Nation & World

For $25,000, a Virginia man allegedly gave China secret U.S. documents

The Shanghai Academy of Social Sciences is one of the main think tanks in the thriving Chinese port city.
The Shanghai Academy of Social Sciences is one of the main think tanks in the thriving Chinese port city. McClatchy

A Virginia man arrested Thursday for passing top secret defense information to Chinese intelligence agents in Shanghai faces a possible sentence of life in prison, the Justice Department said.

Kevin Patrick Mallory, 60, turned over the material during trips to Shanghai in March and April, when he met with two Chinese agents, the department said in a statement.

Mallory worked from 1987 to 1990 as a special agent for the State Department Diplomatic Security Service, then went on to “various government agencies” before leaving government in 2012, a criminal complaint said.

During much of his career, which included stints in Iraq, China and Taiwan, Mallory held a top-secret security clearance, the complaint said.

Mallory told the FBI that the Chinese agents paid him $10,000 in March and $15,000 in April during the two trips to Shanghai, and encouraged him to get back into U.S. government service, where he would have access to more secret documents, it said.

The complaint did not specify when counter-intelligence agents first began to suspect Mallory, a fluent Mandarin speaker, of espionage.

But when Mallory landed at O’Hare Airport in Chicago April 21 after a trip to Shanghai, he told customs agents that he worked as a consultant for GlobalEx, a company he said he founded in 2010. He said he had met someone in China through a contact at his church.

Agents found $16,500 in two carry-on bags

In a subsequent voluntary interview with the FBI, Mallory told agents he was contacted by a Chinese recruiter through a social media site in February, and later arranged a trip to Shanghai, where he met a person who presented himself as a worker for the Shanghai Academy of Social Sciences, one of the city’s leading think tanks.

The Academy is known to provide cover for Chinese spies, the complaint said, and Mallory knew the person was a spy because of his own “overseas operational experience, which made it easy for him to spot tradecraft.”

At first, the Chinese agent and his supervisor tasked Mallory with writing white papers about U.S. policy matters, but also gave him an electronic device to communicate with one of them, it said.

On examining the device, the FBI ascertained that Mallory had turned over eight documents to the agents, one of which was classified top secret and two that were classified secret, the complaint said, adding that they had to do with U.S. defense.

The device also contained a message that Mallory had sent that stated, “I can also come in the middle of June (and) I can bring the remainder of the documents I have at that time,” it said.

Mallory told the FBI that the reference to documents was to other white papers that contained only non-classified information.

After a technical review of the device, the FBI was able to extract other messages from a secure cache, it said. One message on May 3 from Mallory read: "The black was to cross out the security classification (TOP SECRET//ORCON//...I had to get it out without the chance of discovery. … 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."

A message two days later from Mallory to one agent said, “your object is to gain information, and my object is to be paid for,” the complaint said.

After arresting Mallory at his two-story Leesburg, Virginia, home, federal agents searched the property.

Mallory is charged with making false statements to federal agents and delivering defense information to a foreign government, marking the second time this year a U.S. government employee is charged with spying for China.

In late March, the Justice Department charged a veteran State Department employee, Candace Claiborne, with taking money over a five-year period from Chinese intelligence agents. Claiborne allegedly received an iPhone, a laptop, $2,500 in cash, vacations and a fully furnished apartment for her collaboration.

Tim Johnson: 202-383-6028, @timjohnson4