FBI says Chinese stakeholder in proposed plant has been engaged in two-decade conspiracy to steal US nuclear secrets

A network of agents, payments from a Beijing-backed slush fund and a series of illicit transfers of highly sensitive nuclear knowhow: the case against Britain’s Chinese partner in the controversial Hinckley Point C project could have leapt from the pages of a modern spy thriller.

According to the US Department of Justice, the FBI has discovered evidence that China General Nuclear Power (CGN) has been engaged in a conspiracy to steal US nuclear secrets stretching back almost two decades.

Both CGN and one of the corporation’s senior advisers, Szuhsiung Ho, have been charged with conspiring to help the Chinese government develop nuclear material in a manner that is in clear breach of US law.

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Ho, who is alleged to have boasted that “budget is no issue” while developing his network of co-conspirators, has also been charged with acting unlawfully as a foreign agent.

His legal team argues that there is far less to this affair than meets the eye. It says he is an innocent, 66-year-old Chinese American known to most of his friends and neighbours as Allen Ho, who has been openly engaged in commercial activity involving non-classified information. Now, it says, overzealous prosecutors are turning his life upside down.

The lawyers also say that Ho could not possibly have known about the clauses in the US Atomic Energy Act that he is alleged to have breached, because no one has previously been charged under them in the 60-odd years they have been on the statute.

His lawyer, Peter Zeidenberg, says it is unclear to him whether any crime has actually been committed.

Ho’s legal team, however, has a number of hurdles to overcome. The first is that one of his alleged agents, Ching Ning Guey, a senior manager with the Tennessee Valley Authority’s nuclear programme, has already pleaded guilty to unlawfully developing special nuclear material outside the US without government authority.

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The guilty plea was sealed for more than a year, until Ho was arrested in Atlanta earlier this year, and both he and CGN were charged.

Another is that among the many emails the FBI has gathered and used to build a case against Ho is one in which he allegedly describes a $15,555 (£12,000) payment made to Guey as coming from “his company’s slush fund”.

CGN, Ho, and a company he owns called Energy Technology International, all face a charge that they “did conspire with each other and with others known and unknown to wilfully and knowingly engage and participate … in the development and production of special nuclear material outside of the United States, namely, in the People’s Republic of China”.

According to sections 2077(b) and 2272(a) of the Atomic Energy Act, this can be done only with the permission of the US energy secretary.

Ho faces a possible life sentence if convicted. The offence is also punishable by a $250,000 fine. There has been no immediate comment from CGN.

According to the indictment, Ho’s efforts began in 1997 and only came to an end with his arrest in April. He is alleged to have been attempting to provide technical assistance for CGN’s small modular reactor programme, advanced fuel assembly programme, in-core detector systems and various nuclear-related computer codes.

Operating from a large colonial-style mansion in the suburbs of Wilmington, Delaware, where he lives with his wife, Anne, Ho is alleged to have recruited Guey and five other nuclear specialists. Identified in the indictment as “US Persons 2 to 6”, they are all nuclear engineers or mechanical engineers working in the nuclear industry, and living in Pennsylvania, South Carolina and Colorado.

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He is said to have made a series of payments in exchange for reports that the six individuals submitted. Some of them were also paid for answering a series of questions submitted by CGN employees, and Guey and “Persons 5 and 6” are alleged to have travelled to China to give presentations.

Guey is said to have received his $15,555 payment in a cheque sent to an address in Chattanooga, and “Person 6” is said to have received $22,698 for consulting services and travel expenses.

Ho was born in Taiwan and graduated with a degree in mechanical engineering in 1971. Two years later he travelled to the US to take a master’s degree at the University of California, and married Anne the following year. He completed a PhD in nuclear engineering at the University of Illinois in 1980. The couple are naturalised US citizens.

When Ho appeared in court in Knoxville, Tennessee, in April, the Knoxville News Sentinel reported that prosecutors alleged he had channelled about $3m from a Chinese bank to various banks in the US. They also said that when arrested he was in possession of an encrypted Chinese bank card.

Ho is also said to have a second wife and a nine-year-old son in China. The assistant US attorney Charles Atchley Jr was quoted as saying: “This man is not living in the US. He may be a US citizen, but he lives in China. His family is in China.”

Zeidenberg insists that his client lives in Delaware, and on Tuesday he will ask the court in Knoxville to grant him bail, allowing him to live in the house with an electronic ankle tag.

In November, in an article in the Washington Post, Zeidenberg wrote that he believed innocent Chinese Americans were being victimised by prosecutors swept up by an atmosphere of paranoia about the dangers of cyber-attacks and industrial espionage directed by Beijing.

Two of his clients had been charged with illicitly handing over technical secrets, only for the charges to be dropped or dismissed, but by then their private and professional lives had been severely damaged.

“While the danger posed by Chinese agents may indeed be real, so is the danger of overreacting to it,” he wrote.