Chinese 'double agent' charged

Leung was considered a highly valuable source

A woman suspected of being a Chinese double agent has been indicted by a federal grand jury in the United States on charges that she illegally took, copied and kept secret documents.

It is alleged that Katrina Leung got the documents from James Smith, a former agent from the Federal Bureau of Investigation (FBI), who was both the man who recruited her as a spy and her lover.

Ms Leung was indicted on five charges by the grand jury in Los Angeles, where she is currently in jail, although controversially she has not been charged with espionage.

Her lawyer, speaking in front of her home in the exclusive LA suburb of San Marino, said she was a loyal American who was being offered up as a "sacrificial lamb" by the FBI to cover its own failings.

Earlier, Mr Smith was indicted on six charges of gross negligence and wire fraud for allegedly allowing his mistress access to secrets.

Briefcase raided

Mr Smith is said to have recruited Ms Leung in 1982 to be an FBI agent providing intelligence on China, and the two began an affair that year.

But it is alleged that Ms Leung was simultaneously passing information to the Chinese.

She has been stabbed in the back by the same bureaucrats who benefited (from her service)

Janet Levine, defence lawyer

Prosecutors say she removed classified material from Mr Smith's briefcase when he visited her home, and passed the information to Chinese intelligence agents.

The indictment against Mr Smith charges him with two counts of negligence, alleging that he improperly removed two classified documents from FBI offices in Los Angeles and allowed Ms Leung access to them.

Four counts of wire fraud allege that he deprived the US of his honest services by failing to disclose an improper relationship with Ms Leung, failing to describe the full extent of her contacts with China, and mishandling classified information.

The six counts in the indictment carry a maximum penalty of 40 years in prison, prosecutors say.

Denials

Mr Smith's attorney has said that he is innocent, while Ms Leung's attorneys say they expect her to be exonerated of any charges.

Mr Smith, 59, spent 30 years in the FBI, most of that time as a Chinese counter-intelligence agent, before retiring three years ago.

He was freed on a $250,000 bond shortly after his arrest on 9 April.

Ms Leung, 49, a prominent Los Angeles socialite and political activist, has been held without bond since her arrest on the same day.

She was considered a highly valuable source by the FBI and was paid $1.7m for her information over the years, court documents say.

Mr Smith and Ms Leung are both married to other people.

Ms Leung's husband, Kam, is standing by his wife.

"We all love her and look forward to the day we can welcome her back," he told reporters.