Chi Tong Kuok, a “spy” from Macau, was arrested and convicted this week for smuggling military encryption gear into the People’s Republic of China. Kuok was not only an alleged spy, he was a spy because he downright admitted it.
“Acting at the direction of officials for the People’s Republic of China,” according to a government affidavit in the case. “Kuok indicated he and PRC officials sought the items to figure out ways to listen to or monitor U.S. government and military communications.”
The U.S. first began investigating Kuok in December 2006, when he e-mailed a contact in the defense industry asking for software that would control a VDC-300 airborne data controller. The controller is a device used for secure satellite communications between American military aircraft. Kuok was looking for the crypto key that would successfully unscramble the encrypted communication feeds. With access to this tool, Kuok could have listened in on the encrypted communication feed between military aircraft and military bases. Obviously this has huge implications for the security of the U.S. government.
After hearing this request, the contact referred Kuok to an undercover agent in San Diego, who began negotiating with Kuok over a shopping list of military technology, which eventually grew to at least 43 different items.
After further investigating, the government found out that Kuok used multiple aliases to try to get people to sell him the crypto keys and was even successful in getting it a couple of times. One example is from last March, when a genuine U.S. source sold Kuok that two export-restricted PRC-148 handheld digital military radios for $8,000, shipping them to Kuok’s address in Macau, and accepting payment over Western Union.
This is where Kuok blew his cover. He e-mailed the undercover agent asking to buy some more crypto gear and told him that he was interested in buying it if it came with a particular encryption key. Kuok also expressed to the agent that he was scared that the contact (the undercover agent) was working for the FBI, but still continued to do business with him.
After some more negotiating over e-mail, the undercover agent finally agreed to meet Kuok in Panama, where he would complete the delivery of the crypto gear. Unfortunately for Kuok, his plane stopped in Atlanta, where he was arrested and held without bail. After further investigation, Kuok was transferred to California and convicted for money laundering, conspiracy, smuggling and one count of attempting to export a defense article without a license.