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Former FBI agent arrested

Accused of allowing access to classified documents

U.S. Attorney Debra W. Yang, with FBI agent Leslie Wiser Jr., at a news conference to announce the arrest of a former FBI special agent and a Chinese double agent.
U.S. Attorney Debra W. Yang, with FBI agent Leslie Wiser Jr., at a news conference to announce the arrest of a former FBI special agent and a Chinese double agent.

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WASHINGTON (CNN) -- A retired FBI agent was arrested Wednesday and accused of having a long-standing affair with a Chinese double agent and granting her access to classified documents, authorities said. The woman also was arrested.

According to an affidavit, James J. Smith, 59, a 30-year veteran of the agency who retired in 2000, recruited Katrina Leung, 49, to work as an FBI informant in the early 1980s.

Over the years, the two -- both married -- began having sexual relations, with Smith often visiting her home and leaving his briefcase open with classified documents inside, the affidavit alleges.

Leung, a Republican activist in California, was paid about $1.7 million by the FBI from 1983 to 2002 to provide the bureau with information about China, according to the court papers.

The two appeared in U.S. District Court Wednesday. Smith is charged with "gross negligence in the handling of documents relating to national defense." Bail was set at $250,000.

Leung was charged with "unauthorized copying of national defense information with the intent to injure the United States or to benefit a foreign nation." She was ordered held without bond.

Both face a maximum of 10 years in prison if convicted of the charges against them.

Prosecutors said more charges could be filed.

"This is a sad day for the FBI," said Leslie Wiser Jr., the lead FBI investigator on the case. "He betrayed the trust we all placed in him"

U.S. Attorney Debra Yang said Leung has been cooperating in recent months with FBI investigators.

"Leung described how Smith would come to her house and leave his briefcase open, which gave her the opportunity to take documents out of the briefcase and copy them without Smith's knowledge," Yang said.

Yang alleged that Smith knew of Leung's alleged involved with the Chinese government as early as 1991, but continued to meet with her and provide her access to classified material.

The prosecutor said Leung would take notes and also use photocopy machines in her home to copy the material, which she "admittedly handed over" to Chinese intelligence officials.

The basis for the charge against Leung was a June 12, 1997 secret FBI memo regarding Chinese fugitives, according to the affidavit. Yang said that document was found in her San Marino home, along with other documents, including one memo that documented conversations between her and Chinese officials.

"In interviews with the FBI, Leung admitted taking documents such as the 1997 memorandum from Smith's briefcase and passing some information to PRC intelligence officials," Yang said.

Code name: 'Parlor Maid'

Leung was code-named "Parlor Maid" by the FBI, according to the affidavit; she was known by the alias "Luo" among her Chinese counterparts.

The affidavit also says Leung has admitted to having a long-term sexual relationship with another FBI agent in San Francisco. That agent, whose name was not released, allegedly approached Smith at one point about Leung's duplicity, but was told the situation was under control.

Rep. Porter Goss, R-Florida, and Rep. Jane Harman, D-California -- the chairman and the ranking member of the House Intelligence Committee -- said the arrest was of serious concern, but commended FBI Director Robert Mueller for keeping the committee informed.

"The director has advised us of the corrective steps he has taken within the bureau as a result of this matter," said the statement said.

"We are satisfied that he has taken the right steps thus far."

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