Two Decades of Deception Revealed

When Chinese warships made their first visit to the U.S. mainland six years ago, alleged double agent Katrina Leung hosted a special banquet welcoming the naval power.

It was a familiar role for Leung, who stood between Chinese and American flags. For two decades, the gracious mistress of ceremonies successfully cast herself as a grateful emigre, a woman committed to building ties between her native China and the U.S.

Today, her closest friends say they are shocked to learn she was on the FBI payroll, but federal prosecutors say she was keeping an even deeper secret.

They allege Leung was working for China during the two decades that she collected $1.7 million to spy for the United States. For nearly as long, Leung, who is married, had an affair with the FBI agent who recruited her in the early 1980s, James J. Smith. Leung also acknowledged to authorities an affair with an FBI agent in San Francisco.

She was indicted Thursday on charges of obtaining, copying and keeping national security documents, federal crimes punishable by up to 50 years in prison. She has remained in custody since her arrest April 9.

Leung, who was not charged with espionage, denied betraying the United States in a statement issued last month by her family and friends. For 20 years, it said, Leung did exactly what the FBI asked, “giving up her career and personal life” out of loyalty to the United States. “Two agents embarrassed the FBI by taking advantage of Katrina,” it said.

Throughout this time, Leung introduced Smith at numerous social events as “my good friend from the FBI.” Leung’s friends said they did not suspect a romantic entanglement.

Smith, 59, is accused in a federal indictment of gross negligence for allowing Leung access to classified documents and depriving the FBI of “his honest services.”

The two are scheduled to be arraigned today.

Smith is free on bail. Also married, he retired from the bureau in November 2000, but allegedly continued the affair until late last year.

Prosecutors say the liaisons gave Leung access to government information. The bureau’s yearlong investigation included audio surveillance, evidence the FBI says includes tapes of the couple having sex at a Los Angeles-area hotel in November.

The surprise, said Leung’s acquaintances, was not that she may have worked for China, but that she was working for the FBI.

Leung was unwavering in her public support for the People’s Republic of China -- touting the progress made by the Communist government and downplaying human rights concerns. She organized the local celebration of China’s founding day, Oct. 1, almost every year since China’s L.A. consulate opened in 1988.

After Deng Xiao-ping, China’s “paramount leader,” died in 1997, Leung greeted dignitaries and visitors who paid respects at a memorial at the Chinese consulate in Los Angeles. She organized the welcoming banquet when Premier Zhu Rongji visited Los Angeles in 1999.

Chinese American leaders who traveled to Beijing as special delegations said Leung enjoyed a vice minister’s level of treatment by Chinese officials. She helped arrange a face-to-face meeting in 1998 between then-Los Angeles Mayor Richard Riordan and Chinese President Jiang Zemin.

The FBI had recruited her in the early 1980s, before she became well-known locally. She was approached, according to a statement by her family and friends, because of her “contacts in China.” The FBI convinced her that covert work would be for the “good of America and the Chinese people.”

Her last trip overseas began with a business conference in Hong Kong, where Leung attended a cocktail hour for the finance minister of the regional Chinese government.

On her way to the conference, federal officials secretly searched her luggage at LAX, finding photographs of Los Angeles-area FBI agents.

Those who saw her at the conference said she gave no hint, if she was aware, that the U.S. government that had employed her for 20 years now suspected her of double-dealing.

From Hong Kong, she traveled to China, where she surprised members of Los Angeles Mayor James K. Hahn’s delegation by turning up unexpectedly at the Beijing hotel where they were staying.

On her way home, the FBI again searched her luggage.

The photos of the agents were gone.

Federal prosecutors suspect the photographs may have been the last of Leung’s efforts to provide information to China’s intelligence agency.

A Private Life

The barest skeleton of Leung’s life -- one characterized by her attorneys as an immigrant’s American dream and by federal prosecutors as an elaborate ruse -- is laid out in court papers and a statement released by her husband. Interviews with dozens of her business associates, friends and acquaintances, as well as her past remarks, reveal a woman who pursued the limelight while sharing little about herself.

Leung was born Man Ying Chan in Guangzhou, China, in 1954. She moved to Hong Kong as a toddler and was taken in by an aunt, who her lawyers say raised the girl as her own daughter. At age 15, Leung moved with her aunt to New York City, where they joined her aunt’s husband. Leung enrolled at Washington Irving High School, one of the city’s last all-girl public schools.

Her aunt, Susan Chin, still lives in the small brick apartment building in Manhattan’s Chinatown, where the family landed in 1970. She said Leung was such an excellent student, “I never had to worry about her.”

Leung rarely made trips home to New York after going to college. In the last 20 years, Chin said, she has seen Leung once because of the distance and Leung’s busy schedule.

Chin, who is listed on Katrina Leung’s immigration papers as her mother and insisted Katrina was her daughter in interviews, said the family came to America for a better life.

It was not unusual for so-called paper families to be formed with children sent to live with relatives or family friends for the chance to live outside of mainland China. In New York, Chin said, her husband owned a taxi company and other small businesses.

Headed for Cornell

Two years after moving to New York, Leung -- then known as Katrina Chan -- graduated from high school and was one of only a few dozen women to enter Cornell University’s college of engineering in 1972, according to school records.

Classes began on the Ithaca, N.Y., campus in the fall, months after President Nixon made his breakthrough trip to China. The Nixon trip to Beijing in February 1972 reopened ties between the two nations, 21 years after the United States imposed a trade embargo.

In a 1997 interview with The Times, Leung said her ties to the Chinese government dated back to this time. “I have a lot of friends in China -- in the ministry of foreign affairs,” she said then. “I pride myself as somebody who is respected and trusted.”

In the early 1970s, according to Leung, she assisted people working at China’s U.N. Mission in New York -- then newly opened -- and continued the relationship over the years.

“I helped them,” she said. “China remembers old friends. All these people I entertained became big shots.”

The arrival of China’s Mission to the United Nations in November 1971 prompted excitement in America’s Chinatowns. Chinese in the United States were cut off from mainland China by the U.S. trade embargo and Mao Tse-tung’s Cultural Revolution.

Back then, some Chinese immigrants who urged U.S. officials to normalize relations with mainland China received death threats. The battle for public opinion among Chinese people living abroad was furious.

If Leung had strong ideas about politics in her college years, fellow Chinese classmates say, she did not share them.

Leung was friendly and outgoing, speaking Cantonese to fellow classmates in their close-knit Chinese student association, said one college friend, now a Los Angeles real estate sales agent. As a group, the friend recalled, they were apolitical, focusing on studies and socializing.

Leung transferred from engineering to the College of Human Ecology, formerly known as Home Economics, school records show. In 1975, she married a fellow Cornell student, Kam Leung, who used the name Patrick on campus. The ceremony was held in the small rural community of Dryden, N.Y., a few miles from Ithaca.

Two years later, Leung’s husband earned a doctorate in biochemistry. The couple moved to Chicago, where Leung enrolled in the University of Chicago’s business school, earning her master’s in business administration in 1979.

Kam Leung then took a job at Proctor and Gamble in Cincinnati. The couple soon bought a Cape Cod-style home, where they lived for less than a year, said a neighbor, who did not want to be named. Katrina Leung, the neighbor recalled, said they were moving to California for better opportunities.

After three years in Los Angeles, Leung began in 1984 to make a name for herself among members of the Chinese immigrant community.

By all accounts, the woman the FBI called “Parlor Maid” and Chinese immigrants called “Dai Tse Dai,” or “Big Sister,” skillfully cultivated relationships with people of influence and power.

She began with David Lee, 83, owner of the now-closed General Lee restaurant in L.A.’s Chinatown. Lee is a longtime board member of the Los Angeles Guangzhou Sister City Assn. and Southern California chapter president of the National Assn. of Chinese Americans.

She introduced herself to Lee as the city prepared for the 1984 Summer Olympics. Lee organized a welcome banquet for the athletes from China that drew criticism from the local Chinatown establishment, and Leung offered to help.

The banquet drew 2,500 people -- a big success in a community divided by homeland politics. Lee was so impressed with Leung that he introduced her to members of the Sister City Assn., an influential group that worked to build relations with China.

With Lee’s introductions and her subsequent work for the Sister City Assn., Leung met civic leaders, including philanthropist Caroline L. Ahmanson, a prominent Republican and former chairman of the Federal Reserve Bank of San Francisco.

“Knowing Mrs. Ahmanson opened the doors for her,” said Bee Canterbury Lavery, a board member of the sister city association and former Mayor Tom Bradley’s chief of protocol until 1992. “Mrs. Ahmanson was very fond of Katrina.”

Gaining Prominence

By 1993, Leung was president of the sister city association and won nomination to join the New York-based National Committee on the United States-China Relations, an organization of prominent Americans.

“She was always extremely helpful, very gracious, very warm, very friendly,” said Jan Berris, vice president of the National Committee, who met Leung in the late 1980s and turned to her for help with visiting Chinese dignitaries. “Whenever we needed anything, we’d call her, and she’d be there to do it.”

Leung served on the local sister city group until 1999. By this time, Leung became known for her close ties to Beijing. She had a reputation as someone who could cut through red tape for politicians, businessmen and civic leaders seeking to do business with China, said dozens of people who have worked with her.

For all her public visibility, Leung guarded her private life. She described herself as a venture capitalist who found time for community work between deals. Government officials now allege she was a tax cheat.

Though she rubbed shoulders with the rich and prominent of Los Angeles’ civic life, she did not look the part of socialite. She did not wear expensive clothes, and her jewelry usually consisted only of her diamond wedding ring and an emerald ring.

But she drove a Mercedes-Benz, and her San Marino home, with guest quarters, was well-furnished with artwork. A giant painting on one living room wall, she told a visitor, was a gift from a famous Beijing painter.

She knew how to use small gestures to make an impression.

Lee, known as an elder statesman of U.S.-China relations in L.A.’s Chinatown, said Leung was like a niece, taking care to hold his arm and help him walk up and down steps, knowing that he had trouble with his right leg.

Some suspected her motives were more calculating.

“Power and money was her ambition,” said Dr. Daniel Wong, former Cerritos mayor and physician, who is viewed as pro-Beijing in the local Chinese American community. “She was bossy and domineering and very skillful in getting people to be on your side.”

She was a name-dropper, telling people that the late Chinese President Yang Shangkun was her godfather, and that a daughter of Deng Xiao-ping had been a house guest. She boasted about her friendships with Ahmanson, Riordan and the late City Councilman John Ferraro.

Leung had been scheduled to be in Beijing on Feb. 28 for a banquet honoring her and eight others from Southern California, including her friend David Lee.

“We did not know why she didn’t show up,” said Lai Bo, a spokesman for the Chinese consulate in Los Angeles.

But Lee, who went to Beijing for the honor, said Leung told him she wasn’t feeling well enough to travel. By then, court documents show, Leung had surrendered her passport to authorities, and had allowed her San Marino home to be searched by FBI agents.

Times staff writer Kevin Leung contributed to this report.