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Accused double agent pleads to tax charge
YOUR E-MAIL ALERTSLOS ANGELES, California (CNN) -- A woman accused of being a Chinese double agent pleaded guilty Friday to lesser charges -- a tax violation and lying to authorities about her longtime affair with an FBI counterintelligence agent. In exchange for her plea, authorities agreed to drop their investigation of Katrina Leung, a prominent Chinese-American businesswoman who spent 20 years as an FBI informant. The 51-year-old will serve no jail time after pleading guilty in U.S. District Court to two felonies -- making false statements to the FBI and filing a bogus income tax return in 2000. Instead, she received three years of probation and was ordered to complete 100 hours of community service. She also must pay a $10,000 fine and participate in FBI debriefings for 18 months. She could have received up to eight years in prison. "Let the past be the past, I am looking forward to a another new chapter in my life," Leung said, following her guilty plea. Leung was indicted in 2003 after prosecutors said she copied and kept unauthorized documents pertaining to national defense that she got from her FBI handler, James J. Smith. Smith, a retired counterintelligence agent, pleaded guilty in March to lying about his sexual affair with Leung. Smith and Leung are both married to other people. A federal judge dropped the original charges against Leung in January, citing prosecutorial misconduct, but government lawyers continued their investigation of Leung. The original charges carried a maximum possible penalty of 50 years in federal prison. Leung, using the code name "Parlor Maid," acted as a double agent and routinely stole secret defense documents and gave them to China's Ministry of State Security, the country's intelligence service, prosecutors alleged. She was never charged with espionage. However, Leung's lawyers contested that FBI agents fed her information for 20 years, encouraging her to give it to Chinese government officials to earn their trust. From 1983 to 2002, Leung was paid $1.7 million for providing information about China, according to affidavits. Leung was a highly valued U.S. intelligence asset because of her access to top leaders from the People's Republic of China, including former President Jiang Zemin, former Premier Zhu Rongji and the late President Yang Shangkun, officials said. During a search of Leung's home, authorities found the telephone numbers of FBI agents who were investigating Peter Lee, a physicist who pleaded guilty to providing Chinese scientists with classified information about nuclear weapons, according to court documents. Prosecutors also alleged that Leung copied and took notes from classified materials she found in Smith's briefcase during the course of their 20-year affair. Smith retired in 2000 after nearly 30 years in the FBI, where he focused almost exclusively on foreign counterintelligence involving China. Smith and Leung became the center of a criminal investigation after authorities began secretly monitoring their meetings, including a videotaped sexual liaison in a motel room, long after his official business association with her ended, according to court documents. CNN's Stan Wilson contributed to this report. 
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