Faulty Chinese spy technology may help convict former CIA officer of espionage

Update on Kevin Mallory case, the former CIA officer who was approached by Chinese intelligence officers on LinkedIn:

Faulty Chinese spy technology may help convict former CIA officer of espionage (Washington Post)

The phone the Chinese intelligence operatives gave Kevin Mallory was a specialized spy gadget. If it had worked like it was supposed to, he might be a free man today.

The former CIA officer, on trial in Alexandria federal court on espionage charges, freely told his old colleagues that he had been approached by those spies on social media in February of 2017. He said he had been invited on two trips to China and given a Samsung Galaxy phone with special encryption capabilities.

What he didn’t tell his U.S. intelligence contacts, and, according to prosecutors, what he thought they would never learn, was that he also traded classified documents to the Chinese agents in exchange for $25,000.

Mallory, a 61-year-old from Leesburg, Va., who also served in the Defense Intelligence Agency, State Department and U.S. Army, was arrested last spring. While prosecutors say he was selling secrets, he contends he was trying to expose the Chinese spies. Whatever jurors decide, the veteran intelligence operative’s trial is offering a glimpse into some of the inner workings of both Chinese espionage and American attempts to counter it.

It’s “very rare” for a foreign intelligence service’s device “to be revealed like that,” FBI agent Paul Lee testified on Thursday. The phone would have cost the Chinese government a lot of money to develop, he had told Mallory last year.

Mallory explained in meetings with the CIA and FBI, which were recorded and played for the jury, that the phone contained an app designed to facilitate steganography, or the hiding of information inside of an image. Documents were merged into a file that appeared as an image — in this case, the Chinese chose horses grazing in front of a mountain range.

To send the files through the secure version of the app, which was a customized version of the Chinese messaging service WeChat, both parties had to be online and type in a password. (The one built into the application, Mallory told the officials, was the word “password,” in English.)

Mallory told the FBI that the Chinese spies told him they had found a “special way” to make the app safer.

But their system was flawed. James Hamrock, an engineer who analyzed the phone for the FBI, said he believes the encrypted application crashed at one point, creating an unintentional log of Mallory’s communications with one of the Chinese spies. . . . (read the rest)

Accused Spy Kevin Mallory Goes to Trial (Lawfare)

On Wednesday morning, in the U.S. District Court for the Eastern District of Virginia, Judge T.S. Ellis III presided over opening arguments in the espionage trial of former U.S. intelligence officer Kevin Mallory. Last summer, a grand jury returned an indictment against Mallory for turning over classified information to aid a foreign power in violation of the Espionage Act and lying to the FBI about it.

It’s not every day that an accused spy sees his day in court—such cases rarely go to trial.

Mallory is a 61-year-old former employee of the CIA, DIA, State Department and U.S. Army, who held a top-secret security clearance that terminated at the end of his government service in October 2012. He is fluent in Mandarin and has been stationed in countries including Iraq, China, and Taiwan. . . .

. . . . The government alleges that the following exchange took place on May 3:

Operative: I suggest you send all and retype the handwriting. And NO1 is obvious the first page of a complete article, where the else is and why it is black on top and bottom….We will try our best to apply for another sum of amount, as you required. However, I’m not sure it will be the same amount for now and I will try, and for safety, we cannot send u in one time or in a short period altogether, need to figure out a better way.

Mallory: The black was to cross out the security classification (TOP SECRET//ORCON//…I had to get it out without the chance of discovery. Unless read in detail, it appeared like a simple note…I have arranged for a USD account in another name. You can send the funds broken into 4 equal payments over 4 consecutive days…When you agree I will send you the bank E.g. instructions.

It was dicey (look it up) when they asked for me by name. If they we looking for me in terms of State Secrets, and found the SD card…, we would not be talking today. I am taking the real risk as you, [PRCS], and higher up bosses know… “When you get the OK to replace the prior payment, then I will send more docs. I will also type my notes. NOTE: In the future, I will destroy all electronic records after you confirm receipt…! Already destroyed the paper records. I cannot keep these around, too dangerous.

Then, on May 5, the following interaction occurred:

Mallory: [Y]our object is to gain information, and my object is to be paid for.

Operative: My current object is to make sure your security and try to reimburse you. . . .  (read more)

Covert Phone Call Played at Trial of Ex-CIA Agent (Courthouse News)

In a recorded phone call from prison following his arrest for the alleged sale of defense secrets to China, former CIA agent Kevin Patrick Mallory played a risky guessing game with his son.

Mallory, who was arrested on charges of espionage and making false statements to authorities last June, wanted information from his son but would not say directly what he was after.

So in an excerpt played in a Virginia federal court Friday, jurors heard Mallory giving his son a series of indirect clues, probing him for a list of what FBI agents seized when they raided his home a day earlier.

Agents turned Mallory’s bedroom closet inside out until finally an officer found a ball of tin foil concealing a Toshiba 32GB SIM card.

According to prosecutors, the card held nine documents, all of which contained classified or top secret information about U.S. defense programs and operations, including information about how U.S. intelligence agencies communicate or demarcate sensitive Foreign Intelligence Surveillance Act documents.

“Remember when you had your phone fixed?” Mallory asked his son on the call from jail. “It will be just like that. Look on the sheet and see.”

Prosecutors argued Mallory was attempting to indirectly speak about the SIM card without confirming whether it existed. The sheet Mallory referred to was a carbon copy inventory list authorities left with his family following the raid. . . . (read the rest)

Federal trial begins for Leesburg man accused of espionage for China (AP)

Prosecutors say a former CIA case officer betrayed his country by giving a Chinese spy information about human assets and other top-secret information in exchange for $25,000.

But defense lawyers say their client is a loyal American who was merely stringing the Chinese along to try to get them to expose details of their own intelligence operation.

A jury heard opening statements Wednesday in the trial of Kevin Mallory, 60, of Leesburg, who was working as a self-employed consultant when he returned from Shanghai with more than $16,000 in undeclared cash.

Defense attorney Geremy Kamens said Mallory had grown suspicious about a Chinese think tank’s job offer and hatched a plan to feed them phony documents. He told people at the CIA, but prosecutors said that was just to cover his tracks.

Prosecutor Jennifer Gellie told jurors that Mallory’s scheme unraveled when he was selected for secondary screening at O’Hare Airport in April 2017 on a flight back from Shanghai with his son. There customs agents found $16,500 in unreported cash, and they questioned Mallory about the nature of his trip. . . . (read more)

Prosecutors Show Interrogation Video in Ex-CIA Officer’s Espionage Trial (NBC Washington)

Prosecutors showed the interrogation video of an ex-CIA officer accused of espionage in court Friday.

Prosecutors say 61-year-old Kevin Mallory of Leesburg, Virginia, sold secret documents to the Chinese for $25,000 last spring. Mallory claims his meeting with the Chinese was about his consulting business.

During the interrogation, Mallory explained to investigators his consulting work with Chinese researchers, which is how Mallory said they represented themselves to him.

“And they said, kind of words to the fact that, ‘Well, if we were the government, would that make a difference?’ kind of thing,” Mallory told investigators. “I said, ‘Well, if you are the government, OK, it doesn’t make a difference to me, but what are we consulting on?’” . . . (read more)

 

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