UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK H SEALED UNITED STATES OF AMERICA INBICTMENT v 81 16 Cr 360 IAT KONG BO ZHENG and CHIN HUNG fanatzars f Ejl fl f sg qfi i 1 9 7 Me Defendants @pr p saa-s - giltf j gf COUNT ONE Conspiracy to Commit Insider Trading The Grand Jury charges Background The Defendants and Relevant Brokerage Accounts 1 At all times relevant to this Indictment IAT HONG BO ZHENG and CHIN HUNG the defendants were citizens of mainland China and residents of China or Hong Kong 2 Between in or about April 2014 and in or about late 2015 IAT HONG BO ZHENG and CHIN HUNG the defendants purchased and sold equities of publicly traded companies on U S based stock exchanges through at least three online broker dealers the Brokers which traded on behalf of at least six accounts maintained by the defendants at least three accounts controlled by HONG the at least two accounts controlled by ZHENG the Accounts and at least one account controlled by HUNG the Hung Account collectively with the Hong Accounts and the Zheng Accounts the Trading Accounts HONG ZHENG and HUNG opened the Trading Accounts between in or about April 2014 and October 2014 3 At certain times relevant to this Indictment the Robotics Company was a start up robotics design company based in China started by BO ZHENG the defendant which was engaged in the business of developing robot controller chips and providing control system solutions IAT HONG and CHIN HUNG the defendants were both involved in running the Robotics Company The Victim Law Firms and Certain Relevant Clients 4 At all times relevant to this Indictment Law Firmm was a U S based international law firm with offices in New York New York which among other services provided advisory services to companies engaged in corporate mergers and acquisitions transactions including a In or about June 2014 Law Firmml was retained by a company not named herein the Company in connection with a contemplated acquisition of Intermune a U S based drug maker publicly traded at that time on the NASDAQ exchange under the ticker symbol the Contemplated Intermune Transaction A partner in the group at Law Firmml Partnerwl was an attorney with responsibility in connection with the Contemplated Intermune Transaction The Contemplated Intermune Transaction was ultimately not consummated b In or about January 2015 Law Firm l was retained by Intel Corporation Intel a multinational technology company publicly traded on the NASDAQ exchange under the ticker symbol in connection with a contemplated acquisition of Altera Corporation Altera an integrated circuit manufacturer publicly traded on the NASDAQ exchange under the ticker symbol the InteluAltera Transaction Partner-l was an attorney with responsibility in connection with the Intel Altera Transaction 5 At all times relevant to this Indictment Law Firmu2 collectively with Law Firm i the Infiltrated Law Firms was a U S wbased international law firm with offices in New York New York which among other services provided advisory services to companies engaged in transactions including a In or about December 2014 Law Firm 2 was retained by Pitney Bowes Inc Pitney Bowes an international business services company publicly traded on the New York Stock Exchange under the ticker symbol in connection with a contemplated acquisition of Borderfree Inc Borderfree an e commerce company headquartered in New York New York and publicly traded on the NASDAQ exchange under the ticker symbol the Pitney BowesuBorderfree Transaction A partner in the group at Law Firm-2 Partner 2 was an attorney with responsibility in connection with the Pitney Bowes Borderfree Transaction 6 At all times relevant to this Indictment certain other U S based international law firms with offices in New York New York _provided advisory services to companies engaged in transactions including Law Firm 3 Law Firm-4 Law Firm- 5 Law Firm 6 and Law Firmm7 the Targeted Law Firms collectively with the Infiltrated Law Firms the Victim Law Firms Robotics Company Victims 7 At all times relevant to this Indictment Robotics Company Victim 1 was a U S based company engaged in the business of designing and building robots including through the development of consumer robotics 8 At all times relevant to this Indictment Robotics Company Victim 2 together with Robotics Company Victim l the Robotics Company Victims was a Taiwanmbased company engaged in the design testing manufacture and distribution of analog integrated circuits for use in consumer electronics computers and communications equipment Overview of the Hacking and Insider Trading Schemes 9 As set forth more fully below from at least in or about April 2014 through at least in or about late 2015 HONG BO ZHENG and CHIN HUNG the defendants devised and carried out a scheme to enrich themselves by obtaining and trading on material nonpublic information Inside Information exfiltrated from the networksr and servers of the 'Victinl Law iFirms concerning'iMaA transactions In particular the defendants caused unauthorized access to the networks and servers of the Infiltrated Law Firms and obtained Inside Information regarding planned yet unannounced transactions HONG ZHENG and HUNG then purchased the stock of the targets of those transactions which was expected to and typically did increase in value after the transactions were ultimately announced 10 For example between in or about August 2014 and in or about late 2015 IAT HONG BO ZHENG and HUNG the defendants through the Trading Accounts purchased shares of at least five companies prior to public announcements that those companies woulti be acquired After the corporate acquisitions manna announced IKMKL ZHENG anni HUNG sxiui their recently acquired shares of the target companies resulting in profits to HONG ZHENG and HUNG in excess of $4 million In each case one Hi the Infiltrated Law Firms represented either the target or a contemplated or actual acquirer in the transaction 11 In addition tx obtaining' and trading CH1 Inside Information concerning transactions exfiltrated from the networks and servers of the Infiltrated Law Firms IAT HONG BO ZHENG and CHIN HUNG the defendants repeatedly attempted to cause unauthorized access to the networks and servers of the Targeted Law Firms using means and methods similar to those used to successfully' access the Infiltrated Law Firms For example between March and September 2015 HONG ZHENG and HUNG attempted to cause unauthorized access to the networks and servers of the Targeted Law Firms on more than 100 000 occasions The Law Firmwl Hack and Insider Trading 12 Beginning at least in or about July 2014 IAT HONG BO ZHENG and CHIN HUNG the defendants obtained Inside Information frtm1 Law Firmwl 11 furtherance c f their scheme to enrich themselves by obtaining and trading on the basis of Inside Information exfiltrated from the networks and servers of the Victim Law Firms 13 On or about July 21 2014 B0 ZHENG the defendant emailed IAT HONG the defendant a Chinese language email titled Law Firm l analysis template with an attached spreadsheet The spreadsheet contained historical data regarding two public transactions for which Partnerwl provided advisory services in approximately 2012 Specifically the spreadsheet contained financial information concerning the details and success of the deals including the buyers and sellers the change in stock price after the deal the name of Partner 1 as the Person in Charge and information pertaining to Law Firm 1 s Involvement in each transaction 14 On or about July 29 2014 IAT HONG the defendant emailed CHIN HUNG the defendant a document titled New York docx The document listed the names of eleven partners at Firm-l including Partnerml Ten of the eleven partners provided advisory services 15 Also beginning at least in or about duly 2014 IAT HONG BO ZHENG and CHIN HUNG the defendants without authorization caused one of Law Firmm1 s web servers the Law Firm 1 Web Server to be accessed by using the unlawfully obtained credentials of a Law Firmml employee HONG ZHENG and HUNG then caused malware to be installed on the Law Firm 1 Web Server The access to the Law Firm 1 Web Server allowed unauthorized access to at least one of Law Firm 1 s email servers the Law Firm 1 Email Server which contained the emails n3 Law Firm 1 employees including Partnerml The COntemplated Intermune Transaction 16 In or about June 2014 Law Firm 1 was retained by the Company in connection with the Contemplated Intermune Transaction 17 Between on or about August 1 2014 and on or about August 15 2014 Partner 1 was privy to Inside Information about the Contemplated Intermune Transaction For example on more than one occasion between August 7 2014 and August 15 2014 Partner 1 obtained information including via email about details of the proposed transaction such as the price per share the Company was considering offering to acquire Intermune 18 Between at least as early as August 1 2014 and on or about August 9 2014 IAT HONG BO ZHENG and CHIN HUNG the defendants caused more than 40 gigabytes of confidential data to be exfiltrated from the Law Firmwl Email Server over the course of at least eight days 19 On or about August 13 2014 beginning at approximately 10 46 a m EST and continuing through approximately 1 06 p m EST during the time Law Firmwl was advising the Company on the Contemplated Intermune Transaction and after IAT HONG BO ZHENG and CHIN HUNG the defendants had obtained access to confidential email data maintained at Law Firm 1 KONG used the Inside Information to purchase 7 500 shares of lntermune stock for the Trading Accounts These trades were executed on exchange platforms in the United States including through exchanges based in the Southern District of New York Prior to that date none of the Trading Accounts had purchased any shares of Intermune 20 At approximately 1 13 p m EST on August 13 2014 a financial newspaper published an article reporting that Intermune was working with financial advisors to evaluate strategic options the August 13 Newspaper Article As a result of the August 13 Newspaper Article lntermune s share price increased by approximately $5 per share or approximately nine percent from Intermune s share price on August 13 2014 just prior to the publication of the August 13 Newspaper Article As a result of the defendants purchases of Intermune which were based on Inside Information stolen from Law Firm l the value of the defendants' shares of lntermune significantly increased Later that day IAT HONG the defendant purchased an additional 1 000 shares of Intermune stock in the Trading Accounts 21 Following the publication of the August 13 Newspaper Article IAT HONG BO ZHENG and CHIN HUNG the defendants exploited their continued unauthorized access to email data belonging tx Law iFirm l inf exfiltrating approximately' 10 gigabytes of confidential data from the Law Firm l Email Server on or about August 16 and 17 2014 22 To further effectuate the insider trading scheme between on or about August 18 2014 and on or about August 21 2014 HONG and BO ZHENG the defendants used the Inside Information to purchase additional Intermune shares in the Trading Accounts on at least five occasions totaling an additional 9 500 shares of Intermune stock 23 The Contemplated Intermune Transaction was never consummated or announced Instead before the market opened on Monday August 25 2014 Intermune announced that it had reached an agreement to be acquired by Roche AG a German company On that day Intermune s share price increased by approximately $19 per share or approximately 40 percent from the closing price on Friday August 22 2014 the last prior trading day That same day August 25 2014 IAT HONG and BO ZHENG the defendants sold the 18 000 shares that they had begun acquiring twelve days earlier for profits of approximately $380 000 The Intel Altera Transaction 24 In or about January 2015 Law Firm 1 was retained by Intel in connection with the IntelmAltera Transaction 25 Between in or about January 2015 and on or about March 27 2015 Partner 1 was privy to Inside Information about the IntelmAltera Transaction On several'occasions during this 10 time period Partner 1 obtained confidential information about the contemplated transaction via email For example on or about January 29 2015 Partner 1 received an email with deal terms including the proposed price per share to purchase Altera 26 Between at least as early as on or about January 13 2015 in the same month that Law Firm 1 was retained by Intel to advise on the Intel Altera Transaction and on or about February 10 2015 IAT HONG BO ZHENG and CHIN HUNG the defendants caused approximately 2 8 gigabytes of confidential data to be exfiltrated from the Law Firm 1 Email Server over the course of at least two days 27 Beginning on or about February 17 2015 during the time Law Firmmi was advising Intel and after IAT HONG BO ZHENG and CHIN HUNG the defendants had obtained access to confidential email data maintained at Law Firm-1 the defendants used the Inside Information tx purchase shares n3 Altera stock ijl the Trading Accounts Prior to that date none of the Trading Accounts had purchased any shares of Altera 28 To further effectuate their insider trading scheme between on or about February 17 2015 and on or about March 27 2015 one moms of TAT HUNG BO ZHENG and CHIN HUNG the defendants used tins Inside Information ix purchase additional shares If Altera stock 3J1 the Trading Accounts n1 at least 26 ll occasions ultimately purchasing more than 210 000 shares These trades were executed on exchange platforms in the United States including through exchanges based in the Southern District of New York 29 On or about March 27 2015 a financial newspaper published an article reporting on confidential merger discussions between Intel and Altera the March 27 Newspaper Article Following t ma publication n3 the article CH1 Marsh 27 2015 Altera s share price increased $9 per share or approximately 26 percent from Altera s share price on March 27 2015 just prior to the March 27 Newspaper Article 30 On or about April 10 2015 and April 13 2015 TAT HONG BO ZHENG and CHEN HUNG the defendants sold all of their shares of Altera stock for a profit of approximately $1 4 million 31 Ultimately on or about June 2 2015 the Intel Altera transaction was publicly announced The Law Firmw2 Hack and Insider Trading 32 Beginning at least in or about April 2015 IAT HONG BO ZHENG and CHIN HUNG the defendants obtained Inside Information from Law Firm 2 in furtherance of their scheme to enrich themselves by obtaining and trading on the basis of Inside Information exfiltrated from the networks and servers of the Victim Law Firms l2 33 For example in or about December 2014 Law Firm 2 was retained by Pitney Bowes in connection with the Pitney Bowesw Borderfree Transaction As noted Partnerj2 worked on this transaction for Law Firm 2 34 Beginning at least on or about April 7 2015 after Law Firm 2 had been retained to advise Pitney Bowes IAT HONG BO ZHENG and CHIN HUNG the defendants without authorization caused one of Law Firm 2 s web servers the Law Firm-2 Web Server located in New York New York to be accessed by using the unlawfully obtained credentials of 51 Law Bdrm 2 employee HONG ZHENG and HUNG then caused malware to be installed on the Law Firm 2 Web Server The malware on the Law Firm 2 Web Server allowed unauthorized access to at least one of Law Firm 2 s email servers also located in New York New York the Law Firmn2 Email Server which contained the emaihs of Law Eirm 2 attorneys including Partnerw2 35 Between on or about April 8 2015 and on or about July 31 2015 IAT HONG BO ZHENG and CHIN HUNG the defendants caused approximately' 7 gigabytes of confidential data to be exfiltrated from the Law Firm 2 Email Server over the course of at least six days 36 Beginning on or about April 29 2015 hours after IAT HUNG BO ZHENG and CHIN HUNG the defendants had caused data 13 from the Law Firm 2 Email Server to be exfiltrated HONG and HUNG used the Inside Information to begin purchasing shares of Borderfree stock for the Trading Accounts Prior to that date none of the Trading Accounts had purchased any shares of Borderfree stock To further effectuate their insider trading scheme betneen on or about April 29 2015 and on or about May 5 2015 HONG and HUNG used the Inside Information to purchase additional shares n3 Borderfree the Trading Encounts M1 at least five occasions These trades were executed on exchange platforms in the United States including through exchanges based in the Southern District of New York For example a On or about April 29 2015 the same day on which the defendants had caused data to be exfiltrated from the Law Firm 2 Email Server HONG and HUNG purchased 18 000 shares of Borderfree representing 25 percent of the daily trading volume in Borderfree stock b On or about May 5 2015 KONG and HUNG purchased 25 000 shares of Borderfree representing nine percent of the daily trading volume in Borderfree stock 37 In total IAT HONG and CHIN HUNG the defendants used the Inside Information to purchase 113 000 shares of Borderfree 38 On or about May 6 2015 the Pitney Bowes l4 Borderfree Transaction became public On that day Borderfree s stock price increased by approximately' $7 per Share or 105 percent from the previous day s closing price On or about May 18 2015 HONG enui CHIKI HUNG the defendants sold their Borderfree shares earning a profit of approximately $841 000 Additional Insider Trading and Attempted Insider Trading Based on Inside Information Hacked from the Infiltrated Law Firms 39 111 addition trading n1 Inside Zlnformation hi connection with the Contemplated Intermune Transaction the Intel Altera Transaction and the Pitney Bowes Borderfree Transaction detailed above IAT HONG BO ZHENG and CHIN HUNG the defendants carried out their scheme to enrich themselves by obtaining and trading on the basis of Inside Information exfiltrated from the networks and servers of the Infiltrated Law Firms concerning at least ten additional transactions including certain transactions that were contemplated but never consummated Several of these transactions involved Partner 1 or Partner 2 In total as a result of trading on Inside Information the defendants enriched themselves by at least $4 million Attempts to Hack the Targeted Law Firms 40 To further support their scheme to obtain and trade on Inside Information exfiltrated from the networks and servers of the Victim Law Firms between at least 11 or about March and September 2015 IAT KONG BO ZHENG and CHIN HUNG the defendants 15 repeatedly attempted to cause unauthorized access to the networks and servers of the Targeted Law Firms using means and methods similar to those used to successfully access the Infiltrated Law Firms For example a On or about March 31 2015 HONG ZHENG and HUNG attempted to cause unauthorized access to the network and servers of Law FirmeB through a remote access website maintained by Law Firm 3 b On or about April 3 2015 HONG ZHENG and HUNG attempted to cause unauthorized access to the network and servers of Law Eirm 4 using the name and email address of an internetworking supervisor employed by Law Firm 4 c On or about April 3 2015 HONG ZHENG and HUNG attempted to cause unauthorized access to the network and servers of Law FirmMS through a remote access website maintained by Law Firm 5 d On or about April 3 2015 KONG ZHENG and HUNG attempted to cause unauthorized access to an email server maintained on the network of Law Firm 6 through a remote access website maintained by Law Firm 6 e Between on or about April 3 2015 and on or about April EL 2015 HUNG ZHENG enni HUNG attempted 11 cause unauthorized access to the network and servers of Law Firm more 16 repeatedly attempted to cause unauthorized access to the networks and servers of the Targeted Law Firms using means and methods similar to those used to successfully access the infiltrated Law Firms For example a On or about March 31 2015 HONG ZHENG and HUNG attempted tx cause unauthorized access ix the network and servers of Law Firm 3 b On or about April 3 2015 HONG ZHENG and HUNG attempted to cause unauthorized access to the network and servers c f Law Bdrm-4 using the name and email address of an internetworking supervisor employed by Law Firm 4 c On or about April 3 2015 HONG ZHENG and HUNG attempted tx cause unauthorized access tx the network and servers of Law Firm 5 through a remote access website maintained by Law Firm 5 d On or about April 3 2015 HONG ZHENG and HUNG attempted to cause unauthorized access to an email server maintained on the network of Law Firmw6 through a remote access website maintained by Law Firmus e Between on or about April 3 2015 and on or about April 6 2015 HONG ZHENG anui attempted 1x3 cause unauthorized access to the network and servers of Law Firmm7 more 16 than five thousand times Hacking of the Robotics Company Victims 41 Also between at least April 2014 and late 2015 in addition to their efforts to hack the Victim Law Firms networks and servers IAT HONG BO ZHENG and CHIN HUNG the defendants also caused confidential information to be exfiltrated from the networks and servers of the Robotics Company Victims using substantially similar means and methods of erfiltration as were used to access and attempt to access and exfiltrate information from the Victim Law Firms Specifically certain of the same servers that were used to carry out the hacks of the Robotics Company Victims also were used to carry out the hacks and attempted hacks of the Victim Law Firms Among other confidential information HONG ZHENG and HUNG obtained confidential and proprietary information concerning the technology and design of consumer robotic products including detailed and confidential design schematics the Proprietary Schematics Following these exfiltrations from the Robotics Company Victims HONG ZHENG and HUNG exchanged emails containing certain of the 'confidential information they had caused to be exfiltrated from the Robotics Company Victims including the Proprietary Schematics l7 Statutory Allegations The Conspiracy 42 Fran at least in or about April 2014 up to and 'including at least in or about late 2015 in the Southern District of New York and elsewhere IAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown willfully and knowingly did combine conspire confederate and agree together and with each other to commit an offense against the United States to wit securities fraud in viOlation of Title 15 United States Code Sections 78j b and 78ff and Title 17 Code of Federal Regulations Section 240 10b 5 Object of the Conspiracy 43 It was a part and an object of the conspiracy that IAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown willfully and knowingly directly and indirectly by the use of the means and instrumentalities of interstate commerce and of the mails and of facilities of national securities exchanges would and did use and employ in connection with the purchase and sale of securities manipulative and deceptive devices and contrivances in violation of Title 17 Code of Federal Regulations Section 240 10b 5 by employing devices schemes and artifices to defraud making untrue statements of material fact and omitting to state material facts necessary in order to l8 make the statements made in the light of the circumstances under which they were made not misleading and engaging in acts practices and'courses of business which operated and would operate as a fraud and deceit upon any person all in violation of Title 15 United States Code Sections 78j b and 78ff and Title 17 Code of Federal Regulations Section 240 10bm5 Means and Methods of the Conspiracy 44 Among the means and methods by which IAT HONG BO ZHENG and CHIN HUNG the defendants and their codconspirators would and did carry out the conspiracy were the following a HONG ZHENG enui HUNG used cn caused ix be used deceptive means to gain and attempt to gain unauthorized access to the networks and servers belonging to the Victim Law Firms in order to obtain Inside Information including information regarding nonwpublic transactions b The deceptive means used or caused to be used or attempted to be used or caused to be used by HONG ZHENG and HUNG included obtaining and using security credentials including nsernames and passwords of certain employees who administered the networks and servers of the Victim Law Firms the Administrative Credentials c HONG ZHENG and HUNG while in possession of Inside Information unlawfully obtained from the Infiltrated Law 19 Firms purchased securities based on the Inside Information and thereby received illegal profits Overt Acts 45 In furtherance of the conspiracy and to effect the illegal object thereof IAT HONG BO ZHENG and CHIN HUNG the defendants and their co conspirators committed the following overt acts among others in the Southern District of New York and elsewhere a On or about July 29 2014 HONG emailed HUNG a document listing the names of eleven partners at Law Firm l b On or about January 13 2015 HONG ZHENG and HUNG caused data to be exfiltrated from email inboxes maintained on the Law Firm 1 E mail Server c Between on or about April 3 2015 and on or about April 6 2015 HONG ZHENG and HUNG caused more than five thousand attempted infiltrations of Law Firm 7 d On or about April 29 2015 HONG ZHENG and HUNG caused data to be exfiltrated from email inboxes maintained on the Law Firm 2 E mail Server which was located in New York New York e On about April 29 2015 HUNG and HUNG purchased 18 000 shares of Borderfree f On or about March 3 2015 HONG ZHENG and 20 HUNG purchased 48 544 shares of Altera Title 18 United States Code Section 371 COUNTS TWO THROUGH EEGHT Insider Trading The Grand Jury further charges 46 The allegations set forth in paragraphs 1 through 41 and 44 through 45 are incorporated by reference as if set forth fully herein 47 On about t ua dates set ikn i below ll the Southern District of New York and elsewhere EAT HONG BO ZHENG _and HUNG the defendants and others known and 'unknown willfully and knowingly directly and indirectly by the use of the means and instrumentalities of interstate commerce the mails and the facilities of national securities exchanges in connection with the purchase and sale of securities used and employed manipulative and deceptive devices and contrivances in violation of Title 17 Code of Federal Regulations Section 240 10bw5 by employing devices schemes and artifices ix defraud making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made in the light of the circumstances under which they were made not misleading and engaging in acts practices and courses of business which operated and would operate as a fraud and deceit upon any person to wit HONG ZHENG and HUNG executed and caused 21 others to execute the securities transactions listed below based on material non public information obtained by deceptively gaining access into or causing unauthorized access into the Infiltrated Law Firms networks and servers Count Defendant Dates Stock Transaction rchase of 8 13 2014 Two HUNG Intermune 16 200 shares of 8 21 2014 common stock Purchase of Three Intermune 1 800 shares of 8 19 2014 common stock PurchaSe of 2 Four KONG 2 17 0 5 Altera 82 044 shares of 3 26 2015 common stock Purchase of Five HUNG 2 17 2015 Altera 69 700 shares of 3 27 2015 common stock Purchase of Six ZHENG 2 25 2015 Altera 61 000 shares of 3 27 2015 common stock Purchase of Seven HONG 4 29 2015- Borderfree 56 000 shares of 5 5 2015 common stock Purchase of 4 29 201 Eight HUNG 5 Borderfree 57 000 shares of 5 5 2015 common stock Title 15 United States Code Sections 78j b and 78ft Title 17 Code of Federal Regulations Section 240 10b 5 and Title 18 United States Code Section 2 COUNT NINE Conspiracy to Commit Wire Fraud The Grand Jury further charges 48 The allegations set forth in paragraphs 1 through 41 and 44 through 45 are incorporated by reference as if set forth fully herein 22 49 From at least in or about April 2014 up to and including at least in or about late 2015 in the Southern District of New York and elsewhere TAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown willfully and knowingly combined conspired confederated and agreed together and with each other to commit wire fraud in violation of Title 18 United States Code Section 1343 50 It was a part and an object of the conspiracy that IAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown willfully and knowingly having devised and intending to devise a scheme and artifice to defraud and for obtaining money and property by means of false and fraudulent pretenses representations and promises would and did transmit and cause to be transmitted by means of wire radio and television communication in interstate and foreign commerce writings signs signals pictures and sounds for the purpose of executing such scheme and artifice in violation of Title 18 United States Code Section 1343 Title 18 United States Code Section 1349 COUNT TEN Wire Fraud The Grand Jury further charges 51 The allegations set forth in paragraphs 1 through 41 and 44 through 45 are incorporated by reference as if set 23 forth fully herein 52 From at least in or about April 2014 up to and including at least in or about late 2015 in the Southern District of New York and elsewhere IAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown willfully and knowingly having devised and intending to devise a scheme and artifice to defraud and for obtaining money and property by means of false and fraudulent pretenses representations and promises and attempting to do so transmitted and caused to be transmitted by means of wire radio and television communication in interstate and foreign commerce writings signs signals pictures and sounds for the purpose of executing such scheme and artifice to wit HUNG ZHENG and HUNG engaged in a scheme to steal and convert to their own use confidential information maintained by the Victim Law Firms in order to execute and cause others to execute securities transactions and ill the course n3 executing' such scheme caused among other foreign and interstate wires electronic communications to be sent to servers located in the Southern District of New York including servers belonging to Law Firm 2 Title 18 United States Code Sections 1343 and 2 COUNT ELEVEN Conspiracy to Commit Computer Intrusion The Grand Jury further charges A 44 53 The allegations set forth in paragraphs 1 through 41 and 44 through 45 are incorporated by reference as if set forth fully herein 54 From at least in or about April 2014 up to and including at least in or about late 2015 in the Southern District of New York and elsewhere TAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown willfully and knowingly combined conspired confederated and agreed together and with each other to commit offenses against the United States to wit gaining unauthorized access to computers in violation of Title 18 United States Code Sections 1030 a 2 C and 1030 a 5 A 55 It was a part and an object of the conspiracy that TAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown knowingly and willfully would and did intentionally access a computer without authorization and exceed authorized access and thereby obtain information from a protected computer for purposes of commercial advantage and private financial gain and in furtherance of a criminal act in violation of the laws of the United States to wit the securities fraud and wire fraud crimes charged in Counts One through Ten of this Indictment and the value of the information obtained was greater than $5 000 in violation of Title 18 United States Code Sections 1030 a 2 C and lO30 c 2 B 25 56 It was a further part and an object of the conspiracy that IAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown knowingly and willfully would and did cause the transmission of a program information code and command and as a result of such conduct would and did intentionally cause damage without authorization to a protected computer and would and did cause loss to one and more persons during any one year period aggregating at least $5 000 in value in violation of Title 18 United States Code Sections 1030 a 5 A and Overt Acts 57 In furtherance of the conspiracy and to effect the illegal objects thereof IAT HUNG BO ZHENG and CHIN HUNG the defendants and their coconspirators committed the following overt acts among others in the Southern District of INeW York and elsewhere a On or about July 21 2014 ZHENG emailed HONG a foreignwlanguage email titled Law Firm I analysis template with an attached spreadsheet that contained historical data regarding two public transactions in which Partner 1 provided advisory services in approximately 2012 b On or about July 29 2014 HONG emailed HUNG a document listing the names of eleven partners at Law Firmwl 26 c On or about January 12 2015 HONG ZHENG and sent and received emails containing certain Proprietary Schematics exfiltrated from Robotics Company Victimml d On or about January 13 2015 HONG ZHENG and HUNG caused data to be exfiltrated from email inboxes maintained on the Law Firm-1 Emmail Server e Between on or about April 3 2015 and on or about April 6 2015 HONG ZHENG and HUNG caused more than five thousand attempted infiltrations of Law Firm 7 E On or about March 23 2015 HONG ZHENG and HUNG caused approximately 26 gigabytes of confidential data to be exfiltrated from Robotics Company Victimml and transferred to a particular external server the Server g On or about April 1 2015 HONG ZHENG and HUNG caused the Server to access a webpage belonging to Law Firm 1 h On or about April 7 2015 HONG ZHENG and HUNG caused malware from the Server to be installed on servers located in New York New York belonging to Law Firm 2 1 On or about April 29 2015 HUNG ZHENG and HUNG caused data to be exfiltrated from email inboxes maintained on the Law Firm 2 E mail Server located in New York New York j X1 or about April 29 2015 HONG enni HUNG 27 purchased 18 000 shares of Borderfree k On or about March 3 2015 HONG ZHENG and HUNG purchased 48 544 shares of Altera Title 18 United States Code Section 371 COUNT TWELVE Computer Intrusion Unlawful Access Law Firm 2 The Grand Jury further charges 58 The allegations set forth in paragraphs 1 through 41 44 through 45 and 57 are incorporated by reference as if set forth fully herein 59 at least in or about April 2015 up to and including at least in or about late 2015 in the Southern District of New York and elsewhere EAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown knowingly and willfully intentionally accessed a computer without authorization and exceeded authorized access and thereby obtained information from a protected computer for purposes of commercial advantage and private financial gain and in furtherance of a criminal act in violation of the laws of the United States to wit the securities and wire fraud crimes charged in Counts One through Ten of this Indictment and the value of the information obtained was greater than $5 000 to wit HONG ZHENG and HUNG unlawfully accessed and caused others to unlawfully access networks and servers located in New 'York New 'York_ belonging to Firm 2 to obtain Inside 28 Information that HONG ZHENG and HUNG used to purchase shares of publicly traded companies Title 18 United States Code Sections 1030 a 2 C 1030 c 2 B and 2 COUNT THIRTEEN Computer Intrusion Intentional Damage Law Firm 2 The Grand Jury further charges 60 The allegations set forth in paragraphs 1 through 41 44 through 45 and 57 are incorporated by reference as if set forth fully herein 61 From at least in or about April 2015 up to and including at least in or about late 2015 in the Southern District of New York and elsewhere IAT HONG BO ZHENG and CHIN HUNG the defendants and others known and unknown knowingly and willfully caused the transmission of 51 program information code and command and as a result of such conduct intentionally caused damage without authorization to a protected computer and caused loss to one and more persons during any one year period aggregating at least $5 000 in value to wit HONG ZHENG and HUNG unlawfully installed and caused others to install malware on servers located in New York New York belonging to Law Firmw2 to access and obtain Inside Information that SONG HUNG used ix purchase shares of pmblicly traded companies and thereby impaired the integrity of Law Firm 2 s data systems and information 29 Title 18 United States Code 1030 c 4 B and 2 FORFEITURE ALLEGATIONS 62 As a result of committing one or more of the foregoing securities fraud and wire fraud offenses alleged in Counts One through Ten of this Indictment IAT HUNG BO ZHENG and CHIN HUNG the defendants shall forfeit tx the United States pursuant to Title 18 United States Code Section 981 a 1 C and Title 28 United States Code Section 246i all property real and personal that constitutes or is derived from proceeds traceable to the commission such offenses 63 As a result of committing' one or more of the foregoing computer intrusion offenses alleged ill Counts Eleven through Thirteen of this Indictment IAT HUNG BO ZHENG and CHIN HUNG the defendants shall forfeit to the United States pursuant to Title 18 United States Code Section any property constituting or rderived from proceeds obtained directly' or indirectly as a result of one or more of the offenses Substitute Assets Provision 64 If any of the above described forfeitable property as a result of any act or omission of the defendants cannot be located upon the exercise of due diligence has been transferred or sold to or deposited with a third person Lo 3 has been placed beyond the jurisdiction of the Court has been substantially diminished in value or has been commingled with other property which cannot be subdivided without difficulty it is the intent of the United States pursuant to Title 18 United States Code Sections 981 a 1 C and 982 b and Title 21 United States Code Section 853 p to seek forfeiture of any other property of the defendants up to the value of the above forfeitable property including but not limited to all of the property set forth above Title 18 United States Code Sections 981 and 982 Title 21 United States Code Section 853 and Title 28 United States Code Section 2461 254% PREET BHARARA United States Attorney FOREPERS 31 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA v IAT HONG BO ZHENG and CHIN HUNG Defendants SEALED INDICTMENT SI 16 Cr 360 15 U S C 78j b 78ff 17 C F R 240 10b 5 18 U S C 2 371 1030 a 2 C 1030 a 5 A lO30 c 4 B 1343 1349 PREET BHARARA United States Attorney