Two suspected Chinese spies gave a Sydney businessman envelopes of cash for information about subjects including a government deal with the United States and Britain to build a fleet of Australian nuclear-powered submarines, prosecutors told a court on Monday.
The businessman, Alexander Csergo, was refused bail when he appeared by video link from prison in Sydney’s Downing Center Local Court charged with one count of reckless foreign interference.
The charge, included in laws against covert foreign interference and espionage that angered China when they were legislated in 2018, carries a maximum 15-year prison sentence.
He is accused of accepting money from two suspected Chinese spies he knew by the names Ken and Evelyn in exchange for handwritten reports on Australian defense, economic and national security arrangements since 2021 while he worked in Shanghai, where he owns a communications and technology infrastructure consultancy business.
The subjects included the AUKUS partnership among Australia, the United Kingdom and the United States to create an Australian submarine fleet powered by U.S. nuclear technology that was announced in September 2021, prosecutor Connor McCraith said.
U.S. President Joe Biden and the leaders of Australia and Britain announced details of the deal in March, including that Australia would buy secondhand Virginia-class submarines from the United States and build a new AUKUS class of submarines with Britain.
The suspected spies also requested details about Australia’s partnership with the United States, Japan and India known as the Quadrilateral Security Dialogue, or the Quad, as well as information about lithium and iron ore mining in Australia, the prosecutors alleged.
Csergo has been in custody since Friday, when he was arrested at his home in the Sydney beachside suburb of Bondi. He had been questioned for weeks by police and agents of the Australian Security Intelligence Organization, the nation’s main domestic spy agency.
McCraith said Csergo admitted early in the questioning that he suspected Ken and Evylen were spies soon after meeting them but remained in contact with them for two years.
“He clearly has links to the Chinese state and two people he clearly thinks work for the MSS (Ministry of State Security),” McCraith told the court. “He also traveled back to Australia with a shopping list” of requested information, he said.
McCraith said a reasonable person would have alerted Australian authorities immediately after being approached.
Instead, Csergo continued to communicate with the male suspected spy, including inviting him to visit Australia, McCraith said.
Csergo’s lawyer, Bernard Collaery, said there was nothing sinister about his client’s behavior and that he was an experienced, successful businessman who was lauded for developing working relationships in China.
“Businesspeople such as our client know all roads lead to the state, whether it be the state economic intelligence agency" or the Ministry of State Security, Collaery said.
“Cash payments for consulting reports might have a color to it in Australia but might be the way it’s done in China -- it’s not necessarily sinister,” Collaery added.
Collaery said the reports were from publicly sourced documents, plus Csergo’s own creative efforts, and were nothing close to espionage.
Magistrate Michael Barko said Csergo was a “very well-educated, sophisticated, worldly businessperson” who was entitled to the presumption of innocence.
But Csergo faced a strong case from prosecutors, including several substantial admissions, Barko said.
Csergo told ASIO investigators he met Ken and Evelyn in empty cafes in Shanghai and believed the cafes had been specially cleared for him, according to court documents.
Csergo also believed Ken and Evelyn had been assigned by China’s spy agency as his “handlers,” the documents say.
“I don’t know what they do in China, but in this country, if I were to read those facts to any layperson, they would be highly suspicious of the conduct of the defendant, at the very least,” Barko said.
Csergo is due back in court in June.
