of all, they've got joint ventures with AVIC and

others in China, right? Look at the slide there. We added a

little something to Mr. Mulvenon's slide.

They want cheap, educated labor. They want to get into

China's market. They want to take advantage of China's lax

environmental laws, but they don't want to share the

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technology. And that's where the tenuous rub is, right?

That's good.

So let's talk about some of the government's

misdirections. In their opening statement, at least, they led

you to believe that his job at MSS was to engage professionals

and to steal aviation -- knowingly and intentionally steal

aviation technology secrets. That hasn't worked out.

What this is, really, is nothing more than guilt by

association. And if you're part of MSS, this mysterious scary

organization that's filled with spies, you must be an evil spy

that steals aviation trade secrets and goes beyond your job

responsibilities.

The government, ladies and gentlemen, is playing on your

patriotism. They're playing to your fears. They're hoping

that you'll punish Mr. Xu and overlook their burden of proof,

but you have to be objective because you swore an oath to do

that.

You know, thinking back on Mr. Mulvenon's testimony for a

minute, his testimony confirms that open source collection

about science and technology and through other legal means is

part -- including personal and professional exchanges is part

of MSS's mission.

Now, not a single other government witness had any

knowledge regarding at least the Sixth Bureau of MSS, which is

where Mr. Xu allegedly worked. But it didn't surprise

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Mr. Mulvenon if the Sixth Bureau engaged in open source

collection analysis.

Also, Mr. Mulvenon testified that the MSS focuses -- oh,

I'm sorry, functions a lot like the CIA and the FBI, in that

they have both international responsibilities and domestic

security responsibilities. And that's very important,

especially when it comes to some of these wild-eyed

allegations about hacking and computer intrusions because, you

see, the Safran and these Eighth apply techniques references,

if they're references to computer intrusions at all, are

obviously instances where Mr. Xu and the MSS are handling

matters of state security, internal state security. It's part

of their name, the Ministry of State Security.

The only evidence that we've seen, testimony anyway that

we've heard, is from Mr. Hascoet, the engineer from Safran,

who, you'll recall, works for a Chinese subsidiary in China,

comes and goes between France and China, okay?

Now, China is a surveillance state. Mr. Mulvenon agreed

with that. I think that, to the extent he was able,

Mr. Olson did. Special Agent Adams agreed that these kind of

computer intrusions or hacks could be used to track

individuals and maintain state security.

We have not seen any evidence that trade secrets were

targeted, and we haven't received any information that such

things were exported or obtained through these computer

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intrusions, despite that promise being made during the

government's opening statement.

Quickly I want to go over the testimony of Special Agent

Adam James because it was pretty useful and it's right on

point here, right?

He conducted the forensic analysis of Mr. Hascoet's

computer, the Safran engineer. He said he was unable to tell

whether any information was targeted. Didn't look like any

information was extracted, even though MSS had access to this

fellow's computer-ness, I guess, for a month, right.

He acknowledged also, as I said before, that malware

could be used to surveil and monitor someone who travels to

and from work in China.

Also, remember Mr. Hascoet's job did not include anything

close to designing aircraft engine stuff. He was supervising

the manufacturing process, and he talked about when parts come

in, I think from Taiwan, for assembly, he makes sure that

everything's running well.

Mr. Zheng was asked repeatedly about his computer.

Wasn't it hacked? This was something that Mr. Mangan was

going to get to in a minute, the individual hacks, and I don't

remember whether he did or didn't, but the government would

not let it go. They asked him like three times was your

computer in exactly the same place, you know, did it not work

or whatever. There was no hack of David Zheng's computer,

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okay?

Ditto for Arthur Gao. Arthur Gao was asked that question

repeatedly also, and all he could say was I never even brought

my company computer to China when I came. So there's just

Mr. Hascoet, and his testimony doesn't add anything. Bottom

line, big, fat red herring. Distraction.

Speaking of distractions, I talked about this earlier.

We are not talking about export administration regulated

material. We're not talking about military material. We're

not talking about classified material. Don't get distracted

there. Don't get thrown off your game.

The government threw some references out, they even put a

witness on, I'm trying to remember how to pronounce his name,

Mr. Ramakdawala, and that's -- I'll help you with that

spelling. And that was all about military technology and EAR

stuff, and licensing requirements and stuff. I don't know

where we were getting with that.

That was a waste of time, until we got to James Olson.

Mr. Olson, you'll remember, is a long retired spy, and the

government called him, I guess, to demonstrate that everyday

occurrences in our life are spycraft.

I don't know if you guys remember Jeff Foxworthy. Jeff

Foxworthy used to say "you might be a redneck if you got your

grandmother's old refrigerator in your front yard," or

something like that. So we thought -- I thought immediately

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of Mr. Olson, the "you might be a spy if you have more than

one social media account," because he said that's indicative

of spycraft. Or if you have more than one email account,

ditto. Or if you have a nickname. Or if you contacted

someone through LinkedIn.

In the beginning of his testimony, he said that signals

spycraft. Or you have two cell phones. You shared a tea or

had a meal with someone, downloaded data on to a disk. Stop

there because I love that one. It kind of reveals his age,

folks, right? When was the last time anybody downloaded data

on a disk? And also when Mr. -- when he got out of the -- out

from undercover, it was 1997. That may be all we had back

then. And finally, if you attended a job-related conference.

These are normal, everyday things. I mean, look, if

you're willing to go that far, then you can create a little

diagram that is designed to convince people that anything's

true.

Again, Mr. Olson was on the stand, and he deflected your

attention. He has no knowledge of the Ministry of State

Security, no knowledge of the JSSD, Jiangsu State Security

Department. Never worked in China. Hasn't worked in

intelligence in over 20 years. Believes he knows what was in

the heads of Mr. Xu. You remember that special instruction

about -- special instruction about him.

It appears that the evidence that he was given -- that

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whatever he was given to prep, either he didn't read it or it

was insufficient because he says he read the emails. But if

he did, he didn't understand them because, as we all now know,

Mr. Zheng, as of November of 2017, was actually Mr. Hull, who

I think you'll agree, when you go back and look at those

emails if you need to, became the pursuer.

He didn't know anything about MSS's structures. He

didn't know what the Sixth Bureau did. He didn't know the

functions of MSS. He didn't know that they had a domestic

security function. He was unaware it collected open source

information. He had only a very basic understanding of MSS

and his mission. Frankly, his recruitment cycle that

Mr. Mangan showed you briefly is unsupported by the evidence

in this case.

As I said before, LinkedIn is a legitimate social media

platform that's used by millions of people.

Dr. Zheng, you'll recall, testified that tea, lunch, and

dinner with Mr. Xu as his host is expected and customary in

China. If you invite someone to China as your guest, you are

responsible for their food and lodging. It's not spycraft.

It's culture. It's not spycraft. It's decency.

Mr. Zheng testified -- remember Mr. Olson made a big deal

about the money. Mr. Zheng testified that the money paid him

for travel, for his lecture and his travel, was appropriate.

And he said -- and this is important -- that it's now common

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for people to be paid in U.S. dollars. Olson didn't know

these things. Olson's testimony is a wash. Olson's testimony

is unreliable.

Mulvenon, on the other hand, was helpful. Mr. Mulvenon

laid out for us the counterintelligence functions of the MSS.

He talked about extensive surveillance in China. He talked

about how hacking may also be or is also a technique that's

used for security. He agreed that cyber intrusions are a

legitimate tool for intrusions. He, like Olson, views China

as a surveillance state. China believes in total control of

cyberspace within its borders.

By the way, as I mentioned before, I think Special Agent

James from the cyber section at the FBI office in San Diego

agrees with that too.

Open source collection and analysis, Mulvenon said, is

one of the MSS's three biggest core functions. And he also

testified that intelligence is simply the analysis of

information to obtain value from that information and to

answer questions.

This is not the sinister, dirty, sneaky, corrupt project

that the government wants you to believe; but, importantly, as

Mr. Mangan said in part, at least, there is no secret recipe

to this absolutely fantastic technology that General Electric

Aviation has developed.

As Nick Kray said, even as Mr. Ramakdawala said, this is

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a building block approach, building block technique that

they've used. Lots and lots of trial and error, trial and

error. One step forward, two steps backwards; three steps

forward, two steps backwards. That's how they developed this.

And even Kray was clear. He talked about the coupons and

all the different applications. A Chinese spy was not going

to go to someone from GE and get the recipe for Coca-Cola, all

right? It just doesn't work that way.

And if you need to, go back and look at the evidence

and -- with this thought in mind: They're interested in the

process. They're interested in the stages. None of the

so-called key technology that Mr. Kray talked about was asked

for, right?

And, by the way, I thought his testimony was very helpful

to all of us, right? I mean, he educated us all. Seemed like

a good guy and a straight shooter. And I think he was

particularly straight when I -- as I mentioned before, he saw

the questions, remember, that were allegedly on Mr. Xu's phone

which he brought to Nanjing -- or, I'm sorry, to Amsterdam,

and he said, "Oh, these are good questions," right? "The

information behind these questions could get closer to our key

technology, and we'd be careful."

We're not here to tell you that they weren't trying to

get close. I mean, they wanted to learn what they could

learn.

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China was looking for best practices. They were looking

for the general approach so that they could advance their own

project, which you heard about, on polymetric composite fan

blades.

Look, they started by asking what amounts to -- for what

amounts to David Zheng's universe- -- Akron University Ph.D.

research. Remember that?

They weren't looking for the secret sauce, folks. They

were looking for directions on how to make the secret sauce,

advice.

The government has talked a fair amount about the

state-owned enterprises. And, you know, particularly, in the

very beginning of the case, during the opening statement, they

talked about AVIC and COMAC and NUAA and JAST and all these

government entities that are supposedly dirty and corrupt,

et cetera.

Well, GE has a joint venture with COMAC, right? I mean,

they're selling them their engines.

NUAA is very well respected. We've heard that. It's an

established university with a good reputation.

JAST is a large trade association.

Mulvenon agrees that it's not uncommon for universities,

particularly universities that specialize in aviation, to have

relationships with associations like JAST.

So let's talk about, again, what the evidence really does

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show. We're getting close to the net here, I think.

THE COURT: I'm not trying to be difficult, but keep

your voice up, please.

MR. KOHNEN: I'm sorry. I apologize.

So we've heard substantial information about China's

comprehensive program to collect and analyze publicly

available information from overseas.

We know from Mr. Mulverson -- Mulvenon, I'll get it right

one of these days -- that this is a key function of MSS.

We also heard Mulvenon testify about the importance of

human intelligence and the importance it plays in collecting

evidence; not in a nefarious way, but it helps with the

analysis of publicly available information. It gives you

up-to-date information, and it provides context. And that's

what Mr. Xu was doing.

Mulvenon agreed that obtaining guidance for collection

from government actors, wherever they come from, is not, in

and of itself, illegal.

And what about non-public, non-trade secret information?

This was something, I think you'll recall, Mr. Mulvenon spent

a fair amount of time on. He testified that the collection of

non-trade secret information is a growing focus of China's

collection efforts. He testified that this includes

information that may not be obtained through -- that may be

obtained, excuse me, through researchers, expert exchanges,

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presentations at universities, et cetera.

He testified, in essence, that the government may not

like these forms of intelligence gathering, but they're not

illegal. He testified that multinational companies might not

like these forms of technical exchanges, but they're not

illegal. He said that he believes this is an area that

requires new legislation.

What he was saying there, essentially, is that the very

statutes under which Mr. Xu has been charged do not apply to

the work he was doing. Hard stop. That's what Mr. Mulvenon

said.

The requirements that U.S. companies -- there are

requirements that U.S. companies transfer technology to China,

okay, and that's the pay to play that Mulvenon testified about

as well.

There's nothing illegal about it. And he said that

companies agree to these demands because they want access to

China's cheap labor. They want China's educated labor. They

want lax environmental standards. They want access to the

fastest growing market in the world.

And then we have China's joint ventures, right? We've

got GE, Safran, Boeing, AVIC, COMAC. They all have joint

ventures, and they all can be tenuous, but there you see -- on

the left side of your screen, you'll see that talent program

that I mentioned to you during the opening statement, a joint

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venture between GE, COMAC, and AVIAGE, which I believe is part

of AVIC.

You know, China does other things as well. They have

pretty much forced multinational companies to have research

and development labs in country, and that's Mulvenon's

testimony as well.

But despite all that, what's happened here is Mr. Xu, my

client, has become a pawn, a pawn in the tense place between

U.S. industries trying to exploit China and trying to get

along with China, right? And, you know, just one guy. He's

just one guy, right?

So if we're going to send a message to Xi Jinping, if

we're going to send a message to MSS, if we're going to send a

message to AVIC, to COMAC, to all these evil Communist

government-run companies, let's snatch that guy.

One of the things that Mr. Mangan talked about was he

accused Mr. Xu of not being normal, of not behaving. "This

isn't normal behavior." You remember he repeated that three

or four times. My question is, normal by whose standards?

Speaking of normal, Mr. Gao talked about how the

exchanges like we were -- he testified about how the exchanges

like he was setting up with Mr. Zheng were perfectly common,

that he'd been to several himself.

He agreed that expertise is shared and built up over

those things, and there's nothing wrong with talking about

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your experience. Remember he said that your employer doesn't

own your experience.

(Cell phone ringing.)

MR. KOHNEN: Hello?

THE COURT: That was unintentional. Seize the phone

and proceed.

MR. KOHNEN: Thank you, Judge.

May I have just a moment, Your Honor?

THE COURT: Yes.

MR. KOHNEN: One of the things -- kind of a loose end

here, forgive me. One of the the things I want to come

back -- circle back to is, you know, folks, one of the things

that really is going to be an important consideration for you

is trying to wrap your brains around who is speaking to whom

when, right? And, you know, that's particularly important

when you think about these Gmail accounts that the government

has worked so hard to tie closely to Mr. Xu, right? And yet,

with respect to only one -- even just one of those accounts,

it was accessed 55 times after he was arrested and after his

phone was put in a bag that blocked signals going out or going

in.

You know, folks, that puts this case in a whole new

category because Mr. Hull and Mr. Mangan and Ms. Glatfelter

have gone over email, after WeChat, after QQ. But, really,

when you talk about the burden of proof and reasonable doubt,

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how do you know who's talking to who? This is a big problem

for them.

I wanted to go over a couple of other things that we

mentioned during our opening because I'm pretty proud of the

fact that we told you like it was then.

We told you about this parallel investigation, this work

together between the FBI and GE, and I think you've seen it in

real life.

We told you about this setup, this frame job, and I think

you've seen it now unfold.

We told you about the legitimacy of expert exchanges.

We've heard testimony on that. We asked for the ask, right?

Does everybody understand what I mean by that? Where is the

ask for technological proprietary trade secret technological

aviation information? We're still asking for that.

We told you there would be no evidence that trade secrets

surfaced at all. There hasn't. We told you that the evidence

was going to reveal that Zheng never revealed trade secrets;

and, in fact, worked hard not to, and that's true. And we

told you most importantly that the relationship with David

Zheng was always premised on the understanding that he could

not and would not share trade secrets.

Folks, Judge Black, the government, the defense here, we

all told you to exercise your common sense. Please use your

common sense, and that's really all you need in this case

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because you can't vote to convict somebody of a crime that's

based on weak circumstantial evidence, innuendo, supposition,

and uncertainty.

You cannot vote to convict somebody who's told at the

beginning and consistently thereafter by the likes of David

Zheng that he will not share prohibited company trade secret

information.

You cannot vote to convict someone who justifiably relies

on his counterpart to protect the information that he or she

has a duty to protect.

There's a line somewhere, folks. There's a line between

information that companies would like to keep secret that

isn't trade secret information as it's defined, and

information that they just want to keep secret. I mean -- and

trade secret information, right, it's a line. It's somewhere.

Where is that line? I don't know.

The government's case never identifies where that line is

under the facts that they've laid out for you, so it remains a

mystery. It's impossible to find that Mr. Xu knowingly

crossed that line when we don't know where the line is. It's

impossible to find that he intentionally crossed the line when

we don't know where the line is.

There are a lot of competing principles in this case,

ladies and gentlemen, a lot of moving parts, and a lot of

unanswered questions. Let me throw out a couple of including,

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but not limited to, open questions.

Who was acting as Chen Feng and when?

Who was acting as Qu Hui and when?

How much did Mr. Xu really know about all of these

electronic communications?

Which, if any, of those communications did he actually

participate in?

If they were really seeking trade secrets, the folks at

MSS, how could they believe that David Zheng, the GE engineer,

was going to give them up, especially when he said repeatedly

that he would not do so, especially when the government's star

witness, Arthur Gao, never did so? Especially when star

witness, Sun Li, never did so? Are you getting a trend here?

They weren't looking for trade secret information.

The government has reached too far. They failed to prove

their case. Not sure why precisely the FBI and GE are working

so hard on this. Perhaps, though, perhaps we've seen an

example of how far the feds will go to protect and advance the

interest of one of their largest multinational corporations.

Sadly, as I mentioned before, there's a man who is caught

in the middle, and that's not right. That's not justice. And

when you look at this objectively, as you have sworn to do, as

you have sworn an oath to do, you will conclude, as you must,

that this one man -- full circle, this one man did not attempt

to steal trade secrets. He did not conspire to steal trade

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secrets. He did not do so knowingly, and he did not do so

intentionally.

Ladies and gentlemen, the government has laid out their

claims in the overt acts, and I just want to make sure that

you understand that those are just their claims, and they're

things that, if done separately, are perfectly legal and, when

combined, are perfectly legal as well if the object was not

inappropriate.

If there was any conspiracy on China's side, it was a

conspiracy, a joint effort to obtain information that was free

of trade secrets. And if you want to call that kind of joint

effort a conspiracy, good for you.

You've taken an oath to find the facts based only on the

evidence you've heard in this courtroom. You've heard and

seen evidence for two weeks now. That's a lot of evidence.

But when it comes to evidence, quantity does not equal

quality, as I said over two weeks ago.

This case, the government's case, is a nearly random

bunch of weak circumstantial evidence, a bunch of witnesses,

too many witnesses, who offered little or no -- little or

nothing toward the government's objective; and, frankly, at

times, really only helped our cause, our case.

The government's case is not a strong case. It's a weak

case, and you must acquit Mr. Xu when you apply the beyond a

reasonable doubt standard.

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Recall your instructions from Judge Black. In my

opinion, the most important of those instructions is the proof

beyond a reasonable doubt instruction at page 3 in your

instructions.

Mr. Xu is presumed innocent, not guilty. In order to

convict him, the government must overcome this strong

presumption. They have not. They had to prove his guilt to

each of you beyond a reasonable doubt; not beyond all doubt,

but pretty close. They failed.

We, conversely, didn't need to prove anything. We didn't

have to put on any evidence, and we chose not to because the

government failed to meet their burden.

Remember, in order to convict, you have to find guilt

beyond a reasonable doubt. So if you have any reasonable

doubt about any of the elements which the government was

required to prove, then you must do your duty, you must do the

right thing, and you must vote not guilty. And you should do

it on each of the four counts which the government, not the

Court, has alleged against Mr. Xu.

There simply has not been enough reliable quality

evidence presented in this case, not enough for you to do

anything other than vote to acquit, vote not guilty.

Think, please, about Judge Black's admonitions. The only

way you could vote to convict would be if you would base one

of the most -- I'm sorry, the most important decision in your

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life on the evidence that the government has presented here.

And don't forget the evidence that came out during

cross-examination. You know, when the government takes on a

knowingly case, when the government takes on an intentionally

case -- that's what we sort of call them as criminal

lawyers -- they must, as I said in my opening statement, I

hope you'll recall, take you inside the defendant's head,

inside the head of a man who lives literally one-half way

around the world, who grew up and lives in a culture that we

barely understand.

The government has failed to place you in his head. They

have failed to show you that Mr. Xu crossed the line that I

mentioned earlier.

Folks, this is a man from China. If we, as a nation, are

going to lure someone from a country halfway around the world

to a third country, a friendly country, where we snatch him

and we jail him, we need better facts than these. We need

better evidence than this.

Our Constitution now grants him rights, as well it

should. So our Constitution now guarantees that in order to

find -- that the government has to prove Mr. Xu guilty beyond

a reasonable doubt before this case goes any further. The

government has failed on all four counts to meet its burden of

proof.

You must, each and every one of you, each and every one

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of you, follow your oath, examine the evidence, do your duty,

and find Mr. Xu not guilty of Counts 1 through 4.

Thank you for your attention.

Your Honor, that concludes my remarks.

THE COURT: Very well. I'm inclined to take a break,

unless there's an objection?

MR. MANGAN: No, Your Honor.

THE COURT: You've been listening carefully. You've

been focused, as you have since day one. I'm not quite done.

The government gets the last word.

We're going to break for 15 minutes, get you back in the

courtroom at 4:00. The government will make its final closing

remarks, and then I'm going to send you to the jury room

briefly.

Out of respect for you, we'll rise as you leave for

15 minutes.

(Jury out at 3:46 p.m.)

THE COURT: The jury's left the room. We're going to

break for 15 minutes. Come back on the record at 4:00.

(Brief recess.)

THE COURT: It's two minutes to 4:00. We're outside

the presence of the jury.

Are we ready for the jury for a rebuttal closing argument

from the government's perspective?

MR. MANGAN: Yes, Your Honor.

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THE COURT: And the defense?

MR. KOHNEN: Yes, Your Honor.

THE COURT: Let's call for the jury.

(Jury in at 4:05 p.m.)

THE COURT: All members of the jury have joined us

after the break. Thank you for your continuing attention.

We're going to hear the government's rebuttal closing,

their last word.

Mr. Mangan.

MR. MANGAN: Thank you, Your Honor.

Thank you, ladies and gentlemen. I appreciate your

attention, and I will try to be brief.

So there were quite a number of things in there. I won't

address every single one. Obviously, you need to determine

what evidence you saw and what evidence you heard and whether

that convinces you beyond a reasonable doubt.

But keep in mind it's based on the evidence in here, not

wishful thinking, not what they wish had happened in this

trial. It's based on the actual evidence that is right there

in the defendant's own writings.

Some of what you heard, I think, was more of an alternate

reality, divorced from the evidence that you heard.

I do want to talk a little bit about he brought up a

point regarding, Hey, somebody's tried to get into the email

accounts after he was arrested. Well, bear in mind, he works

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for the MSS. Let's keep that in mind. After he was arrested,

the fact that there may have been IP hits going into his email

account are not terribly unusual, and there were other

explanations for that. But, again, that was just on the email

accounts. It doesn't go back to everything else you heard

about the attribution that takes all of the evidence right

back to this defendant, okay?

When they went and talked about, well, you know, who is

Qu Hui, who is the person behind the keyboard, that's what we

tried to show you time and time again, that it was him.

The text messages are from his phone number. He was

carrying that phone in Belgium. It's the same phone number he

puts on the business card for his alias.

When we talk about the voice recordings, Arthur Gao was

there. He listened to the recordings. Jason Wang, the

linguist, listened to those recordings. They also had

listened to the defendant. They said that's him, all right?

When they talked with Qu Hui about, "Hey, can we meet,"

and they set up a meeting in Belgium, who shows up is Qu Hui,

the defendant. When David Zheng met him in China, got the

business card and came into court and pointed him out and said

that's him, there is no mystery to this. They are just trying

to grab at whatever they can. It's desperation.

Now, one other thing I'd want to hit on. I know they

mentioned -- they didn't talk a lot about it, but we talked

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some about this hacking and the things that happened at

Safran, what happened with the Eighth Division. And they

said, well, you know, he's part of state security. Maybe it

was state security.

Well, did you hear any evidence that that was part of

some state security operation? Remember in the evidence, he

said he deals with overseas science and technology. His job

is dealing in aviation; and, lo and behold, the people that

were hacked worked for aviation companies.

And they weren't Chinese citizens. These were

individuals from other countries for the exchanges. They were

invited there for these exchanges, and then they went and

ripped off their computers while they were in a hotel room,

all right?

And, frankly, it doesn't matter what name they want to

put on it. If it meets the elements of the crime, it's the

crime. They can call it whatever excuse they can, but the

fact is, if you look at that evidence, whether it's the Eighth

Division applying techniques, or them trying to get people

like Sun Li to be a new asset, or it's frankly very clear the

Safran hacking, in all circumstances, if you look at that

evidence and understand, yes, this was a conspiracy with an

attempt to obtain aviation trade secrets, then he is guilty.

Period. End of story.

The one other thing I want to mention, I know there was

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a -- you've heard the instructions this morning. You'll have

a chance to go back and look at them.

There was a lot of talk about what was being targeted. I

want to be clear once again that you heard in the instructions

that this is not -- you know, impossibility is not a defense.

It says in here the government must only prove that the

conspiracy intended to target information that the

conspirators believed to be trade secrets. Whether or not the

targeted information actually was a trade secret is

irrelevant, all right?

So when we go back to the facts and the evidence that was

before you with GE, there's an awful lot in there for you to

look at and to conclude that that, in fact, was his intent.

And what was interesting is Mr. Kohnen talked time and

time again about this person was a star witness, and this

person was a star witness. If there was a star in this case,

and that's not kind of how we phrase things, but in the

evidence, the star is Xu Yanjun. It's his words through

almost every piece of evidence in there. He is the speaker.

He is the one talking to you and telling you what his intent

is. So he is the star. And you need to look at what he said

and how that is a window into his intent.

So much of what you just heard in the response talked

about other people, other people, other people, and they

didn't want to touch on what Xu Yanjun said because it's

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incriminating, because it's -- they're admissions. It shows

his guilt time and time again.

He gives away his intent with his words. You saw it over

and over again in the Gao recording, when he talks about

trying to obtain stuff that's secret at these companies, in

the GE incident, over and over again.

They skipped over most of what happened in 2018 in the

GE. Think about that. Most of what we are trying to present

to you involved what this defendant said and solicited and

demanded of the GE employee through 2018, and they didn't

touch it. They didn't want to talk about it because there's

not much to say.

When he goes to him and says go ahead and collect, I

want domes- -- you know, we want this stuff regarding the

system requirements, then he gives some more detail on it,

then he finally sends the list with the domestic requirements.

And, by the way, that was -- there was a lot of talk

about Mr. Kray saying this stuff gets to GE information. It

was the domestic requirements list that he looked at, where it

goes through in grave detail about the various measurements

and things of that nature, where he says yes, the answers to

this are getting at our trade secrets.

Those were the lists from Xu Yanjun, from his own words

that he gave to the defendant, and he doubled down and he

asked for the directory. When he got the directory, he

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doubled down and asked, "Hey, can you bring it?" Then he said

once again, "Don't just bring it. Can you export it? Can you

download it on to a hard drive?"

He showed you his intent time and time again. And then

he traveled thousands and thousands of miles into Belgium with

all the cash and everything else, and the phones and the

pictures, and the questions and the hard drives because he

wanted to get that computer, and he surely intended to obtain

those trade secrets at that point.

Again, we ask you to use your common sense when looking

at the evidence in this case. Above all, use your common

sense, look at the circumstances and look very carefully at

the defendant's words because, as we said before, what he

hides with his aliases, what he hides with his lies, shows you

his intent, but then also what he says shows you his intent.

You saw it from the Gao recordings through all of the

GE materials and the way he talked privately with his

coconspirators.

If you want one more thing, look at the recording when he

was speaking with his tutor. These are his own words. This

is his recording, his voice that was identified by witnesses,

"The leadership asked you to get the materials of a U.S. F-22

fighter aircraft. You can't get it by sitting at home."

He's telling you what his job is. He's telling you what he

does for a living. And when his friend says, "You also have

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to flip someone. Travel outside China and take the risk."

Couldn't have predicted any better. That's exactly what he

tried to do here with GE.

I know they want to blame the victim, blame GE. GE's

just trying to sell engines without getting ripped off, but he

was the one targeting GE. He's the one targeting this GE

composites engineer. He tried to flip them. He thought he

was going to flip them, and he took the risk, and this is

where the consequences are.

Nothing further, Your Honor.

THE COURT: Very well.

Ladies and gentlemen of the jury, momentarily, it's

time to begin your deliberations. I recognize that it's about

4:15. The first thing I need to do before we send you

upstairs is do something I've never enjoyed doing.

I've been a judge for more than 25 years. I told you up

front that we picked three alternates because this trial was

scheduled to go on for a long period of time, and we were

concerned, as we are in all cases, that we could lose some

jurors over that time period. We have not lost any jurors.

We need to reduce this jury to 12 people, so I need to excuse

the three alternates.

In excusing you, I want you to understand, number one,

you remain on jury duty. Don't go to work. If one of the

12 jurors is unavailable, we're going to pick up the phone and

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call an alternate to scurry down. So make yourself available

by phone that Ms. Webster has, and if we need you, we'll call

you.

But until the verdict is reached by the original 12,

you're not to discuss the case with anyone. That admonition

stands because if you go home and talk about it now, and then

we call you back, you've had a conversation outside the

presence of the Court that you would bring to the jury

deliberations, which would be inappropriate.

So as difficult as it is, continue not to discuss the

case with anyone. No independent research. We'll call you

when a verdict has been reached. At that point, you're free

to discuss the case with anyone. You are also free to choose

not to discuss the case with anyone.

So I'm going to excuse the three alternates now with my

sincere thanks on behalf of the Court and the community for

your continuing service, for your having sat here through and

listening to every word, and now being asked to go home and

not discuss it until the verdict is reached in the event we

need to call you.

The three alternates are Jurors 15, 14, and 13. I'm

going to come down and greet you on behalf of the Court and

community, the work you have done and are continuing to do.

If 15, 14, and 13 would stand and prepare to leave the

room. If you'll lead them around, I want to bump your elbow.

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This is on behalf of the Court and community. Do you bump?

Thank you.

Thank you.

Thank you.

You're free to go.

To the 12 of you in the jury box, you are the jury. You

are to decide this case. You are to follow the instructions.

Momentarily, I'm going to send you up to the jury room.

As I indicated in the instructions, the first thing you should

do is pick a foreperson. That person has no extra power and

no better vote.

That person is merely designed to make sure that all 12

of you get to express your opinions whenever you want and to

speak for you to the Court if you need to speak to the Court.

After you pick a foreperson, you can decide among

yourselves how long you want to stay today, or whether you

want to adjourn at the normal time or shortly thereafter, go

home, get refreshed, and come back tomorrow at 9:15 for us to

get you back on the job at 9:30.

You're welcome to take as much time or as many days as

you choose.

When you come back tomorrow, if that's how it works out,

you're to go to the jury room at 9:15 but not discuss the

case. At 9:30, I will call for you to come back to the

courtroom. I'll count noses. I'll send you right back

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upstairs and you begin your deliberations.

I just don't want deliberations to start before all

12 have gathered and before you have seen me.

We'll send upstairs today your jury instruction packets

and one verdict form. The verdict form has my initials on it

so I know it's the one, your jury instructions. Some of you

took notes. You'll have to figure out among yourselves which

packet is yours and which is not. We will also send up the

exhibits.

Today after you've gone upstairs and you've selected a

foreperson and you've decided how much you want to stay today,

buzz for us. I'll send someone up. I'll get your directions

whether you want to leave at the time of the buzzer, or

whether you want to stay later tonight, or whether you want to

come back tomorrow and start fresh in the jury room by 9:15.

No discussions. Back to the courtroom at 9:30. Then right

back upstairs and you continue your deliberations.

So here you are. You're about to exercise the sacrifice

required by democracy. We don't live in a country where a

king decides guilt or innocence. We live in a country where

12 ordinary citizens come down, listen to the evidence, and

collectively reach a decision.

It's on your shoulders. It's an enormous responsibility,

but it's a sacrifice required by democracy. And I've watched

you, and I have enormous faith in your abilities.

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Out of respect for you, we'll rise as you go to the jury

room. Pick a foreperson, buzz us when you know what you want

to do for the balance of the day.

If you'd rise as the jury leaves.

(Jury out at 4:22 p.m.)

THE COURT: The jury has left the courtroom. The

door is closing.

You've heard my instructions to the jury. I anticipate

hearing from them soon, and we will advise you and them as to

where we are.

Court's in recess until we hear from the jury.

(Brief recess.)

THE COURT: Thank you. Please be seated.

Back in the courtroom on the record. The jury is

upstairs. It's a few minutes after 4:30.

The defense team is here with the defendant and

interpreters.

The government team is here.

I'm advised that the jury has selected a foreperson and

wishes to go home for the day, go home and start fresh.

I intend to call them down here, admonish them, as is

traditionally done, and release them for the day.

Is there anything for me before we call the jurors down

from the government?

MR. MANGAN: No, Your Honor.

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THE COURT: From the defense?

MR. KOHNEN: No, Your Honor, except to ask who -- do

you expect any of us here tomorrow morning at 9:30?

THE COURT: Yes. I'm going to bring the jury to the

room every morning at 9:30. I think it would be helpful if

you were -- if somebody on behalf of both sides were present.

Do you wish to have your client present?

MR. KOHNEN: May I consult with him for a moment?

THE COURT: Yes.

(Mr. Kohnen confers with the defendant.)

MR. KOHNEN: Your Honor, I think they're probably

going to bring him down here daily anyway, so the answer is

yes.

THE COURT: Very well. So the marshall is advised

that we'll need the defendant tomorrow in the courtroom at

9:15, ready for the jury at 9:30, which will get sent back to

the jury room at about 9:32.

Is there anything further from the defense before we get

the jury?

MR. KOHNEN: No. Thank you, Judge.

THE COURT: The government?

MR. MANGAN: No, Your Honor.

THE COURT: Please call for the jury.

(Jury in at 4:38 p.m.)

THE COURT: You may all be seated. Thank you.

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All 12 jurors have returned to the courtroom. I'm

advised that you have selected a foreperson and that you wish

to leave for the day -- it's after 4:30 -- come back tomorrow

morning to pick up with deliberations. And that makes eminent

good sense.

I brought you down here one more time to give you the

standard admonitions. This is really important. Do not

discuss the case during the break with anyone, including among

a couple of yourselves.

We're done talking about the case, you are, until we

bring you back to the courthouse. You'll go to the jury room

by 9:15. I'll call for you at 9:30. I'll count 12 and send

you back up to begin your deliberations.

Don't talk about the case until I've seen you and sent

you back upstairs.

On behalf of the Court and the community one more time,

thank you for your hard work and your service.

Do not discuss the case with anyone, including among

yourselves. Do not discuss the case tomorrow until you've

come to the courtroom and I've sent you upstairs. No

independent research.

Thank you. You're free to go for the day. We'll rise

for you as you leave for the day.

(Jury out at 4:40 p.m.)

THE COURT: The jury has left for the day. The door

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has closed.

Are we ready to adjourn for the day, or is there anything

else you want to address at this time from the government?

MR. MANGAN: No, Your Honor.

THE COURT: You'll be here tomorrow morning?

MR. MANGAN: Yes. We will be here.

THE COURT: Defense, anything further for today?

MR. KOHNEN: Ditto, Judge Black. Thank you.

THE COURT: All right. We'll see you tomorrow.

We're in recess.

(Proceedings adjourned at 4:40 p.m.)

* * *

C E R T I F I C A T E

- - -

I, M. SUE LOPREATO, RMR, CRR, certify that the foregoing

is a correct transcript from the record of proceedings in the

above-entitled matter.

/s/ M. Sue Lopreato______ February 1, 2022__

M. SUE LOPREATO, RMR, CRR

Official Court Reporter

- - -

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