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U.S. Drops Case Against Chinese Scientist At University of Virginia

Hu Haizhou, who was studying underwater robotics, had permission to access code he allegedly stole. U.S. Drops Case Against Chinese Scientist At University of Virginia

Prosecutors abruptly moved to drop criminal charges against a visiting Chinese scientist at the University of Virginia who had been arrested last month on allegations of stealing trade secrets from his professor, after the university acknowledged the scientist was authorized to access some of the material.

In a motion filed Sunday, the U.S. Attorney’s office in Charlottesville, Va., asked the court to dismiss its case against Hu Haizhou, who works for a military-funded lab at Beihang University in Beijing and was researching underwater robotics, according to a previously filed FBI affidavit.

He had been charged with stealing proprietary software code under development for two decades by his University of Virginia adviser, who runs a collaborative program with other schools funded by the Office of Naval Research.

At a hearing on Friday, a federal prosecutor in Chicago, where Mr. Hu had been arrested, said that further investigation of the University of Virginia’s computer systems showed that “some portion” of the relevant proprietary information allegedly found on Mr. Hu’s computer was actually “in a shared space that Mr. Hu had authorized access” to, according to a transcript of the hearing.

The prosecutor told the court that, as a result, the government would seek to dismiss all charges against Mr. Hu, the transcript said. The development is a black eye for the Justice Department in its recent series of cases against Chinese military-linked researchers studying in the U.S.

The court granted the dismissal request on Monday. A spokesman for the U.S. Attorney’s office declined to comment.

A representative for the University of Virginia said in a statement to The Wall Street Journal Tuesday that the school continued to investigate “the circumstances surrounding the former research scholar’s unauthorized possession of University files while attempting to leave the country,” adding that Mr. Hu “did not have permission to access or take the files and was repeatedly denied permission to access them.”

The spokesman said the university had determined that one of the computing systems that Mr. Hu had access to included “permission settings that were not sufficient to establish a violation of law,” and said the university is reviewing its data access and permission standards as a result.

Mr. Hu’s adviser at UVA, Haibo Dong, reiterated to the Journal what he had told the FBI: that he believed Mr. Hu had improperly taken his code. “It’s not ethical and not appropriate but whether it reaches a criminal level, I’m not sure,” he said, referring questions about the case to university officials.

Mr. Hu’s lawyer in Chicago, James D. Tunick, said, “Every file that was on Haizhou’s computer he was authorized to possess, as he used his login credentials provided by the University of Virginia.”

He said his client “was not aware of the content/substance of many of the files, since they were part of a larger folder that he was required to access and copy to perform certain research.” He said his client “absolutely feels betrayed by Professor Dong.”

To prove Mr. Hu stole trade secrets, prosecutors would need to prove both that the defendant wasn’t entitled to the information, and that the owner of the information had kept it guarded securely to ensure no unauthorized disclosure of it.

“It’s not enough for the information to just be considered secret, you have to take affirmative steps to keep it secret,” said Christopher Ott, a former national security prosecutor who is now a lawyer at the law firm Rothwell Figg.

Federal Bureau of Investigation agents questioned dozens of researchers over the summer about their work and military affiliations, leading to the arrests of at least six scientists accused of hiding their ties to the Chinese military when applying for U.S. visas or of engaging in other alleged misconduct.

Most of the cases were filed after airport confrontations as the researchers were departing the U.S. and pulled aside for questioning by border protection officers, leaving prosecutors rushing to file complaints based in part on the answers the researchers provided just as they were scheduled to get on a plane.

Mr. Hu had been interviewed by Customs and Border Protection officers in Chicago as he was attempting to leave the country on Aug. 25, and admitted he had code on his laptop that his adviser would be upset to learn he had, according to the FBI affidavit for his arrest filed three days later.

Mr. Dong told authorities Mr. Hu “had left UVA to return to China without contacting him to bid him farewell, which he found unusual,” the affidavit said.

Mr. Hu’s lawyer told the Journal that Mr. Dong did know Mr. Hu was leaving for China, as his research assistant position had concluded and his visa was set to expire. He added that Mr. Hu says he emailed Mr. Dong and talked with him on the phone a couple of days before his planned departure.

Mr. Dong had also told investigators that he had repeatedly denied Mr. Hu’s requests to access his code and didn’t know how he obtained it, according to the affidavit.

Mr. Tunick said his client didn’t make those requests and that he had “acted like any other research assistant who wanted to assist with the project he had been assigned.”

An FBI agent involved in the investigation acknowledged under cross-examination by Mr. Tunick that investigators didn’t know how the code in question allegedly ended up on Mr. Hu’s computer, and didn’t have evidence that Mr. Hu had stolen any credentials or used other improper means to access the information.

“There’s no evidence that the University of Virginia computers were hacked into on a particular date and time, correct?” Mr. Tunick asked, to which the agent responded: “Correct.”

Then, in the middle of that cross-examination, Assistant U.S. Attorney Shoba Pillay asked for a recess, and returned to say that her colleagues in Virginia were withdrawing the case, after investigators had examined a university computer that had crashed.

“In the course of their continuing investigation and working with the university, one of the critical computers on which this information was stored had crashed,” Ms. Pillay said. Once the computer started working again, she said, they saw that Mr. Hu had permission to access some of the files he was accused of stealing.

Mr. Hu is now back in China, his lawyer said.

 

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