recent news articles about H-1B
recent news articles about H-1B
Date: Wednesday, December 20, 2006 2:13 AM
<<<<< JOB DESTRUCTION NEWSLETTER No. 1611 -- 12/20/2006 >>>>>
Phyllis Schlafly's article is excellent but has one minor shortcoming -- it
presents the H-1B debate only in terms of the harms it is doing to
engineers and programmers. While techies and scientists make up at least
55% of the available H-1B visas, let's don't forget that there are many
other professions affected by the H-1B program such as teachers,
accountants, nurses, doctors, and yes, even lawyers. Norm Matloff got it
right in his article that was published by the SF Chronicle.
The program's scope is far more general than just the tech industry.
For example, the San Francisco Unified School District has hired a
number of H-1B visa-holding school psychologists, elementary school
teachers and so on. But the most common field in which employers
hire H-1B visa holders is software development. The visas granted in
computer-related fields are 10 times more numerous than in the next
most common tech field, electrical engineering.
The following statement by Azim Premji, chairman of Wipro, is downright
supremacist. Despite racist statements like this he is adored in the
mainstream media simply because he is an Indian billionaire.
It's a method of competitiveness. Currently, I think it's a
non-issue because the talent is not available in the U.S.
So what jobs are we depriving people of?
Articles included
Article 1:
http://www.humanevents.com/article.php?id=18532
Tech Industry Has Ulterior Motive Regarding H-1B Visas
Article 2:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/12/07/EDGOULJ5BC1.DTL
Should the U.S. increase its H-1B visa program?
CON: Wages belie claims of a labor shortage
Article 3:
http://www.americandaily.com/article/16838
Illegal Immigration: India Invades America
Article 4:
http://www.indiaenews.com/business/20061205/31354.htm
Indians may get social security money on return from US
Article 5:
http://www.indiaenews.com/nri/20061215/32673.htm
Over 43,000 Indians got H-1B visa in US fiscal 2006
Article 6:
http://www.ecommercetimes.com/story/54624.html
Wipro Chairman: Outsourcing Due to US Skilled Worker Shortage
Article 7:
http://www.presstelegram.com/news/ci_4849017
Engineers stole trade secrets
1. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.humanevents.com/article.php?id=18532
Tech Industry Has Ulterior Motive Regarding H-1B Visas
by Phyllis Schlafly
Posted Dec 18, 2006
The technology industry has dispatched its fat-wallet lobbyists to demand
that the new Congress vastly increase the number of foreign computer
software techies and engineers who can be imported on H-1B visas. This
demand is based on the claim that we suffer a labor shortage in those
fields, but that's a bare-faced lie to erect a smoke screen around the real
reasons.
Three reasons motivate the tech giants to use their political clout and
political action committee contributions to increase H-1Bs:
1. Cost-cutting: H-1B visa holders are paid much less than Americans.
2. The influx of H-1B visa holders depresses the "prevailing wage" for all
computer techies and engineers.
3. The hiring of H-1B visa holders prevents potential competition from
Americans who might choose to work for other firms or start companies of
their own.
H-1B visas are not for entrepreneurs or executives. They are for employees
who are tied to the company that imports them, much like indentured
servants, and are supposed to depart from the United States after a few
years.
A technology industry coalition called Compete America gathered at Stanford
University in November for a TechNet Innovation Summit, but the goal wasn't
innovation. This coalition, backed by Microsoft, Intel and other computer
giants, has sent a letter to every member of Congress calling for more H-1B
visas so businesses can import Indian, Pakistani and Chinese engineers to
fill U.S. jobs.
H-1B visa holders cut industry costs but do nothing to improve innovation.
Most innovators are Americans, and the successful immigrant entrepreneurs
the industry brags about did not come here as guest workers on H-1B visas,
but entered as children and were educated in U.S. universities.
Current law allows industry to import 85,000 workers with H-1B visas a
year, but industry lobbyists seek to double or triple that number. They
would really like the Cornyn-Shadegg SKIL Bill -- known to engineers as the
Kill Bill -- which could import 1.5 million underpaid workers with H-1B
visas by 2013.
The computer giants have thrown down the gauntlet: If Congress doesn't
provide more H-1Bs visas, they will outsource jobs. "Outsourcing is the
perfect argument for increasing the numbers" of H-1Bs, said a Compete
America representative.
But if it's really better to outsource, there is no need for H-1Bs. Nobel
economist Milton Friedman labeled H-1B visas a government "subsidy" to
enable employers to get workers at a lower wage.
The United States has more than enough engineers. After the dot-com bust in
2000, California's Silicon Valley lost about 100,000 engineering jobs. Many
of those who lost jobs remain unemployed, underemployed or have taken jobs
in other industries.
Research by professor Norman Matloff of the University of California Davis
confirms that there is no shortage of U.S. engineers or computer techies.
If there were a shortage, salaries would be going up, but starting salaries
for bachelor's degree graduates in computer science and electrical
engineering, adjusted for inflation, are flat or falling.
A study by the Pratt School of Engineering at Duke University also found
that there is no shortage of U.S. engineers. Eighty percent of respondents
to a Pratt survey say U.S. engineering jobs are filled within four months,
and 88 percent didn't offer signing bonuses.
Many companies hire student engineers from India and China with only two or
three years of college and then train them in their own facilities. U.S.
students with two or three years of college get no job offers.
Much of the Compete America discussion involved blaming the U.S.
educational system and the fact that fewer U.S. students are going into
math and computer sciences. Yes, U.S. students have figured out that our
engineers have a bleak employment future because of insourcing foreigners
and outsourcing manufacturing.
The Compete America globalists are not interested in preserving America as
the greatest nation and economy in the world, or in protecting American
industry or jobs or universities or national security. They rejoice in
economic redistribution from rich and prosperous nations to other countries
around the world.
Microsoft founder Bill Gates spoke for the globalists: "The United States
has been spoiled by being a global leader for so long that there may be an
adjustment. We've got to get used to the fact that our relative share of
everything -- our ability to exercise unilateral decision-making, military
power and economic power -- won't be as out of line with our 5 percent
share of world population as it is today."
Anyone who rejoices that the United States is losing its pre-eminence and
distributing our wealth around the rest of the world must have lost all
appreciation for the Yankee ingenuity essential to our prosperity. H-1B
visas are a form of servitude that offends the free enterprise that made
the United States the economic world leader.
2. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/12/07/EDGOULJ5BC1.DTL
Should the U.S. increase its H-1B visa program?
CON: Wages belie claims of a labor shortage
- Norman Matloff
Thursday, December 7, 2006
Once again, the tech industry is putting heavy pressure on Congress to
expand the H-1B visa program. Though the industry says the foreign workers
are needed to remedy a tech labor shortage, for most employers the
attraction of H-1Bs visa holders is simply cheap labor. The H-1B visa
program allows skilled immigrants to work in the United States on a
temporary basis.
The program's scope is far more general than just the tech industry. For
example, the San Francisco Unified School District has hired a number of
H-1B visa-holding school psychologists, elementary school teachers and so
on. But the most common field in which employers hire H-1B visa holders is
software development. The visas granted in computer-related fields are 10
times more numerous than in the next most common tech field, electrical
engineering.
The industry claims that it needs to import workers to remedy a severe
labor shortage. Yet this flies in the face of the economic data.
A Business Week article has pointed out that starting salaries for new
bachelor's degree graduates in computer science and electrical engineering,
adjusted for inflation, have been flat or falling in recent years. This
belies the industry's claim of a labor shortage. Additional analysis at the
master's degree level shows the same trend, flat wages -- contradicting the
industry's claim that workers at the postgraduate level are in especially
short supply.
Microsoft founder Bill Gates is personally leading the industry's charge
for more H-1B visas. Yet Microsoft asked its contract software developers
earlier this year to take a seven-day furlough, to save money. And the firm
admits that its salaries are not keeping up with inflation. Again, none of
this squares with Microsoft's claims of a labor shortage.
The hidden agenda here is industry access to cheap labor. Several
university studies and two congressionally commissioned reports have shown
that H-1B visa holders are paid less than Americans. Though the law
requires H-1B holders to be paid the "prevailing wage," the definition of
that term is filled with numerous gaping loopholes, as a 2002 congressional
report showed. Yet Congress added even further loopholes in legislation in
2004. Just think tax code, and you'll understand what I mean.
The H-1B program does not require most employers to give hiring priority to
qualified U.S. citizens and permanent residents. If the employer is also
sponsoring the foreign worker for a green card, there is such a
requirement, but again loopholes render the rule meaningless. As prominent
immigration attorney Joel Stewart has said, "Employers who favor aliens
have an arsenal of legal means to reject all U.S. workers who apply."
The industry says the H-1B holders are needed to maintain its level of
innovation. I, too, support facilitating the immigration of "the best and
the brightest," but very few H-1B holders in the tech field are in that
league. Government data show that the vast majority make, at most, in the
$60,000 range (Intel's median is $65,000). Yet even non-techies know that
the top talents in this field make more than $100,000. And the vast
majority of awards for innovation in the field have gone to U.S.-born
workers.
The industry lobbyists highlight some of the famous immigrant entrepreneurs
in the industry, such as Jerry Yang and Sergey Brin, co-founders of Yahoo
and Google. Yet neither of them immigrated to the United States as an H-1B
visa holder; both came to the United States as minors with their parents.
Thus they are irrelevant to the H-1B issue. The lobbyists also like to cite
Andy Grove, an early Intel employee, yet he came to the United States as a
refugee, not under employer sponsorship.
More important, none of these firms has been pivotal to the industry
technologically. There are lots of good Web search programs. In fact, Yahoo
bought the one it uses, rather than developing its own. Rest assured, we
would all still be surfing the Web without Yahoo and Google. And we would
have the hardware to do it too, without Intel; IBM could have chosen from
many good chip vendors when it introduced the PC in 1981. Indeed, no one
firm has been crucial to the tech industry in general.
Why, then, is Congress now poised to accede to the industry's demands on
H-1B visa quotas? As the saying goes, "Follow the money." As Sen. Bob
Bennett, R-Utah, said after Congress enacted the H-1B program expansion in
2000, "There were, in fact, a whole lot of [members of Congress] against
it, but because they are tapping the high-tech community for campaign
contributions, they don't want to admit that in public." Meanwhile, a
reasonable H-1B reform bill by New Jersey Rep. Bill Pascrell is being
ignored, not only by the Republicans but also by his fellow Democrats.
You may have thought that November's election changed things, but they
aren't changing that much after all.
Norman Matloff is a professor of computer science at UC Davis.
3. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.americandaily.com/article/16838
Illegal Immigration: India Invades America
By William H. Calhoun (12/18/06)
An ex-Army intelligence officer recently said, "We are under attack. And
it's not just Mexico. It's all Central and South American countries. It's
India. It's China. It's most of the non-European world. And if we do not
fight back soon, America will be third-world sewer within 30 years!."
America is currently being invaded from all corners of the world. Mexico.
China. Africa. India. They all are invading and carving out their enclaves.
And you know what? They are backed by big business and the American
government.
A perfect case in point is India. The Indian Government and American
corporations have been lobbying the US for more H-1B visas to allow Indians
to move to the United States.
American companies use the H-1B to drive down American wages. An associate
of mine who works for a high-tech company in California (whose name I
cannot say for legal reasons) recently watched about 90% of his fellow
American employees be fired from his company. They were replaced with H-1B
imports from India, who were paid about one-third of what the Americans
were making.
GW Bush has largely supported this H-1B invasion, portraying it as sound
policy. He, however, and the mainstream media always fail to mention that
large companies are using the H-1B to drive down wages whereby they fire
American employees and replace them with low-paid foreigners. They also
fail to mention that India has the largest Muslim population, the most
terrorist cells, and now the most reported cases of HIV in the world.
At my friend's high-tech company in California, within a few months of the
firings, two of the Indian employees had already spread HIV to three
Americans, three of the other Indians had known ties to terrorist cells in
India, and the Indians would openly speak of "exterminating the European
race." Was any of this reported in the mainstream media? Of course not. Did
any of these people serve jail time? Of course not. In essence, because of
H-1B provisions, they have more rights than American citizens. Nor is this
incident isolated.
As previously reported, I was at the airport recently in Los Angeles, and I
could overhear the conversation of some younger Indians waiting for a
flight from India. These youths were obviously raised in America, as they
did not have accents, unlike their parents sitting next to them. The Indian
youth, after debating their favorite rappers, began to discuss how recent
DNA studies show that Indians are closely related to Sub-Saharan Africans.
They then began to speak approvingly of India invading California, and went
on to say that they should "wipe out all the whites." Now, the parents,
seeing that I was listening, lightly admonished the youth, not really
because of what they said, but only because others could hear.
This is the norm all across America. After previously publishing my
experience in the Los Angeles airport, I received many emails from patriots
saying they had experienced very similar situations.
And you know what? GW Bush and Condoleezza Rice just gave these people more
nuclear technology.
The same ex-intelligence Army officer said to me, "This policy of giving
nuclear technology to India is borderline treason. The motivating factor
was big business, not national security. All of our intelligence has shown
that now it is just a matter of when, not if, an Indian detonates a
backpack nuke within the United States or sells one to a Mexican
nationalist."
And Bush has sworn to uphold the US Constitution? perduellio est communis!
If we don't immediately lose our country via a backpack nuke, then we most
certainly will lose our jobs and standard of living. Americans' wages are
dropping every year (adjusted for inflation) due to legal and illegal
immigration. We are being ambushed from every angle.
Patriotic Americas had better wake up! We are under attack. Be vigilant and
prepare! Stop the third-world invasion!
William H. Calhoun is a writer, paleoconservative, and a farmer who lives
on his ancestral estate.
4. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.indiaenews.com/business/20061205/31354.htm
Indians may get social security money on return from US
Tuesday, December 05, 2006
The US is considering a pact with India to refund social security
contributions by Indians on their return even if they had not worked for a
requisite number of years, a top official said Tuesday.
'We have this time very seriously discussed the implications of the
totalisation agreement with the Indian government,' said US Under-Secretary
of Commerce for International Trade Franklin L. Lavin, who is heading the
largest-ever American business delegation to India.
'This issue has been pending for a long time. This time we took it up
seriously with the Indian government. But I cannot really say when this
will be officially formulated,' he told reporters here.
According to the India-US CEO Forum, which was formed following a meeting
between Prime Minister Manmohan Singh and President George W. Bush in
Washington last year, Indians contribute some $500 million annually as
social security in the US with no benefits accruing to them.
The forum had recommended a totalisation agreement between the two
countries so that social security contributions are made in only one
country, or a refund-on-return regime is in place when an Indian employee
returns to India.
The demand is more from software professionals - with backing from the
National Association for Software and Service Companies (Nasscom) - who go
to the US for on-shore projects for stints that vary from a few months to
three years.
A holder of H1B visa can work for a maximum of six years in the US, but his
or her social security contribution can be refunded only after a minimum
stint of 10 years under current regulations.
Lavin, who concluded his week-long India visit Tuesday, lauded the
country's economic reforms programme and said US companies were seriously
considering major investments in India.
'Even though India faces some serious challenges in infrastructure, retail
and financial services, yet the country's reform process is on the right
track and US is there for support always,' he said.
'In the coming time we will see some big announcements,' said Lavin who was
here with a delegation of 238 members who first congregated in Mumbai last
week and dispersed to several Indian cities in smaller groups.
The delegation included representatives from some big names like Exxon, GE,
Motorola, AT and T, Avaya, IBM, Lockheed Martin, Northrop Grumman, Boeing,
Datacorp, Bank of America and many small and medium firms.
5. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.indiaenews.com/nri/20061215/32673.htm
Over 43,000 Indians got H-1B visa in US fiscal 2006
Friday, December 15, 2006
A total of 43,167 H1-B visas were issued to Indians in the US fiscal year
2006 which ended on September 30.
Stating this at a press conference here Friday, US consul general Peter
Kaestner said that this was part of the 127,000 temporary work visas that
were granted during the same period.
The H-1B visa allows American companies and universities to temporarily
employ foreign workers who have the equivalent to a US bachelor's degree.
H-1B employees are employed temporarily in a job category that is
considered by the US Citizenship and Immigration Services to be a
'specialty occupation'. This category is in high demand in India because of
the large number of IT professionals who move to the US every year.
Overall, a total of 358,734 temporary visas were issued to Indians in US
fiscal 2006, a 14 percent increase from the previous year, Kaestner said,
adding that during the same period over 30,000 immigrant visas were also
granted to Indians.
In the first two months of fiscal 2007, the number of US visas issued has
seen a 78 percent increase compared to the figure in the same period last
year.
Kaestner said that demand for H-1B visas is expected to increase in the
years to come.
IBM alone, he said, is planning to hire 50,000 IT professionals in the next
two years. 'And we expect one-third of these to come from India,' he said.
Asked whether there was any plan to increase the H-1B visa ceiling from the
current figure of 65,000 per year, he said, 'The US administration wants
the H-1B visa ceiling to be increased. We hope that the next Congress will
do it.'
6. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.ecommercetimes.com/story/54624.html
Wipro Chairman: Outsourcing Due to US Skilled Worker Shortage
By John Boudreau
San Jose Mercury News
12/09/06 4:00 AM PT
"I think Silicon Valley is well-positioned. It's expensive, it's got
traffic problems, but those are manageable problems. There is a huge spark
of creativity here. There is an ecosystem here that is huge. We can
supplement that. We are not going to displace that," Azim Premji, chairman
of Wipro Technologies said.
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Azim Premji has little patience for those who argue outsourcing is
stealing high-paying American tech jobs.
The chairman of Wipro Technologies, one of the Indian companies that have
rewritten the rules of the global software services market, says the United
States should be more worried about what is taught in its classrooms -- or,
rather, what isn't.
"You need more emphasis on mathematics in school," the 61-year-old
billionaire said during a recent visit to Silicon Valley. "It's a building
block."
Not Enough Engineers
In fact, there is a shortage of information technology engineers in the
United States, said Premji, who in four decades has led Wipro from a US$2
million cooking-oil processing company to a $2.4 billion global technology
player. In its most recent quarter, the Bangalore-based company reported
$765 million in revenue, a 41 percent increase from a year earlier, with
profits of $152 million, a 48 percent jump.
Premji has strong ties to the valley. He studied at Stanford University
during the mid-1960s, though his education was interrupted in his senior
year when he had to return to India to run the family business after his
father died. (He finished his bachelor's degree in electrical engineering
about eight years ago through a special arrangement that allowed him to do
correspondence work.)
In 1992, Wipro set up U.S. headquarters in Mountain View, Calif., and
launched its global business. Now the company has 61,000 employees
worldwide, including about 1,000 in California.
Premji, who owns about 82 percent of Wipro stock, sat down recently for an
interview at Wipro's Mountain View office. Here are edited excerpts of the
interview:
Q: Studies suggest a coming shortage of skilled engineers in India. Tech
companies are scrambling to find enough tech workers in India. Does this
concern you?
A: The skilled worker shortage is in the U.S., not so much in India. We are
finding there is a huge shortage in the U.S., exactly what you saw five
years back during the dot-com boom. Attrition levels are going up here. I
was with the dean of engineering at Stanford University in the morning, and
I was chatting him up and he said, though the amount of engineers the
United States is producing continues at 100,000, 110,000 a year, the number
of engineers going into information technology has significantly come down.
Q: What about the struggle to find workers in India?
A: As far as India is concerned, I think the supply of talent is adequate.
I think the growth of the industry there is putting some strain on talent
at the middle management level. Companies are putting a lot of effort and
energy into training. It is not a perfect situation of supply and demand,
but it's manageable. I think it's getting hyped out of proportion.
Q: The problem is more in the United States?
A: It's not a crisis. It just forces you to search more for talent outside
the United States. Europe is certainly not a source for talent because they
face the same problems. It's fundamentally linked to the fact the U.S. is
not producing enough engineers, enough IT engineers.
Q: Why is this?
A: You need more emphasis on mathematics in school. It's a building block.
Two, when this issue of outsourcing gets excessive visibility, young people
say, "Why should I become an engineer? It's not a secure job."
Q: Certainly, the issue of overseas employees using H-1B and L-1 visas to
work in Silicon Valley is controversial. Some workers believe companies
have used the visa programs to hire tech workers at cheaper rates.
A: It's a method of competitiveness. Currently, I think it's a non-issue
because the talent is not available in the U.S. So what jobs are we
depriving people of? I'm very clear: You are getting into another shortage
of IT professionals and those who complain they are not getting jobs, their
jobs are getting displaced, are going to be on the fire list anyway because
they were not doing their jobs well enough. I don't think they are being
deprived of their jobs because of outsourcing.
Q: You believe the H-1B visa program should be changed to allow more than
the current 65,000 a year.
A: I think it should be expanded. The limit of H-1B visas is 65,000. It has
remained that for five years. Exports of software from India to the U.S.
have gone up probably about three times in that period. It's become a
political issue.
Q: What challenges do you see Silicon Valley facing with the rise of India
and China as major technology forces?
A: I think it is the center of innovation, no doubt about that. I think
innovation here is improving, getting more aggressive. So I think Silicon
Valley is well-positioned. It's expensive, it's got traffic problems. But
those are manageable problems. There is a huge spark of creativity here.
There is an ecosystem here that is huge. We can supplement that. We are not
going to displace that. It's an ecosystem of creativity, an ecosystem of
entrepreneurship, an ecosystem of venture capital.
Q: How would you say the emergence of companies like Wipro are changing the
global tech services market?
A: It's getting more pervasive. It's spreading beyond conventional IT
outsourcing and BPO (business process outsourcing). It's spreading to
engineering services. It's spreading to knowledge services. It's spreading
to clinical services. It's spreading to very sophisticated R&D services,
like we do. Today, we are the largest third-party R&D outsourcing company.
7. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.presstelegram.com/news/ci_4849017
Engineers stole trade secrets
Prosecuting economic espionage is harder when foreign countries are
involved.
By Jordan Robertson, Associated Press
Long Beach Press Telegram
Article Launched:
SAN JOSE - Two engineers were moments away from boarding a flight to China
when they were singled out for what appeared to be a routine customs
inspection. They didn't know FBI agents were waiting nearby, ready to
examine their luggage.
The contents, investigators said, were startling: Thousands of pages of
trade secrets stolen from four Silicon Valley companies, including
microchip blueprints and other closely guarded documents, many marked
"Proprietary" or "Confidential" or both. The men were arrested and their
homes raided.
Documents seized there allegedly revealed a plot to smuggle trade secrets
to China to start a microprocessor company backed by Chinese government
entities.
Fei Ye, 40, a U.S. citizen from China, and Ming Zhong, 39, a permanent U.S.
resident from China, pleaded guilty this week to the rare charge of
economic espionage to benefit a foreign nation. Legal experts said Friday
that the convictions - the first of their kind - were crucial victories for
federal prosecutors.
"It's a home run for the government and a much-needed one," said James
Pooley, an intellectual-property litigator and adjunct law professor at the
University of California, Berkeley. "It demonstrates not only that we do
have a real problem out there, but we also have the tools to combat it, and
the government can make it happen. Industry cannot stop this kind of
conduct on its own."
However, the settlement leaves unanswered one of the key underlying
questions of the case: Did the Chinese government or any of its officials
know the trade secrets were stolen?
No foreign official was charged in the case, and the law does not require
that the government prove complicity by foreign concerns to secure a
conviction.
Legal experts said if the government had evidence of foreign involvement,
but not enough to charge a foreign official, some of that might have come
out at trial. There's still a chance such evidence might come out in
sentencing arguments.
Prosecutors declined to discuss whether any foreign officials were
suspected in the Ye and Zhong case.
U.S. Attorney Kevin Ryan said investigations of international economic
espionage cases are often hampered by the difficulty in tracking down
suspects and evidence in other countries.
"We know this is going on," he said. "We know our technology is sought all
over the world, there are a lot of individuals who want to get it, and
there's a lot of money being thrown at them to get it."
Prosecutors have been criticized for not bringing more cases under the
Economic Espionage Act of 1996 that allege the intent to benefit a foreign
government.
The law was originally written to combat the threat of trade secrets by
foreign agents, with the FBI identifying at least 23 countries suspected of
aggressively seeking to steal intellectual property from U.S. businesses.
It was later expanded to include the lesser crime of domestic intellectual
property theft. But virtually all the indictments handed up have not
involved foreign nations or entities.
Some industry experts said the impact of the case against Ye and Zhong, who
remain free on bail, won't be known until they are sentenced April 23. They
each face up to 30 years in prison.
"That will be the real measure of whether this is the beginning of
sentencing with teeth in it," said Steven Fink, president of a Los
Angeles-based crisis management firm specializing in economic espionage
matters.
The same day that Ye and Zhong entered their guilty pleas in San Jose
federal court, Ryan's office announced the third-ever indictment for
economic espionage to benefit a foreign government.
Xiaodong Sheldon Meng, 42, a Chinese national with Canadian citizenship,
was indicted on 36 felony counts, including violations of military
technology export laws.
Meng is accused of stealing code for software made by his former employer,
Quantum3D Inc., that's used to train military fighter pilots, and trying to
sell it to the Thai and Malaysian air forces and a company with ties to
China's military.
The alleged plot was disrupted when a contractor spotted an altered version
of the program running on a Chinese company's computer system and told
Quantum3D, according to an affidavit. Meng was arrested in Florida in 2004
on a charge of transportation of stolen property after he returned to the
U.S. for an industry conference.
The only other case alleging economic espionage to benefit a foreign
government fizzled when a judge in Japan refused to extradite a defendant,
Takashi Okamoto, who was accused of stealing DNA used for Alzheimer's
disease research and providing it to a Japanese government-funded
corporation.
His alleged conspirator pleaded guilty to a much lesser charge of making
false statements to investigator.
Ross Nadel, the former federal prosecutor who handled the Ye and Zhong
investigation until last year and is now in private practice, said many
economic espionage cases are prosecuted as theft of trade secrets or other
crimes because even if foreign involvement is suspected, there often isn't
enough evidence to prove it.
"It's a significant challenge to prove that element of that offense -
significant but not impossible," he said.
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