Economic espionage is a problem that costs the American economy billions of dollars annually and puts our national security at risk.
To raise awareness of the issue, the FBI and the National Counterintelligence and Security Center have launched a nationwide campaign and released a short film aimed at educating anyone with a trade secret about the threat and how they can help mitigate it. Based on an actual case, The Company Man: Protecting America’s Secrets illustrates how one U.S. company was targeted by foreign actors and how that company worked with the FBI to resolve the problem and bring the perpetrators to justice.
The targeted company’s corporate attorney and the FBI’s lead investigator in the real-life version of The Company Man share their perspectives on the case.
Corporate executives discuss the importance of protecting trade secrets and how their collaboration with the FBI has helped them in that endeavor.
– Checklist for Reporting an Economic Espionage or Theft of Trade Secrets Offense
– Economic Espionage Brochure
– Intellectual Property Brochure
– Visitors: Risks & Mitigations Brochure
– Elicitation Brochure
Our FBI podcasts explore the topic of economic espionage.
– National press release: FBI Announces Economic Espionage Awareness Campaign
– Testimony: Combating Economic Espionage and Trade Secret Theft
– Video: Randy Coleman, FBI Counterintelligence Division
– Video: The Company Man: Protecting America’s Secrets
– Counterintelligence brochures
– Administration Strategy on Mitigating the Theft of U.S. Trade Secrets
– The Case for Enhanced Protection of Trade Secrets in the Trans-Pacific Partnership Agreement
– IP Commission report on the theft of American intellectual property
– Related FBI Economic Espionage Campaign: The Insider Threat
Did the high-rise fire in Shanghai actually happen?
Yes. The fire occurred on November 15, 2010 and resulted in the death of 58 people and the injury of 70 more individuals. The cause of the blaze was directly linked to faulty building materials, specifically the insulation used in the construction. The civil unrest caused by the poor building codes resulted in the People’s Republic of China (PRC) government enacting very stringent building codes.
Why was this particular company aggressively targeted?
After the new building codes were enacted, only a few companies made materials that met the code. The PRC government then provided tens of millions of investment dollars to anyone who could produce the needed insulating materials indigenously. As a result, the two subjects took government funds, which permitted them to purchase land, build a factory, and acquire the technology by any means necessary.
What social networking sites did the subjects use to target the company employees and how did they use the information they learned?
The subjects used LinkedIn and Facebook to spot and assess employees working at the target company. They then used a “headhunter” as a proxy to see which employees might be interested in leaving their positions.
After being turned down for the proposed joint venture, how soon did they attempt to trespass at the plant?
The two subjects waited four days, then departed the corporate headquarters area and flew to a rural town across the country where the manufacturing plant was located. Upon arrival, they checked into a local hotel. In the evening, they attempted to access the plant without authorization for the first time.
Did the subjects actually walk into the plant despite being denied a tour?
Yes. The company denied the subjects’ initial request to visit the manufacturing plant. Undeterred, the subjects traveled over 500 miles directly to the rural plant. The subjects entered the plant in the evening and took their own self-guided tour, taking photographs until challenged. Their initial pretext was they were looking for a gas station. They returned the next day and were found in the employee parking lot watching employees enter and exit the plant. When confronted, the subjects advised they were looking for a fishing lake nearby. Since the plant was located in a small rural town, the factory doors were left unattended.
Did the PRC government play a role in the two subjects’ attempts to steal the glass insulation trade secret?
Not directly, but the PRC leverages its large cash reserves to award substantial loans and grants to anyone who might be able to indigenously produce a certain product or technology for the country in the shortest time possible. How the private businessmen deliver on their promises is not the government’s concern.
Were there new job postings for the same job even after the two subjects were arrested and convicted?
Yes. Just weeks after the two subjects were convicted, new job postings for the same exact insulation technology were posted on Craigslist and other job sites. There are plenty of others eager to utilize government funds to acquire the technologies the PRC needs. This emphasizes the persistent and inexhaustible nature of the threat.
Did the conviction of the subjects have a negative impact on the reputation or stock prices of the company?
No. In fact, this type of aggressive action by the company to protect its trade secrets and employees from this threat has only strengthened the confidence in the company’s ability to maintain long-term profitability in a global market. The company was frustrated by the aggressive nature of the attempts and expressed pride in taking necessary action to protect their valuable information.
Were the glass insulation trade secrets disclosed or compromised during the prosecution?
No. The Department of Justice has a variety of protections in place to ensure sensitive corporate intellectual property is protected throughout any criminal prosecution. The company’s trade secret documents were never at risk during the FBI “sting” operation. The documents used in the operation were not true documents pertaining to the victim company, but rather counterfeit replications.
What techniques were used in the film to illicitly acquire the company’s trade secrets?
- Used social media to spot and assess potential recruits
- Attempted a joint venture
- Hired a headhunter to identify potential insiders
- Attempted cyber intrusion (via unprotected USB ports)
- Trespassed at the factory
- Bribery of employees
- Online job ads posted on popular job websites
What actions could RIS have taken to strengthen their security program?
- Issued visitor badges, maintained visitor logs, and required escorted access at all times
- Not left computers unlocked while unattended
- Disabled USB drives and other removable media devices
- Kept gates locked and/or not left them unmonitored (including dumpsters)
- Created an easier and more anonymous reporting channel for employees
- Continually educated employees about the threats to the company’s trade secrets
- Restricted physical/electronic access to trade secrets and other proprietary information
What indicators might RIS have seen to proactively detect a potential insider like Robert Moore?
- Excessive printing
- Use of encryption software
- Spike in e-mail and USB storage/transfer volumes
- Increase in foreign IP traffic
- Unusual network and building access times
- Unexplained wealth or affluence
- Unusual foreign travel (or unreported foreign travel for those required to report it)
- Disillusionment/entitlement due to missed promotions or other perceived grievances
- Increased amount of non-business-related activities (i.e., web surfing, job hunting, social media etc.)
What was the value of the trade secret portrayed in the video and how was it calculated?
The estimated economic value of the glass insulation trade secret was worth nearly $300 million. It was calculated based on the potential sales to the Asian market that would have been lost if an Asian competitor was able to produce the same product locally.
Why is cultivating a strong relationship with the counterintelligence strategic partnership coordinator (SPC) in your area so vital?
Each of the 56 FBI field offices has an SPC who proactively develops relationships with the private sector, academia, and cleared contractors, so if a security incident occurs, the liaison relationship with the FBI has already been established. The SPC provides counterintelligence threat briefings and intelligence products on current trends and indicators to help companies detect, deter, and defend against attacks to sensitive proprietary information from foreign adversaries.
To report suspicious activity, contact your local FBI office or go to https://tips.fbi.gov