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The Great Brain Robbery

Economic espionage sponsored by the Chinese government is costing U.S. corporations hundreds of billions of dollars and more than two million jobs

  • 2016, Jan 17
  • CORRESPONDENT, Lesley Stahl
    Source: 60 Minutes

Editor’s Note: The author of the original article “A Harsh Winter for Sinovel and China’s Wind Industry,” which was later attached to the phishing email in this video, wishes it known that he was not involved in a cyberattack against American Superconductor.


The following is a script from “The Great Brain Robbery” which aired on Jan. 17, 2016. Lesley Stahl is the correspondent. Rich Bonin, producer.

If spying is the world’s second oldest profession, the government of China has given it a new, modern-day twist, enlisting an army of spies not to steal military secrets but the trade secrets and intellectual property of American companies. It’s being called “the great brain robbery of America.”

The Justice Department says that the scale of China’s corporate espionage is so vast it constitutes a national security emergency, with China targeting virtually every sector of the U.S. economy, and costing American companies hundreds of billions of dollars in losses — and more than two million jobs.

John Carlin: They’re targeting our private companies. And it’s not a fair fight. A private company can’t compete against the resources of the second largest economy in the world.

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Lesley Stahl and John Carlin, assistant attorney general for National Security  CBS NEWS
Shidonna Raven Garden and Cook

John Carlin is the assistant attorney general for National Security with responsibility for counterterrorism, cyberattacks and increasingly economic espionage.

“A private company can’t compete against the resources of the second largest economy in the world.”

John Carlin: This is a serious threat to our national security. I mean, our economy depends on the ability to innovate. And if there’s a dedicated nation state who’s using its intelligence apparatus to steal day in and day out what we’re trying to develop, that poses a serious threat to our country.

Lesley Stahl: What is their ultimate goal, the Chinese government’s ultimate goal?

John Carlin: They want to develop certain segments of industry and instead of trying to out-innovate, out-research, out-develop, they’re choosing to do it through theft.

All you have to do, he says, is look at the economic plans published periodically by the Chinese Politburo. They are, according to this recent report by the technology research firm INVNT/IP, in effect, blueprints of what industries and what companies will be targeted for theft.

John Carlin: We see them put out the strategic plan, and then we see actions follow that plan. We see intrusion after intrusion on U.S. companies.

Lesley Stahl: Do you have a number of U.S. companies that have been hit?

John Carlin: It’s thousands of actually companies have been hit.

Lesley Stahl: Thousands of U.S. companies?

John Carlin: Of U.S. companies.

But getting CEOs from those companies to talk is nearly impossible because most of them still have business in China and don’t want to be cut out of its huge market. Daniel McGahn, the head of American Superconductor, is an exception. His firm spent years and millions of dollars developing advanced computer software for wind turbines that McGahn says China looted, nearly putting him out of business. He’s talking because he wants to fight back.

Daniel McGahn: I’m personally never gonna give this up. Too many lives were affected, too many families were damaged through this. We can never give up on this.

Lesley Stahl: You had to fire 600 people.

Daniel McGahn: Yes.

Lesley Stahl: Out of how many jobs?

Daniel McGahn: At the time we were almost 900.

Lesley Stahl: So how much did you lose in share value?

Daniel McGahn: Total loss is well over a billion dollars.

Today, his factory floor is largely silent, a shadow of this once thriving company.

Daniel McGahn: I think part of the strategy in all this was to kill us. So–

Lesley Stahl: They set out to kill you.

Daniel McGahn: To kill the company.

How can he be so sure? Well, his story begins when China passed a clean energy law in 2005, calling for the creation of mega-wind farms throughout the country.

The law made China the hottest wind power market in the world. So McGahn partnered with a small Chinese firm called Sinovel which was partly owned by the government. Sinovel made the skeletons of the turbines, and his company, American Superconductor, the sophisticated gadgetry and computer code to run them.

Lesley Stahl: They actually built the turbines.

Daniel McGahn: They make the turbine, we make the controls.

Lesley Stahl: And did they make these turbines with your brains in them for the entire country of China?

Daniel McGahn: Yes.

When he went into business there, China was already notorious for poaching American intellectual property. So he says he did everything he could think of to protect his technology from being stolen.

Daniel McGahn: We made sure that any software or any pieces of the code were restricted and used, were able to be accessed, only by a few people within the company.

Lesley Stahl: Once they got everything over there couldn’t they reverse-engineer it?

Daniel McGahn: We believe that’s what they tried to do. And what they learned was this encrypted protocol was in the way. They didn’t quite understand how it worked. And they couldn’t reverse-engineer it

Lesley Stahl: Everybody knows if it’s on the Internet, some brilliant hacker can get at it.

Daniel McGahn: It wasn’t accessible through the Internet.

Lesley Stahl: You kept it off the Internet?

Daniel McGahn: Yes.

Lesley Stahl: It sounds like you built a little fortress around your, your precious codes.

Daniel McGahn: We certainly tried.

Initially, business boomed in China for American Superconductor, with sales skyrocketing from $50 million-a-year to nearly half a billion.

Daniel McGahn: We were going through exponential growth. It’s what every technology company wants to get to, is this high level of growth. We were there.

Then, in 2011, his engineers were testing the next-generation software in China on Sinovel’s turbines. The software had been programmed to shut down after the test but the blades didn’t shut down. They never stopped spinning.

Daniel McGahn: So we said why. We didn’t really know. So the team looked at the turbine and saw running on our hardware a version of software that had not been released yet.

Lesley Stahl: That’s when you realized.

Daniel McGahn: Realized something’s wrong. So then we had to figure out how did, how could this have happened?

To find out, he launched an internal investigation and narrowed it down to this man, Dejan Karabasevic, an employee of American Superconductor based in Austria. He was one of the few people in the company with access to its proprietary software. He also spent a lot of time in China working with Sinovel.

Daniel McGahn: And what they did is they used Cold War-era spycraft to be able to turn him.

Lesley Stahl: They turned him.

Daniel McGahn: And make him into an agent for them.

Lesley Stahl: Do you know any specifics of what they offered him?

Daniel McGahn: They offered him women. They offered him an apartment. They offered him money. They offered him a new life.

The arrangement included a $1.7 million contract that was spelled out in emails and instant messages that McGahn’s investigation found on Dejan’s company computer. In this one, from him to a Sinovel executive, Dejan lays out the quid pro quo, “All girls need money. I need girls. Sinovel needs me.” Sinovel executives showered him with flattery and encouragement: you are the, quote, “best man, like superman.”

Lesley Stahl: And did they say, “We want the– the source codes”?

Daniel McGahn: It was almost like a grocery list. “Can you get us A? Can you get us B? Can you get us C?”

Lesley Stahl: I’ve seen one of the messages, the text message, in which Dejan says, “I will send the full code of course.”

Daniel McGahn: That’s the full code for operating their wind turbine.

Dejan eventually confessed to authorities in Austria and spent a year in jail. Not surprisingly, the Chinese authorities refused to investigate, so Daniel McGahn filed suit in civil court — in China, suing Sinovel for $1.2 billion. But he suspected that China was still spying on his company, and that Beijing had switched from Cold War to cutting-edge espionage.

Lesley Stahl: So why were you brought in?

Dmitri Alperovitch: We were brought in because the attacks now continued in cyberspace.

McGahn hired Dmitri Alperovitch and George Kurtz, cofounders of a computer security firm called CrowdStrike, to investigate. They zeroed in on a suspicious email purportedly sent by a board member to 13 people in the company.

Dmitri Alperovitch: It had an attachment. A few people clicked on an attachment and that let the Chinese in. It was sort of like opening the front door.

Lesley Stahl: What do you mean they were in?

Dmitri Alperovitch: Once they clicked on that email and they opened up the attachment, malicious codes started executing on their machine and it beaconed out to the Chinese and basically let them right in to the company.

From that point they can hop to any machine and take any file that they wanted from that network.

By analyzing who the email was sent to, they were able to infer that the Chinese were after more than just computer codes.

Dmitri Alperovitch: They also wanted to figure out the legal strategy of the company now that they were suing Sinovel for $1.2 billion.

George Kurtz: Whenever there’s a big lawsuit we’ll see the Chinese government actually break into that company, break into the legal department and figure out what’s going on behind the scenes so they can better deal with that lawsuit.

Lesley Stahl: Now did you know at that time who had perpetrated the hack?

Dmitri Alperovitch: We were able to determine with great confidence that this was Unit 61398, part of the Chinese military that was responsible for this attack.

Unit 61398 is believed to be based in this nondescript building in Shanghai. It’s part of the People’s Liberation Army. And it’s charged with spying on North American corporations.

Dmitri Alperovitch: We estimate that there are several thousand people in this unit alone, this one unit.

Lesley Stahl: How active is this unit?

George Kurtz: It’s one of the most prolific groups that we’ve tracked coming out of the Chinese government. It’s unbelievable what they’ve been able to steal over the last decade.

Lesley Stahl: Like what? Give us a sense of the scope.

George Kurtz: Every industry, engineering documents, manufacturing processes, chip designs, telecommunications, pharmaceutical, you name it it’s been stolen.

In 2014, five military officers in the unit were criminally charged with economic espionage by John Carlin’s National Security division at the Justice Department.

John Carlin: These were officers in uniform and their day job was to get up, go to work, log on, and steal from a range of American companies. And you would watch, as we put in an exhibit in the case, the activity would spike around 9:00 in the morning. They get into work, turn on their computers, and start hacking into American companies. Then it calms down a little bit from about 12:00 to 1:00 where they take a lunch break.

Lesley Stahl: God.

John Carlin: And then it continues until the end of the day, 5 or 6 o’clock–

Lesley Stahl: And then they go home.

John Carlin: –at night. And then they go home, and it decreases ’till the next morning.

China has always denied that it conducts or condones economic espionage.

But in September during a visit to Washington, President Xi Jinping pledged for the first time that China would not engage or knowingly support cybertheft of intellectual property for commercial gain.

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Chinese President Xi Jinping and President Barack Obama  CBS NEWS
Shidonna Raven Garden and Cook

Dmitri Alperovitch: It’s the first time ever they’ve admitted that economic espionage should be off-limits and that they will not conduct it. Unfortunately, what we saw is that the very next day, the day after they were in the Rose Garden shaking hands, the intrusions continued.

Lesley Stahl: Wait, wait, wait, stop. The hacking has not stopped.

Dmitri Alperovitch: The hacking has not stopped. But one of the things that has happened is that the military units that have been responsible for these hacks have actually had their mission taken away from them and it was given to the Ministry of State Security, their version of the CIA. So, in effect, they said, “You guys are incompetent. You got caught. We’ll give it to the guys that know better.”

The director of the National Counterintelligence and Security Center confirms that there is no evidence China has curtailed its economic espionage.

Lesley Stahl: There’s a lotta criticism out there among businessmen, and some people in the government, who complain that President Obama wags his finger at the Chinese but he doesn’t do anything.

John Carlin: Well I think it’s important that we do take, that we do take action. If we don’t do things like bring the indictment then we would be a paper, a paper tiger.

Lesley Stahl: You know, it feels like a pinprick, your indictment. They’re never going to be extradited. Is there talk of putting any sanctions on the way we did with Russia when they went into the Ukraine?

John Carlin: The bottom line I think has to be that we continue to increase the costs until the behavior changes. If it doesn’t change, then we need to keep thinking of additional actions, whether they’re trade actions or sanctions that change the behavior.

The government of China declined our request for an interview, but sent us this comment: “China has long suffered from massive cyber attacks …(and) firmly opposes and combats all forms of cyber attacks in accordance with law… groundless speculation, accusation or hyping up is not helpful…”

In Massachusetts, Daniel McGahn is rebuilding with much of his business now shifted to India. But adding insult to injury, Sinovel is now exporting wind turbines with his stolen technology, including one purchased by the state of Massachusetts using federal stimulus funds.

Daniel McGahn: So the U.S. government facilitated bringing the stolen goods into the U.S.

Lesley Stahl: And they’re here now?

Daniel McGahn: And they’re here now and it’s part of a–

Lesley Stahl: Up and running?

Daniel McGahn: Up and running.

Lesley Stahl: So Sinovel using the stolen source codes has sold wind turbines here in Massachusetts using to–

Daniel McGahn: –to the government of Massachusetts funded by the federal government of the United States of America.© 2016 CBS Interactive Inc. All Rights Reserved.

  • Lesley Stahl Lesley StahlOne of America’s most recognized and experienced broadcast journalists, Lesley Stahl has been a 60 Minutes correspondent since 1991.

What prevents China from hacking you and other individuals? How do you protect yourself against brain hacking? How do you prevent unauthorized brain chip implants that make brain hacking possible?

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BRAINJACKING: A NEW CYBERTHREAT TARGETING BRAIN IMPLANTS

CYBERSECURITYLATEST NEWS
by Preetipadma
August 28, 2020
Source: Analytics Insight

How can brain implants act as viable hotspots for hackers and cybercriminals?

Tech entrepreneur Elon Musk recently spoke about the possibility of a future where man has brain implants to various reasons ranging from augmenting his memory to listen to music. His Neuralink computer chip brain implant promises to demonstrate linking the body’s muscles with a machine, with the goal of treating neurological injuries and trauma. Though this tech sounds intriguing, it also raises some concerns. Experts believe that bio-implants are more likely to be prone to malicious cyber-attacks and become a new sport for hackers. This is the reason why the former Vice president of USA Dick Cheney had disabled wireless telemetry on his implantable cardioverter-defibrillator during his time in office for fear of political assassination. In 2016 Johnson and Johnson had warned patients that the company had discovered a security vulnerability in its insulin pumps, which might allow cybercriminals to alter their dosages remotely. As the human brain is the CPU of human bodies and thoughts-action process, scientists fear that attack and corruption of brain implants, also called brainjacking, can shoot up in the coming years.

As we live in a hyper-connected world, where every connected end-device is hackable, brainjacking poses a severe threat to people even before brain implants have hit the commercial markets. In 2016, a group of researchers, neurosurgeons, and doctors of philosophy from Oxford Functional Neurosurgery and several Oxford University departments published a paper exploring the issue of brainjacking. Even in 2018, scientists in Belgium have found that neurostimulator, a wireless brain implant can be hacked using off-the-shelf materials. They discovered that by utilizing remote exploitation, hackers could make voltage changes that can result in sensory denial, disability, or even death. These research studies highlight how cybercriminals can weaponize a simple brain implant for malicious purposes.

Laurie Pycroft, a doctoral candidate at Oxford’s Nuffield Department of Surgical Sciences, who headed the Oxford study, says that the most common type of brain implant is the deep brain stimulation (DBS) system. It consists of implanted electrodes positioned deep inside the brain connected to wires running under the skin, which carry signals from an implanted stimulator. This DBS can feed tiny, precision jolts of electricity into ones’ brain to control epilepsy or Parkinson’s tremors, dystonia (muscle spasms), and severe chronic pain. It has also been in trial for conditions like depression and Tourette’s syndrome. The neurosurgeons use it to map and target various regions of the brain using different stimulation parameters to have precise control over the human brain.

However, Pycroft fears that such precise control of the brain, coupled with the wireless control of stimulators, paves the way for hackers to attack the brain implants. For instance, an attacker could potentially induce behavioral changes like hypersexuality or pathological gambling, or even exert a limited form of control over the patient’s behavior by stimulating parts of the brain involved with reward learning to reinforce certain actions. The criminal perpetrators can cause blind attacks like cessation of stimulation, draining implant batteries, inducing tissue damage, and information theft, and targeted attacks like impairment of motor function, alteration of impulse control, modification of emotions or affect, induction of pain, and modulation of the reward system. Pycroft says although these hacks would be hard to achieve as they would require a high level of technological competence and the ability to monitor the victim, a sufficiently determined attacker could manage it.

While the scope of brain implants looks extremely promising, a single brainjacking incident can malign their reputation and raise questions of its safety and usability. This is why it is important to address this issue before the chips hit the mainstream market. Kaspersky has collaborated with the University of Oxford researchers on a project to map the potential threats and means of attack concerning these emerging technologies. Further, we need reinforced cybersecurity measures, which include encryption, identity and access management, patching, and updating the security of these brain implants to minimize instances of brainjacking. Clinicians and patients need to be educated on how to take precautions against these attacks.

You can read the research by the University of Oxford here.

You can read the research by Belgian researchers here.

How can you take precautions against brain implant hack attacks? How can you take precautions against unauthorized brain chip implants? What legislation would you like to see? Brain, body chips and DNA manipulation like Doly the clone is already here. What will you do now?

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FDA warns of medical device hack vulnerability

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Published: March 3, 2020 at 4:19 p.m. ET
By Wallace Witkowski
Source: Market Watch
Feature Photo Source: Unsplash, Ehimetalor Akhere Unuabona

Certain chips used in medical devices may be vulnerable to hackers through their Bluetooth functions, the Food and Drug Administration said Tuesday. The FDA said that SweynTooth, also known as Bluetooth Low Energy, used in medical devices such as pacemakers, stimulators, blood glucose monitors and insulin pumps, is vulnerable to hackers who can use the Bluetooth function to crash or compromise the device. Chip suppliers affected by the vulnerability include Texas Instruments Inc. TXN, -1.47%, NXP Semiconductors NV NXPI, -4.32%, Cypress Semiconductor Corp. cy, Dialog Semiconductors PLC DLG, +1.14%, Microchip Technology Inc. MCHP, -3.08%, STMicroelectronics NV STM, -0.95%, and Telink Semiconductor, the FDA said. “To date, the FDA is not aware of any confirmed adverse events related to these vulnerabilities,” the agency said in a statement. “However, software to exploit these vulnerabilities in certain situations is publicly available.”

About the Author

Wallace Witkowski

Wallace Witkowski came to MarketWatch from the Associated Press in New York, where he was a business reporter specializing in pharmaceutical companies. He previously reported for trade publications in covering the drug and medical-device industries back to 1998. Based in San Francisco, his focus is on U.S. equities. Follow Wally on Twitter at: @wmwitkowski.

How many medical devices include unauthorized experiments? Are medical professionals using technology to put people’s lives at risk and commit medical fraud? What should be done?

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Securing medical devices: Can a hacker break your heart?

Why are connected medical devices vulnerable to attack and how likely are they to get hacked? Here are five digital chinks in the armor.

Cameron Camp

Cameron Camp

Source: We Live Security

There’s virtually no realm in healthcare today that isn’t adopting more technology. From real-time wireless access to your own health parameters through smart watches and wearables to implanted devices inside your body, technology is coming. But can we secure it all?

Several years ago at Black Hat, we saw an insulin pump being hacked. And whether the lion’s share of software on that device was off the shelf, regulators say that the integrator is responsible for security up and down the stack, including the underlying operating system (OS), even if it that OS has a good security track record. In other words: Device manufacturers bear the responsibility, no matter what technology they use.

While that casts the burden of security on the manufacturer, it also steeply increases the cost and complexity of bringing a device to market. As a result, while market pressures lean on companies to produce devices quickly, the road ahead looks rocky and expensive. Also, it can unknowingly put patients on the defense.

And what about patches, who’s responsible for those? According to the FDA, the manufacturer does that too. With some medical devices expected to be around for many years, that’s a long time to pay to support gear in the field.

What makes the devices vulnerable and how likely are they to get hacked? As this week’s theme of Cybersecurity Awareness Month focuses on the security of internet-connected devices in healthcare, here are five digital chinks in the armor:

  • Bluetooth

Many medical devices integrate monitoring and interaction via Bluetooth, which has a long history of vulnerabilities. And while there may be patches, it’s hard to determine the real adoption rate and timeline in the field. Meanwhile, if your blood sugar measurement gets spoofed, you could be in real physical danger if you try to adjust blood glucose levels based on false readings.

  • Windows

Many hospitals have management computers for their medical equipment which run on older, unsupported Windows versions due to lagging updates from the manufacturer that did the integration. A manufacturer can’t simply push the latest Windows patch before extensive testing on their units to see integration issues, so patch vetting can be tricky. Would-be attackers have the advantage here, since ell-known exploits can be deployed as soon as they come to light, and long before the manufacturer can react.

  • Cloud

Many implanted devices “phone home” to medical clinicians through cloud connectivity to facilitate health status updates and trigger events where patients may need to seek attention. As we saw this year at Black Hat and DEF CON, cloud security can be less than stellar. It’s unlikely the patient would have a way to know about potential vulnerabilities, but attackers are quick to seize on known exploits, pumping them through their attack frameworks quite rapidly. In some cases, patients have opted out of external communications with their pacemakers citing hacking fears, but cloud adoption for implanted devices has strong tailwinds pushing further adoption.

  • Ethernet

Many medical devices plug into medical TCP/IP networks via Ethernet, but it would be very difficult for many clinicians and patients to notice a network tap placed inline with existing connections. By exfiltrating data across wireless links embedded in such a tap, attackers could snoop traffic and craft exploits. This way, attackers only need one-time physical access, and don’t necessarily have to return to retrieve the device if it’s deemed dangerous, due to their low cost.

  • Wireless keyboards

Keyloggers have been standard fare for logging keystrokes from wireless keyboards for some time now, posing as fake USB chargers plugged into outlets, while simultaneously snooping for signals and exfiltrating them across industrial 4G wireless cards. This allows the capture of sensitive data like typed passwords, but can also allow attackers to attempt to download and install remote backdoor exploits by bypassing warning prompts from security products.

In closing

The medical field has been on its heels – security wise – for years. And while it may be making important strides, many medical devices have been performing fine all those years, lessening the perceived need to act. It will be a challenge to “modernize the fleet” for some years to come. Even so, medical folk have started to lean into the process and get the technical chops on staff to start moving the needle. Meanwhile, it might be wise to get to know any vulnerabilities that might affect your medical devices, especially if they are critically involved in your health care, as so many are.
Cameron Camp

The medical device industry is in full swing lacking much needed regulations and testing. Should regulation be proactive or reactive? What are the consequences of reactive regulations? Could this approach lead to unnecessary death?

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