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Xiang Li (hacker)

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The native form of this personal name is Li Xiang. This article uses Western name order when mentioning individuals.

Xiang Li (Chinese: 李翔) is a Chinese cyber hacker currently serving a twelve year sentence in federal prison in the United States.[1]

Early life and career

Li was born in Chengdu, China in 1977. From Chengdu, he operated "CRACK99", a website that sold stolen, advanced software globally from 2008 until his arrest by U.S. authorities in 2011. During that time, he sold over $100 million in industrial-grade software the access controls to which had been circumvented – or cracked. The software sold by Li had both civilian and military applications including aerospace and aviation simulation and design, communications systems design, electromagnetic simulation, explosive simulation, intelligence analysis, precision tooling, oil field management, and manufacturing plant design.[2]

U.S. government investigation

One of the software titles for sale on CRACK99 was “Satellite Tool Kit 8.0” (“STK”), designed by Analytical Graphics Incorporated (AGI) to enable the U.S. military to simulate missile launches and flight trajectories of aircraft and satellites. AGI brought this fact to the attention of U.S. Homeland Security Investigations in December 2009. As a result, a team of prosecutors and agents from the Department of Justice, Homeland Security, and the Defense Criminal Investigative Service initiated an undercover investigation in 2010. As part of that investigation, federal agents purchased STK software from the CRACK99 website, as well as other advanced software used in spacecraft design and programmable logic devices.[3]

Lurement and being arrested in Saipan

U.S. undercover agents posed as criminals in the United States who were reselling the software obtained from CRACK99. Li and the agents engaged in lengthy email and Skype conversations about increasing sales by expanding the U.S. market, Ultimately, Li agreed to meet the agents in Saipan to discuss future business opportunities. On June 6, 2011, Li met with undercover agents at a hotel in Saipan. At the undercover meeting, Li provided agents with 20 gigabytes of proprietary data hacked from a defense contractor. “It’s the database,” explained Li, “I was thinking [it] would be difficult to pass through the custom.” This data included military and civilian aircraft image models, a software module containing data associated with the International Space Station, and a high resolution, 3-dimensional imaging program.[4]

Li further advised the undercover agents: “Don’t just sell it … randomly! …. Only the familiar and reliable customers…. The products … are pretty…um… like confidential. [Don’t] … go and tell other people.” The agents asked if Xiang Li could get software in addition to what he had listed on CRACK99. “I mean as long as [you] can tell me the name,” Li said, “I could find a way to get it ....” Xiang Li asked the agents: “I want to ask a question. … Will [your] customers be able to find me? Will [they] be also contacting me? …. Will [the customers] be able to locate me?” Shortly thereafter, Li was arrested, waived his right to remain silent, and confessed to his crimes.[5]

Indictment, plea, and sentencing

A federal grand jury charged Li by indictment with multiple federal charges involving the sale of more than $100 million in stolen copyrighted software. The $100 million figure was based on the results from e-mail search warrants executed on Xiang Li’s email accounts, which revealed about 600 illegal transactions between April 2008 and August 2010. In January 2013, the federal district court in Delaware accepted Xiang Li’s guilty plea to one count each of conspiracy to commit criminal copyright infringement and conspiracy to commit wire fraud, exposing him to a maximum of 25 years of incarceration.[6]

In June 2013, the court held a sentencing hearing. Li contended that software piracy was “prevalent” in China, opining that “[p]robably ten million people in China are doing things illegally with software.” The U.S. government agreed that cyber theft is prevalent in China,[7] but contended that the prevalence of Chinese piracy is not a defense, and pointed the court to a report estimating China’s illegal software market as reaching $9 billion in 2011, out of a total market of nearly $12 billion, thus setting a piracy rate of 77 percent.[8] The government also emphasized the advanced nature of the software sold by Li and fact that many of the software products had military applications.[7]

The court noted “the extensive amount of crime that the defendant was engaged in, finding: “This was nothing less than a crime spree, and it was brazen.” [9] The court found that the software was “highly sophisticated” and “ended up with individuals and sometimes in countries that are not authorized to have those software materials.”[5] The court sentenced Li to 12 years in prison, the longest criminal copyright sentence ever imposed.[1]

American customers

Li sold cracked software programs worth over $600,000 to Dr. Wronald [sic] Best, the “Chief Scientist” of a U.S. defense contractor involved in applications such as radio communication, radar, and microwave technology. Dr. Best used the cracked software to design components for Patriot missiles and radar for “Marine One” (the President’s helicopter) and the Army’s Black Hawk helicopter.[10][11]

Another U.S. customer of Li was Cosburn Wedderburn, who purchased over $1,000,000 in cracked software programs. At the time, Wedderburn was an engineer employed by NASA.[12]

References

  1. ^ a b "Chinese Citizen Sentenced to 12 Years in Prison for Cyber-Theft and Piracy of over $100 Million in Sensitive Software and Proprietary Data". Justice.gov. 2015-07-14. Retrieved 8 December 2018.
  2. ^ "CRACK99 - W. W. Norton & Company". Books.wwnorton.com. Retrieved 8 December 2018.
  3. ^ Ibid. Chapter 1
  4. ^ Ibid. Chapter 11
  5. ^ a b Ibid.
  6. ^ "FOR THE DISTRICT OF DELAWARE UNITED STATES OF AMERICA, Plaintiff, Cr. A. No. 10-112-LPS v. XIANGLI, Defendant" (PDF). Ice.gov. Retrieved 8 December 2018.
  7. ^ a b "GOVERNMENT'S SENTENCING MEMORANDUM" (PDF). Content.govdelivery.com. Retrieved 8 December 2018.
  8. ^ [1] [dead link]
  9. ^ Sentencing Transcript at 46, United States v. Xiang Li, 10-112-LPS pp. 57, 60
  10. ^ "Chief Scientist Of Government Contractor Sentenced To One Year In Prison For Conspiring To Obtain Pirated Software From Chinese And Russian Cybercriminals". Justice.gov. 14 July 2015. Retrieved 8 December 2018.
  11. ^ "Chinese Citizen Sentenced To 12 Years In Prison For Cyber-Theft And Piracy Of Over $100 Million In Sensitive Software And Proprietary Data". Justice.gov. 14 July 2015. Retrieved 8 December 2018.
  12. ^ "U.S. Attorney's Office - U.S. Department of Justice". Justice.gov. Retrieved 8 December 2018.
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