Leung, Agent Plead Not Guilty in Documents Case

A retired FBI counterintelligence officer and a prominent Chinese American businesswoman who was his paid informant and lover for nearly two decades pleaded not guilty Monday to federal charges involving the alleged mishandling of national security documents.

James J. Smith, 59, who headed the China squad at the FBI’s field office in Los Angeles, and Katrina Leung, 49, who has been accused of being a Chinese double agent, were arraigned before a U.S. magistrate in Los Angeles.

Leung was indicted last week on charges of obtaining, copying and keeping classified documents she allegedly removed from Smith’s briefcase when he visited her at her San Marino home.

In federal court Monday, the two were present but had no direct interaction. Leung was kept in a glass enclosure for most of the hearing. Smith, who is free on bond, sat in a public area with his defense attorney.

During her tenure as an FBI informant, Leung made numerous business trips to China and had access to high-ranking Chinese officials.

Born in China, she grew up in the United States, received a master’s in business administration from the University of Chicago and became a venture capitalist.

Smith, who retired from the FBI in 2000, was charged in a separate indictment with gross negligence for allegedly allowing her access to classified documents and with fraud for allegedly concealing information that cast doubt on her reliability.

Neither defendant was charged with espionage, although federal authorities said that in 1991 Lueng was discovered to have had unauthorized discussions about national security matters with an official at the Chinese Ministry of State Security. Leung’s lawyers deny she was a double agent and insist that she was simply following her FBI handlers’ orders.

Smith’s case was assigned Monday to U.S. District Judge Florence-Marie Cooper in a random selection process. Leung drew U.S. District Judge R. Gary Klausner.

Later in the day, Leung’s lawyers moved to get her case assigned to Cooper. Defense co-counsel John Vandevelde filed a notice disclosing that he and Klausner live in the same community and attend the same church and that their eldest sons are close friends.

The defense also cited local court rules requiring that related cases be handled by the same judge.

Cooper, a Democrat, was nominated to be a federal judge by President Clinton in 1999. Klausner, a Republican, was selected by President Bush last year. Both served previously as Los Angeles County Superior Court judges.

Leung, who has been held without bail since her arrest April 9, faces a maximum sentence of 50 years in prison if convicted on all counts.

Outside the Roybal federal building Monday, her husband, Kam, a biochemist, told reporters, “I love my wife, Katrina Leung, very much.” He expressed confidence that she will be vindicated.

Smith, who faces a maximum 40 years in prison if convicted, is free on $250,000 bond.

He did not talk to reporters as he left the courthouse Monday with his lawyers.

For the defense attorneys, the next order of business is to work out arrangements with prosecutors to view the evidence against their clients, much of which is classified.

Leung and Smith are tentatively scheduled to go on trial July 1.

But that date will almost certainly be extended because trial preparations are expected to be time-consuming and complicated.