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Chinese man in NY Fed cyber theft hires veteran crime lawyer

By Basil Katz

NEW YORK (Reuters) - A Chinese computer programmer charged with stealing software code from the Federal Reserve Bank of New York has hired a criminal attorney best-known for his successful defense of a member of one of America's leading crime families.

The attorney, Jeffrey Lichtman, said he was retained last week by Bo Zhang, the 33-year old accused former New York Fed contractor, who is in plea negotiations with the government.

"I felt that Zhang was being unfairly portrayed in the media," Lichtman told Reuters in a phone interview on Wednesday.

The New York lawyer has handled cases that have been splashed across the city's tabloids and has defended celebrity clients, including John "Junior" Gotti, the son of former New York mob leader John Gotti. The younger Gotti's trial in 2005 ended in a hung jury.

Zhang was previously represented by attorney Joseph Grob. Grob had declined to comment on Zhang's case beyond calling it a serious criminal matter. He was not immediately reachable on Wednesday.

Zhang was accused of illegally copying the software code to an external hard drive, according to a criminal complaint filed in U.S. District Court in Manhattan. The charges were made public on January 18.

He was charged with one count of stealing U.S. government property, which carries a maximum 10-year prison term. U.S. prosecutors said Zhang had admitted to copying the code on to a drive and taking it home.

Authorities said the software, owned by the U.S. Treasury Department, cost about $9.5 million to develop.

Companies and U.S. government officials have been increasingly vocal about the threat of economic espionage by China and Russia. But experts asked about this case said it appeared to be one of simple theft.

Lichtman said any suggestion Zhang was "some kind of spy working for the Chinese government ... is untrue."

Zhang was freed in January on $200,000 bail and has yet to be indicted. His next court appearance had been due next Monday but has been delayed for another 30 days so federal prosecutors and Lichtman can continue plea negotiations.

Asked what he expected the outcome of the case would be, Lichtman said he hoped "for a humane and fair resolution."

Lichtman said that Zhang, who came to the United States 12 years ago on a student visa and was later employed on a temporary work visa, was "terrified" of being deported. "He is a really hard-working guy," Lichtman said. "I felt bad for him."

Zhang told investigators he took the code "for private use and in order to ensure that it was available to him in the event that he lost his job," the criminal complaint said.

Zhang was hired as a contract employee in May by an unnamed technology consulting company used by the Fed to work on the Treasury software project, the complaint said.

The code, called the Government-wide Accounting and Reporting Program, or GWA, was developed to help track the billions of dollars the U.S. government transfers daily. The GWA provides federal agencies with a statement of their account balance.

The case is USA v. Bo Zhang, U.S. District Court for the Southern District of New York, No. 12-0108.

(Reporting By Basil Katz; Editing by Peter Cooney)

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