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Today's Cold War Evolves: Chinese Trade Secrets Theft, Russian Online Fraud Attacks

Internet, Email Spur Sophisticated Incidents, Some Supported by Other Countries

January 19, 2012

Feels like it is the Cold War again, but this time through more sophisticated attacks, some allegedly coordinated by a foreign country, while others launched from far off areas. The commonalties often are the Internet and connections in some way to China and Russia. Your comments on this new age Cold War effort are sought. Also, go on the Security Magazine Twitter site to share your thoughts.

For instance, a former research chemist with global pharmaceutical company sanofi aventis headquartered in Bridgewater, New Jersey, just pleaded guilty January 17 to stealing trade secrets and making them available for sale through a U.S. subsidiary of a Chinese chemical company, authorities said. The 29 year old Chinese national is a resident of Franklin, New Jersey, who worked for sanofi aventis.

The convict worked as a research scientist at the firm from August 2006 to June 2011, where she directly assisted in the development of many compounds sanofi aventis viewed as building blocks for future drugs. The compounds were trade secrets and had not been disclosed outside in any manner, including by means of a patent application. While employed at the firm, the convict was a 50 percent partner in Abby Pharmatech Inc., a subsidiary of Chinese chemical products company Xiamon KAK Science and Technology Co. Ltd. Abby also is engaged in the sale and distribution of pharmaceuticals. The convict admitted that between October 2008 and June 2011, she accessed an internal sanofi aventis database and downloaded data and chemical structures related to many compounds onto her company issued laptop. She said she then transferred the data to her home computer via email or a USB thumb drive. The convict further admitted she made the stolen compounds available for sale on the Abby Catalog on Abby Pharmatech Web sites, as well as through a well-known online database.

From Russia, a father and son from Moscow have been charged by federal prosecutors in New York with taking part in a scheme to gain illegal computer access to U.S. bank accounts through bogus e-commerce Web sites. The pair was named in an indictment unsealed January 17 in federal court that alleges they and others controlled U.S. registered companies and operated a business that bought and sold securities.

The defendants took unauthorized charges on customers’ credit cards by buying the numbers illegally or by malware they surreptitiously installed on victims’ computers. The father, arrested last March, arrived in New York January 16 following his extradition by Swiss authorities, the Manhattan U.S. attorney’s office said. His son remains at large. The pair held out U.S. registered firms Sofeco LLC, Pintado LLC, and Tallit LLC as legitimate Internet merchants with Web sites that appeared to offer goods and services. They also engaged in a scheme from June 2004 to February 2005 to gain access to accounts of U.S. victims, and attempted to transfer hundreds of thousands of dollars into bank accounts they controlled at JPMorgan Chase and a company identified as Asia Europe America Bank, prosecutors said. The defendants, through Rim Investment Management Ltd., maintained an account at Ameritrade Inc. and bought and sold securities in publicly traded companies.

The two men are accused of committing securities fraud by buying and selling thousands of shares of companies by trading in the accounts of U.S. victims, prosecutors said. The indictment describes July 2004 meetings between the pair and unidentified others in Cyprus. Unnamed coconspirators transferred almost $300,000 from the financial services account of a person in the U.S. to a bank account controlled by the pair.

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