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CI TRENDS CI Trends: Espionage Related 1 Activity in Southern California Espionage Related Activity in Southern California, Part 2 COUNTERINTELLIGENCE AND CYBER NEWS AND VIEWS Corporate Headquarters 222 North Sepulveda Boulevard, Suite 1780 El Segundo, California 90245 (310) 536-9876 www.advantagesci.com COUNTERINTELLIGENCE AND CYBER NEWS AND VIEWS MARCH 2012 VOLUME 1 ISSUE 3 Inside this Issue CI TRENDS CI Trends: Espionage Related 1 Activity in Southern California Espionage Related Activity in Southern California, Part 2 Suspect Counterfeit Electronic 2 In last month’s newsletter, we had only illustrative of one of the oldest techniques Parts Can Be Found on scraped the surface of espionage and used in espionage. The fine art of Front Companies: Who Is the 7 End User? national security related crimes occurring seduction has been used throughout DARPA’s Shredder Challenge 9 within the Los Angeles area. As one of the history to obtain classified information purposes of this newsletter includes serving from males and females. In the cases of Threats To Nanotechnology 10 as an educational tool, the use of actual Data Exfiltration and Output 11 Richard Miller and J.J. Smith, both were Devices - An Overlooked cases to illustrate how espionage has seduced, and then they betrayed the How spies used Facebook to 14 occurred in the past serves to meet this confidences placed in them by the U.S. steal Nato chiefs’ details purpose. Government. Extracts from Wikipedia pertaining to Miller and Smith (not a Retired agent suspected of 16 Everyone likes to hear “spy stories”, except Espionage spying for China: definitive source, but very illustrative for when they hit closest to home. Then the these two cases) follow: ARRESTS, TRIALS, 17 stories are not so fun to hear. It’s easy here CONVICTIONS to write about the Chi Mak’s and Greg EXTRACT BEGINS: On October 3, 1984, Miller was arrested with Svetlana and Nikolai Former DuPont Scientist 17 Chung’s of the world. The cleared defense Pleads Guilty To Economic Ogorodnikov, Russian immigrants who had contractor community has been victimized moved to Los Angeles in 1973 to seek refuge, Noted Scientist Sentenced to 18 again and again by “trusted insiders” who but who were actually access agents of the 13-Year Prison Term for Attempted have stolen classified and proprietary Soviet KGB. Miller was alleged to have Espionage, Fraud and Tax provided classified documents, including an information and passed it on to their FBI Counterintelligence manual, to the New York Resident and His 20 Company Sentenced for “handlers”. Lest anyone have any doubt, or Conspiracy to Export short memories, these “spy stories” have Computer-Related Equipment hit close to home for members of the FBI, Australian Man and His Firm 21 especially in the Los Angeles area. Indicted in Plot to Export Restricted Military and Other Twice, Special Agents assigned to the Los U.S. Technology to Iran Angeles office of the FBI were charged with Ex-Marine Accused of 23 activity bordering on espionage or Attempting to Export Sensitive Military Items mishandling of classified documents. These cases, both relating to sexual relationships CYBER THREATS 25 between foreign born female sources and Richard Miller’s home in Lynwood PRODUCTS, SERVICES AND 30 their male FBI Special Agent “handlers”, are continued on page 3 TRAINING NOTE: Much of the Information contained within this newsletter originates from websites maintained by agencies of the U.S. Federal Government. The original web address from which material has been derived is posted at the beginning of reproduced articles. Readers are always encouraged to visit the web address from where the article has been derived from, in order to view the article in the original form in which it was presented. This newsletter also contains commentary from the editor of the newsletter. Such commentary is solely the opinion of the newsletter editor and does not represent the views of the U.S. Government, nor the agency originally presenting this information on the internet. Questions or comments may be directed to the editor at [email protected] or to Richard Haidle at 310-536-9876 x237 1 COUNTERINTELLIGENCE AND CYBER NEWS AND VIEWS Suspect Counterfeit Electronic Parts Can Be Found on Internet Purchasing Platforms GAO-12-375, Feb 21, 2012 http://www.gao.gov/products/GAO-12-375 What GAO Found Suspect counterfeit and bogus—part numbers that are not associated with any authentic parts—military-grade electronic parts can be found on Internet purchasing platforms, as none of the 16 parts vendors provided to GAO were legitimate. “Suspect counterfeit,” which applies to the first two categories of parts that were tested, is the strongest term used by an independent testing lab, signifying a potential violation of intellectual property rights, copyrights, or trademark laws, or misrepresentation to defraud or deceive. After submitting requests for quotes on both platforms, GAO received responses from 396 vendors, of which 334 were located in China; 25 in the United States; and 37 in other countries, including the United Kingdom and Japan. Of the 16 parts purchased, vendors usually responded within a day. GAO selected the first of any vendor among those offering the lowest prices that provided enough information to purchase a given part, generally within 2 weeks. Under GAO’s selection methodology, all 16 parts were provided by vendors in China. Specifically, all 12 of the parts received after GAO requested rare part numbers or postproduction date codes were suspect counterfeit, according to the testing lab. Multiple authentication tests, ranging from inspection with electron microscopes to X-ray analysis, revealed that the parts had been re-marked to display the part numbers and manufacturer logos of authentic parts. Other features were found to be deficient from military standards, such as the metallic composition of certain pieces. For the parts requested using postproduction date codes, the vendors also altered date markings to represent the parts as newer than when they were last manufactured, as verified by the parts’ makers. Finally, after submitting requests for bogus parts using invalid part numbers, GAO purchased four parts from four vendors, which shows their willingness to supply parts that do not technically exist. Why GAO Did This Study Counterfeit parts—generally the misrepresentation of parts’ identity or pedigree—can seriously disrupt the Department of Defense (DOD) supply chain, harm weapon systems integrity, and endanger troops’ lives. In a November testimony (GAO-12-213T), GAO summarized preliminary observations from its investigation into the purchase and authenticity testing of selected, military-grade electronic parts that may enter the DOD supply chain. As requested, this report presents GAO’s final findings on this issue. The results are based on a nongeneralizable sample and cannot be used to make inferences about the extent to which parts are being counterfeited. GAO created a fictitious company and gained membership to two Internet platforms providing access to vendors selling military- grade electronic parts. GAO requested quotes from numerous vendors to purchase a total of 16 parts from three categories: (1) authentic part numbers for obsolete and rare parts; (2) authentic part numbers with postproduction date codes (date code after the last date the part was manufactured); and (3) bogus, or fictitious, part numbers that are not associated with any authentic parts. To determine whether the parts received were counterfeit, GAO contracted with a qualified, independent testing lab for full component authentication analysis of the first two categories of parts, but not the third (bogus) category. Part numbers have been altered for reporting purposes. GAO is not making recommendations in this report. For more information, contact Richard J. Hillman at (202) 512-6722 or [email protected] or Timothy Persons at (202) 512-6522 or [email protected]. To view the 23 page report in its entirety please go to the following web link: http://www.gao.gov/assets/590/588736.pdf 2 COUNTERINTELLIGENCE AND CYBER NEWS AND VIEWS Espionage Related Activity in Southern California, Part 2 continued from page 1 Ogorodnikovs after demanding $50,000 in gold and classified materials to their trysts. In July 2003, he $15,000 cash in return. Miller, who had eight children was sentenced to three months home confinement and was faced with financial difficulties, was having an after he pled guilty to lying to the FBI about his affair with the married Svetlana Ogorodnikov, and was affair. He also was ordered to perform 100 hours of preparing to travel with her to Vienna at the time of community service. Smith pleaded guilty to a his arrest. It was later alleged that Svetlana Ogorodni- charge of falsely concealing his affair with a Chinese kov had been in touch with a KGB case officer working spy, Katrina Leung, from the FBI. The plea allowed out of the Soviet Consulate in San Francisco and had Smith to avoid prison time. Prosecutors also agreed made arrangements for Miller to meet with the KGB in to drop three other charges, including two counts of Vienna. gross negligence in his handling of national security documents. END OF EXTRACT After a 10-week trial, and in an agreement with Feder- al prosecutors, both Ogorodnikovs pleaded guilty to The point to make here is that motivational tools one count of conspiracy. Nikolai Ogorodnikov was im- for “trusted insiders” range from ideology (Chi Mak, mediately sentenced to eight years imprisonment. His Greg Chung) to sexual (Miller, Smith). Another mo- wife later received a sentence of 18 years, but main- tivator is financial, whether through greed or finan- tained her innocence and stated that Miller had never cial need. We illustrated that point last month with provided her with any classified information. the Thomas Cavanagh case. Richard Miller pleaded innocent, and after 11 weeks of Another motivator is political motivation tied with a testimony, a mistrial was declared.
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