Kevin Mallory has always been a risk-taker. In a 20-year career in intelligence, he violated the terms of his top secret security clearance at least twice.
Mallory, 61, bet a jury would believe he was acting as a freelance triple agent, luring the Chinese in so he could hand them over to U.S. authorities.
On Friday, jurors in Alexandria federal court found the former CIA officer guilty of espionage and three related charges. He faces up to life in prison when he is sentenced on Sept 21.
“This case should send a message,” U.S. Attorney G. Zachary Terwilliger told reporters outside the courthouse after the verdict was read. “We will be dogged in pursuit of these challenging but critical national security cases.”
Mallory approached the CIA himself last year, saying he was being recruited by Chinese intelligence. But he lied about the money he took and the classified documents he handed over. When FBI agents discovered evidence of both on the phone Mallory was given by the Chinese, the former covert operative claimed he was running his own sting operation.
“That is totally and completely absurd,” Assistant U.S. Attorney John Gibbs said during closing arguments Thursday. “If he got caught, he was hoping to have one last card to play.”
Whatever his motivations, Mallory’s case ended up providing American intelligence details of how the Chinese recruit and communicate with foreign assets. And by maintaining his innocence and going to trial, he gave the public a glimpse of spy games that rarely see the light.
The two-week trial included testimony from an undercover CIA contractor and high-ranking intelligence officials, and it was closely watched by representatives of several “three-letter agencies,” as Judge T.S. Ellis III joked. Jurors saw eight classified documents that Mallory was shopping to the Chinese, along with the table of contents he wrote, which also contained secret information.
Those documents revealed details of a still-classified Defense Intelligence Operation and a CIA analysis of another foreign country’s intelligence capabilities.
“The information itself still remains current and revelatory,” testified Hugh Michael Higgins, until recently head of operations at the DIA. “It would still have a severe impact on national defense.”
Mallory, of Leesburg, is a U.S. Army veteran who along with the CIA and DIA worked for several defense and intelligence contractors. By 2012, though, he had left government and was running his own consulting firm, with little success. He was three months behind on his mortgage and in serious debt when a Chinese headhunter reached out to him on LinkedIn in February 0f 2017.
Messages on the site, along with emails, online chat transcripts and taped interviews, show how Mallory quickly developed a relationship with a man calling himself at various points Michael Yang, Myers Yang and Yang Kai.
Yang passed himself off as a think tank representative looking for a consultant on foreign policy. But Mallory said in taped interviews played in court that Yang and his boss, who called himself Mr. Ding, were fairly open about their true motivations. On Mallory’s second of two trips to China last spring, Yang gave him a Samsung phone that had been modified with a customized secret chat application. Mallory handed the phone to the FBI, not realizing they would be able to see his communications.
Mallory sent Yang at least two documents, including a white paper summarizing an undercover operation he had proposed at DIA. He had tried to send a version of the actual proposal, according to logs of his phone, along with a CIA analysis of an unnamed country’s intelligence capabilities.
In the chat conversations, Yang pressed for more useful information while saying his top priority is Mallory’s safety.
“You need to trust me, and I need certain time and more complete stuff from your side,” he wrote at one point.
Mallory responded that for the risk he was taking, he needed a bigger reward, saying it did not appear the Chinese had an “appreciation” for a “larger intel stream.”
Higgins testified that the back and forth “follows what I believe to be a nearly classic evolving espionage relationship.”
The DIA proposal and the white paper based on it remain classified, but testimony and court documents sketch a vague outline.
Mallory would go undercover at a company that has a footprint in China and whose owners — in court called “the Johnsons” — already cooperated with the U.S. government. His goal would be to gather science and technology information.
“He was proposing to do something unique and sensitive,” testified Robert Ambrose, who oversaw such operations at DIA when Mallory worked there. “The idea had some merit and I had some concerns.”
Ambrose said a modified version of the plan did go forward, without Mallory’s involvement, and that the Johnsons worked with U.S. law enforcement for several years.
According to court records, Mallory was let go by the DIA in 2011 in part because he shared details of the proposal with a private intelligence contractor.
Had Mallory sent his full presentation detailing the proposal to go undercover at the company, Higgins said, “the repercussions for both individuals and companies are fairly dire.”
The Johnsons talked to Mallory via LinkedIn in 2017 and told him they no longer had business in China, according to records shown in court.
That communication was a major breach, Higgins testified. As their former handler, Mallory should not have been in contact with the Johnsons.
Two men who worked with Mallory at intelligence contractors in Iraq testified their old colleague was always a risk-taker and rule-breaker — but not a traitor.
Mallory is “someone who leaned a little bit too far over his skis,” testified Rick Vandiver, who supervised the defendant for about two years at The Lincoln Group.
He said Mallory violated his security clearance and company policy. When asked if Mallory had broken the law, he said no only after it was clear the question was about U.S. law.
But “I never questioned he would be loyal to the United States,” Vandiver said. “In his heart his intent, I thought, was always righteous.”
Public defender Geremy Kamens argued in closing arguments that the documents the Chinese spies actually received — the table of contents and the white paper — were “perfectly worthless.”
“No one sells national defense information for $25,000,” he argued. “That is pocket change.”
He noted that two other intelligence community retirees facing prosecution on similar grounds allegedly got hundreds of thousands of dollars from the Chinese government. Jerry Chun Shing Lee is a former CIA officer facing trial in Alexandria next year; ex-DIA officer Ron Rockwell Hansen was arrested last weekend inSeattle.
All three are accused of turning to China after failing to find financial success in their post-government careers.
“Unfortunately, this case is not an isolated incident,” Assistant Attorney General John C. Demers told reporters outside court. “The Chinese government is a sophisticated and determined adversary.”