Linwei Ding, a Chinese national who also goes by Leon, was charged by a federal grand jury in San Francisco with four counts of trade secret theft, each punishable by up to 10 years in prison. He was arrested on March 6 in Newark, California, where he lives.

The 38-year-old allegedly stole more than 500 files containing confidential information between May 2022 and May 2023, including detailed information about the hardware infrastructure and software platforms allowing Google’s supercomputing data centers to train large AI models through machine learning, according to the indictment.

Within weeks after Mr. Ding began the theft activity, the indictment said, an early-stage Chinese company with a focus on AI offered to make him its chief technology officer. The position came with a monthly salary of about $14,800 with an annual bonus and company stock.

In October 2022, Mr. Ding traveled to China and stayed there until the following March, participating in investor meetings to raise capital for the firm, Beijing Rongshu Lianzhi Technology.

In May 2023, he founded an AI startup in Shanghai.

“We have experience with Google’s ten-thousand-card computational power platform; we just need to replicate and upgrade it—and then further develop a computational power platform suited to China’s national conditions,” he stated in a document promoting his company on the China-based social media platform WeChat.

He also had another Google employee scan his access badge on three separate days in December 2023 to create the impression that he was working from the U.S. Google office when, in fact, he was in China, the Google investigators found after examining surveillance footage.

Mr. Ding initially managed to evade Google’s detection by copying the Google data into the Apple Notes application on his Google-issued MacBook then converting it into PDF to upload to his personal Google Cloud account.

But in December 2023, when he uploaded additional files from the Google network to another personal account while in China, Google became suspicious.

He then told a Google investigator that he had intended to use the information as evidence of the work that he had done at Google, according to the indictment.

Mr. Ding didn’t disclose either of his affiliations with China-based firms to Google, prosecutors said.

Less than a week later, he booked a one-way ticket to Beijing slated to depart on Jan. 7. He then resigned from Google on Dec. 26.

Google retrieved Mr. Ding’s Google laptop and mobile device from his home the day before his planned last day at the company, Jan. 5.

Stealing US Innovation

Attorney General Merrick Garland disclosed the details of the case at an American Bar Association Conference in San Francisco on March 6.

“We will fiercely protect sensitive technologies developed in America from falling into the hands of those who should not have them,” he said.

FBI Director Christopher Wray said the charges were “the latest illustration of the lengths affiliates of companies based in the People’s Republic of China are willing to go to steal American innovation.”

“The theft of innovative technology and trade secrets from American companies can cost jobs and have devastating economic and national security consequences,” he said in a statement.

The interagency Disruptive Technology Strike Force that partook in the case was set up by the Department of Justice and the Department of Commerce last year with an eye on threats of China’s ruling Chinese Communist Party’s exploiting U.S. innovations for its military development.

Deputy Attorney General Lisa Monaco in a speech last month said that AI is a top priority for the task force, describing it as the “ultimate disruptive technology.”

Mr. Wray, in a late February national security conference, also warned about the danger of generative AI in “making it easier for both more and less-sophisticated foreign adversaries to engage in malign influence” and interference with the U.S. political process.

In a recent letter to shareholders, BlackRock Global Funds’ chairwoman Denise Voss said they will close the China Flexible Equity Fund over a “lack of shareholder interest” and the investment cost to keep the fund running, which she noted is “not in the best interests of shareholders.”

BlackRock intends to liquidate all assets under the fund and redeem any outstanding shares by Nov. 7. Existing shareholders have the options to switch their investments into another fund, sell back their shares ahead of the liquidation date, or receive automatic payments for the shares when the fund closes down.

Launched in October 2017, China Flexible Equity Fund has an asset value of around $21.4 million as of late August after a six-year run. It recorded a negative 16.7 percent return in 2021, a number that nearly doubled in 2022, to negative 30.5 percent.

The fund closure came just a month after the House Select Committee on the Chinese Communist Party launched a probe into BlackRock and investment index provider MSCI regarding the alleged investments in Chinese companies the U.S. government has deemed problematic.

The two firms together facilitated investment into over 60 Chinese entities hit with U.S. sanctions over national security or human rights issues, the lawmakers said, noting their review was far from comprehensive and thus the actual number of benefited Chinese companies is likely higher. Across five funds, BlackRock has invested over $429 million in such Chinese firms against U.S. interests, according to the House committee.

Some of the top invested Chinese entities for China Flexible Equity Fund include Tencent, a Chinese state-backed tech giant that had aided Beijing in silencing dissent and spreading propaganda through its popular messaging app WeChat, as well as state-owned hydropower operator China Yangtze Power and Nari Technology, the country’s largest supplier of electric power equipment.

In a response to the congressional probe, BlackRock had told The Epoch Times that it “complies with all applicable U.S. government laws” regarding “all investments in China and markets around the world,” and noted that it is one of 16 asset managers offering U.S. index funds that invest in Chinese companies.

It didn’t immediately respond to a request for comment regarding the China fund closure.

But across the board, there are growing signs of wariness from U.S. investors toward the Chinese market. The long-hoped-for economic recovery after the regime lifted its stringent COVID-19 curbs has not happened. Instead, the country faces a slowing economy, with a sharp drop in trade, millions of young Chinese struggling to find a job, a housing crisis, and growing tensions with the United States.

In August, President Joe Biden signed an executive order to restrict U.S. investments toward China in advanced technologies such as artificial intelligence, quantum technology, and semiconductors, citing risks for U.S. national security.

For a U.S. investor, “there is nothing bigger than the current trade tensions between the U.S. and China,” Gary Dugan, chief investment officer at the UAE-based Dalma Capital, a global alternative investment platform and an avid China investor, told The Epoch Times.

China’s regulatory environment also presents increasing challenges to foreign investors. China in July officially expanded an anti-espionage law that could criminalize regular business activities. Authorities this year have also ordered a raid on Bain & Co.’s office in Shanghai and due diligence firm Mintz Group’s office in Beijing. In May, it told local operators of “critical information structure” to stop buying products from U.S. chipmaker Micron Technology.

“Increasingly, I hear from American business that China is uninvestable because it’s become too risky,” said Commerce Secretary Gina Raimondo on Aug. 29, during an official visit to China. She said she had made 120 to 150 calls with business and labor leaders in preparing for the trip.

Foreign investors have dumped Chinese stocks at a record pace in August as China’s economy continues to decline. Data from Hong Kong’s Stock Connect trading scheme shows that sales by offshore traders on the Chinese equity market reached around some $11 billion over three weeks since Aug. 7.

Early in August, HSBC said it had cut its Chinese commercial property exposure by $5.5 billion by the end of June from last year. Standard Chartered also reduced exposure to $3 billion, down from $3.7 billion a year ago.

Article cross-posted from our premium news partners at The Epoch Times.

In letters dated July 31 to BlackRock CEO Larry Fink and MSCI head Henry Fernandez, the U.S. House’s China Select Committee stated that a brief review of MSCI indexes and BlackRock funds showed that the two companies together have directed investments to more than 60 Chinese entities already on the U.S. blacklist.

As a “direct result” of BlackRock’s and MSCI’s decisions, Americans who invested savings in their funds are now “unwittingly funding” Chinese companies that build weapons for the Chinese military known as the People’s Liberation Army, giving a hand to “the CCP’s stated mission of technological supremacy,” Rep. Mike Gallagher (R-Wis.), the committee’s chairman, and Rep. Raja Krishnamoorthi (D-Ill.), the ranking Democrat, wrote.

“It is unconscionable for any U.S. company to profit from investments that fuel the military advancement of America’s foremost foreign adversary and facilitate human rights abuses,” the lawmakers wrote, adding that the “massive flows of American capital” to these entities are “exacerbating an already significant national security threat and undermining American values.”

In the case of BlackRock, across five funds alone, the asset manager has invested more than $429 million in flagged Chinese firms, while nearly 5 percent of the MSCI China A Index is pegged to blacklisted entities. Such numbers, the lawmakers suspect, are only the tip of the iceberg.

The probe makes up part of the committee’s ongoing investigation into U.S. investments in China, which, in July, included venture capital firms that have invested in China-based artificial intelligence, semiconductor, and quantum companies.

A tough stance on China is one of the few issues that garner support from both political sides in the deeply divided Congress. The bipartisan House panel, formed in January, makes policy recommendations and has subpoena power, which Mr. Gallagher has said he would use if executives fail to cooperate with the committee probes.

“Both Democrats and Republicans can agree that we should not be funding PLA military modernization, supporting the CCP’s techno-totalitarian surveillance state, nor the CCP’s gross human rights abuses,” a source close to the committee told The Epoch Times.

MSCI has more than $13 trillion benchmarked to its products, making it one of the largest index providers globally. BlackRock oversees more than $9 trillion in assets, and is responsible to millions of U.S. investors who depend on its services for their future retirement.

BlackRock told The Epoch Times in a statement that it “complies with all applicable U.S. government laws” with “all investments in China and markets around the world,” and will continue to engage with the committee on the issues raised.

“Like many global asset managers, BlackRock offers our clients a number of strategies to invest in or exclude China from their portfolios. The majority of our clients’ investments in China are through index funds, and we are one of 16 asset managers currently offering U.S. index funds investing in Chinese companies,” a company spokesperson said.

MSCI, similarly, said it’s reviewing the request for information from the lawmakers.

“MSCI indexes measure the performance of equity markets available to international investors, and comply with all applicable U.S. laws. MSCI does not manage or recommend or facilitate investments in any country,” an MSCI spokesperson told The Epoch Times.

The Chinese entities on MSCI indexes include state-owned aerospace firm Aviation Industry Corp. China, which makes aircraft for the Chinese military; BGI Genomics, a military-linked Chinese genetics giant that the United States has found complicit in supporting forced labor; and ZTE, whose telecom equipment the United States banned last year, citing national security risks.

BlackRock, meanwhile, has funded a major subsidiary of China General Nuclear Power Group that the U.S. authorities accused of stealing U.S. nuclear technology, as well as that of China North Industries Group Co., producer of artillery shells and munitions for the Chinese military.

The lawmakers said they want to see a list of all the companies on MSCI indexes, as well as the thinking behind their inclusion, policies, and guidance documents relating to conflicts of interest that BlackRock has applied when engaging with China-linked entities, and details of U.S. investor exposure.

Article cross-posted from our premium news partners at The Epoch Times.

“The case against Donald Trump is a legal disaster, a weaponizing the justice system against a political opponent,” Ellis, a former attorney for Trump’s 2020 campaign, told The Epoch Times after a grand jury in New York voted to indict the former president.

The Manhattan district attorney’s office has been investigating Trump in connection with an alleged hush money payment to adult performer Stormy Daniels during the 2016 presidential campaign. Trump, who is the frontrunner in the field of 2024 presidential hopefuls, has denied any wrongdoing, describing the March 30 indictment as “political persecution and election interference.”

Ellis expressed the same view.

“The only reason DA Alvin Bragg is bringing charges is because Trump is running for the GOP 2024 presidential nomination,” she said, noting that such efforts are likely to backfire.

“The DNC and RNC want a post-Trump America, yet they are incentivizing donors and the MAGA base to rally support against Trump because no one deserves to be politically prosecuted.”

She pointed to Trump’s top potential rival for the Republican nomination in 2024, Florida Gov. Ron DeSantis, who came out to denounce the indictment as “un-American.” He also declared that he will not assist in any extradition of Trump, a Florida resident, “given the questionable circumstances at issue with this Soros-backed Manhattan prosecutor and his political agenda,” referring to controversial billionaire financier George Soros.

A throng of prominent Republicans have come to Trump’s aide in the wake of the indictment and criticized the charges against him as politically motivated.

House Speaker Kevin McCarthy (R-Calif.), like Ellis, said that Bragg has “irreparably damaged our country in an attempt to interfere in our Presidential election.”

“As he routinely frees violent criminals to terrorize the public, he weaponized our sacred system of justice against President Donald Trump,” he wrote, vowing that the House will “hold Bragg and his unprecedented abuse of power to account.”

Rep. Elise Stefanik (R-N.Y.), the House GOP conference chair, released a statement saying the indictment was a “dark day for America.”

“The radical Far Left will stop at nothing to persecute Joe Biden’s chief political opponent ahead of the 2024 presidential election to suppress the will and voice of the American people,” she wrote.

Democrats, in the meantime, hailed the news, with Senate Majority Leader Chuck Schumer (D-N.Y.) saying that Trump is “subject to the same laws as every American.”

The swift response from DeSantis is rewarding politically, Ellis noted. With such a statement, she said, he is positioning himself as “a champion for the rule of law” and an “executive officer who will not allow political games.”

“Voters will love that display of strength and backbone,” she said.

Trump’s lawyer Joseph Tacopina has told CNN that Trump, who is reported to be in Florida currently, will likely be arraigned early next week.

The Epoch Times has reached out to Bragg’s office for comment.

Article cross-posted from our premium news partners at The Epoch Times.