By: Denise Simon | Founders Code
Mallory, who had top secret security clearance, worked as a CIA officer and was stationed in Iraq, China and Taiwan.
Mallory is a self-employed consultant with GlobalEx, LLC. and resides in Leesburg, Virginia. According to the criminal complaint, he graduated from Brigham Young University in 1981 with a Bachelor’s degree in political science.
Shortly thereafter, Mallory worked full-time in a military position for five years. Once he left that job, he continued his military service as an Army reservist and worked as a special agent for the State Department Diplomatic Security Service for three years (1987-1990).
Kevin Mallory Criminal Complaint by Chris on Scribd
Revealed: Chinese Front Company Used to Recruit U.S. Double Agents
A single reference buried deep within hundreds of pages of court filings in the case of convicted CIA turncoat Kevin Mallory reveals the name of a Shanghai-based “executive search firm” that bears the hallmarks of a classic espionage front, former intelligence operatives from the U.S. and Russia tell The Daily Beast.
The U.S. government’s evidence against Mallory, who was found guilty Friday of espionage-related charges, included a photograph of a business card belonging to alleged Chinese Ministry of State Security (MSS) agent Richard Yang, who presented himself as a corporate headhunter. Prosecutors said he was one of Mallory’s handlers. According to court documents, the picture was taken at Darren & Associates, a supposed corporate recruiter with no listed phone number or executives and an address that traces back to a rent-by-the-hour space on Shanghai’s Hubin Road.
Darren & Associates’ connection to the Mallory case has not been previously reported. The firm has been in business for either “around 40 years,” as its website claims, or since 2014, as stated on its LinkedIn page. The job networking site lists no actual former or current employees, and the company has a near-zero web presence, which is highly unusual for an organization that describes itself as a successful global enterprise.
“Clearly this is phony,” said former KGB sleeper agent Jack Barsky. “The first thing you do to figure out how real [a company is] is look at their website, and this is just not the footprint of a solid company.”
“Clearly this is phony… The first thing you do to figure out how real [a company is] by looking at their website, and this is just not the footprint of a solid company.” — former KGB sleeper agent Jack Barsky
It’s a “flimsy mechanism for them to use,” agreed former CIA officer Christopher Burgess. “To me, this is what someone would put up so that their business contact isn’t naked. But what it doesn’t do is talk about who they are, where they are, doesn’t give you names, and their mission is so general that it can cover anything.”
Richard Yang subsequently introduced Mallory to an associate, Michael Yang, who claimed to be affiliated with the Shanghai Academy of Social Sciences (SASS). It has a close relationship with the Shanghai State Security Bureau (SSSB), a sub-component of the Ministry of State Security, according to the FBI. The Shanghai security bureau “uses SASS employees as spotters and assessors,” says one court filing, and “FBI has further assessed that SSSB intelligence officers have also used SASS affiliation as cover identities.”
Chinese think tanks like the Shanghai academy “can be used to invite someone over who is either a person of interest or a source,” Peter Mattis of the Jamestown Foundation’s China Program told Bethany Allen-Ebrahimian and Elias Groll of Foreign Policy last year. “That person comes over and gives a talk, and they’ll be met and have meetings with the local state security element or the People’s Liberation Army.”
Others are based in the U.S., they pointed out. The China Institute of Contemporary International Relations describes itself as a “comprehensive research institution” but is also “an official numbered bureau of the Ministry of State Security, functioning rather like the CIA’s Open Source Center.”
Darren & Associates, the erstwhile headhunting firm, seems rather less sophisticated. Either the MSS was “too lazy” to create a more realistic front company, or they thought “no one would give a shit about this Mallory guy and no one would be checking it,” said a former Russian FSB officer now living in the U.S. under the pseudonym “Jan Neumann.”
But U.S. authorities did care, and Mallory’s scheme unraveled in 2017 when he was selected for secondary screening at Chicago’s O’Hare Airport after a trip to China. Although he said he had nothing to declare, customs officers found $16,500 in cash on him.
““An individual like Mallory, with 20-plus years of high-end intelligence community engagement should have known better than [to use] this weak cover story that the Chinese gave him.” — former CIA officer Christopher Burgess
“An individual like Mallory, with 20-plus years of high-end intelligence community engagement should have known better than [to use] this weak cover story that the MSS gave him,” said Burgess. “He should have picked up the phone and called the FBI and said, ‘Hey, these people say they’re legitimate businesspeople, and I don’t think they are.’ And he should have done that years ago.”
The details of exactly what Mallory gave up have yet to be publicly revealed, and probably won’t ever be, said Burgess. But according to prosecutors, Mallory gave away the most precious secrets of all—the names of U.S. agents in China.
A CIA information review officer said in court last year that the documents Mallory gave to the Chinese contained sensitive intelligence, analysis, and the names of assets that “could reasonably be expected to cause the loss of critical intelligence and possibly result in the lengthy incarceration or death of clandestine human sources.”
”It’s a betrayal in the truest sense of the term,” former CIA Inspector General Frederick Hitz told The Daily Beast.
FBI analysts further determined that Mallory “had completed all of the steps necessary to securely transmit at least four documents…one of which contained unique identifiers for human sources who had helped the U.S. government.”
Some of these files were stored on a Toshiba SD card, which Mallory concealed in aluminum foil and hid in his bedroom closet.
“We overlooked it twice,” FBI Special Agent Melinda Capitano testified Thursday.
“What made you think to open it?” the prosecutor asked.
“Usually in my training, small bits of foil like this contain drugs,” Capitano replied.
via PACER – The foil-wrapped SD card found in Mallory’s home.
Mallory’s defense team claims that the documents were worthless and that he was actually operating as an independent, self-directed counterintelligence officer of sorts to reel in the Chinese agents so he could eventually turn them into U.S. authorities. Burgess calls that “hogwash.” Mallory wasn’t freelancing in counterintelligence, he “was all-in” as an asset, in Burgess’ opinion.
“He was responsive to tasking, he used covert communications to reduce face-to-face interactions with his PRC contact,” said Burgess. “If I was validating a source, those are all indications that I have a good one.”
“He’s throwing something at the wall to see if it sticks,” laughed former Defense Intelligence Agency officer Ray Semko. “Just as long as they get one fool [on the jury] to believe it.”
Mallory’s attorney, Geremy Kamens, declined a request for comment.
Mallory, his wife, and one of his three kids lived in a four-bedroom, four-bathroom, 7,100-square foot house in Leesburg, Virginia, complete with a home theater and two fireplaces. He paid $1.15 million in 2005, a lot of money for a guy prosecutors said earned only $25,000 in the three years—all of it from his Chinese handlers.
He also has three adult children from a previous marriage. A court filing said Mallory had $50,000 in credit card debt, and about $2,500 in cash and investments. His wife, Mariah Nan-Hua Mallory, drives a school bus and earns roughly $9,000 a year.
In a motion previously filed with the court arguing against Mallory’s release pending trial, prosecutors said he had “demonstrated a pattern of dishonesty.”
“The defendant says and does anything he wishes to suit his particular needs, which seem largely to be finding an easy path out of his financial hardship, by betraying his government,” the motion stated.
A disguise kit found by FBI agents during a search of Mallory’s home.
However, Patsy Harrington, a real estate broker and close friend of Mallory’s who sold him his home, insists that Mallory is being totally mischaracterized.
“He is a loyal serviceman that was hurt in the line of duty in the Middle East, he’s a wonderful family man and a devoted Mormon with a wonderful wife and three highly accomplished grown children,” Harrington told The Daily Beast. “He’s a good man. I was a single mom and he was wonderful to me. He’s much better than 97 percent of the human beings I know.”
A LinkedIn recommendation from Min Xu, an associate professor at Central China Normal University describes Mallory as “a very faithful, honest, loyal, serious but kind, helpful, contagious person, very nice to everyone around, I will always remember his timely help and the warmth he gave to us when we were in trouble. He is really an amazing man.”
In fact, the Chinese agents who targeted Mallory initially reached out to him on LinkedIn. It’s a virtual goldmine for those looking to identify members of the “cleared community,” said Christopher Burgess, who has been contacted by people he assumed were foreign intelligence operatives more times than he can count.
Yet Chinese intelligence isn’t only interested in people with active security clearances. Anyone with access or influence can potentially be of value, and everyone from professors to scientists to journalists have received overtures from foreign spy services.
National security reporter Garrett Graff was targeted on LinkedIn by Evgeny Buryakov, a Russian SVR operative posing as a New York City investment banker. And a Chinese agent used LinkedIn to reach out to journalist Nate Thayer last year.
“On the day I received my first message from Chinese intelligence agents from the Ministry of State Security, they, of course, didn’t say they were Chinese spies,” Thayer wrote on his blog. “The note was from ‘Frank Hu,’ a ‘project assistant’ from Shanghai Pacific & International Strategy Consulting Co, saying he had found me on the Internet and was writing to ‘seek potential cooperation opportunities.’”
Predictably, there is no “Shanghai Pacific & International Strategy Consulting Co,” which doesn’t even maintain a rudimentary Darren & Associates-style website. “Hu” told Thayer the company was “a consulting firm, specializing in independent policy analysis and advisory services. We strive to help our clients properly assess political dynamics, risks and opportunities in countries and regions they operate in.”
“In terms of human source operations, the PRC ‘services’ are not all that sophisticated,” an intelligence community source told Thayer, “until they get you on their turf. So don’t go there–to Shanghai, that is–for any reason.”
Of course, there is no such thing as a foolproof system in espionage, and breaches like Mallory’s will surely happen again.
As Joseph Wippl, a 30-year veteran of the CIA’s National Clandestine Service, told The Daily Beast, “It’s part of the business.”