The Fed economist accused of espionage for Beijing

The man described himself as a Chinese graduate student who was interested in learning about the Fed. Rogers says he refused the man’s offer to pay him. But they stayed in touch, and later, the man invited Rogers to visit China again, all expenses paid.

This time, Rogers made the trip, setting off a chain of events that led to espionage charges against him in the U.S.—and exposed new details about China’s alleged efforts to recruit informants inside U.S. government institutions.

Prosecutors allege Rogers handed over sensitive information to Chinese operatives, who posed as students and who offered to cover travel expenses to China. Rogers met his Chinese handlers in hotel rooms and in some cases shared internal Fed reports, including information prepared for discussions by the rate-setting Federal Open Market Committee, according to an indictment unsealed in January that accused Rogers of conspiring to commit economic espionage.

Federal Bureau of Investigation officers arrested Rogers in January and found $50,000 in cash at his Washington-area apartment—money that his wife said belonged to her.

Rogers has denied all charges against him, including that he knowingly assisted Beijing. People who know him, and his role at the Fed, say his value to China would have been limited because he wasn’t privy to high-level decision-making.

An attorney for Rogers said the government’s indictment lacks context and relevant facts that would undercut its implication of impropriety. For example, Rogers doesn’t speak Chinese, the attorney said.

The indictment “presents an overly-simplistic, one-sided, and skewed version of events," said the lawyer, who added that Rogers’s legal team would provide a detailed rebuttal in court “where we will prove Dr. Rogers’s innocence."

Fed Chair Jerome Powell has pointed to the central bank’s security protocols in response to past concerns about alleged Chinese spying.

Prosecutors say Rogers was a logical target for Chinese espionage, with an important-sounding title at the Fed and a growing affection for China. In 2018, he married a Shanghainese woman whom he met through a Chinese matchmaking service. FBI agents would later find a note on his iPad, dated December 2018 and addressed to “Dear Chinese People," in which he expressed admiration for China.

“I love your kindness, your generosity, and your humbly hard working, high-achieving society," the note said. “I love you unconditionally, Shanghai."

Asked about Rogers’s case, China’s Foreign Ministry said it wasn’t aware of the matter. China’s main civilian intelligence agency, the Ministry of State Security, didn’t respond to queries.

Western officials say China has ramped up espionage activities to unprecedented levels under leader Xi Jinping, including targeting institutions such as the Fed, a linchpin of U.S. financial stability. While Chinese cyberattacks have gained more prominence recently, Beijing continues to groom traditional human sources such as informants to get information, even when they appear to offer limited insight.

A 2022 report by Republican staff on a Senate committee accused China of trying to “gain access to sensitive internal information and influence the Federal Reserve" since at least 2013, offering money and other benefits.

In one case in 2019, Chinese authorities allegedly held a Fed economist in a hotel room during a trip to Shanghai and threatened to imprison him unless he agreed to provide nonpublic economic data, according to the Senate committee report. Chinese officials allegedly told him they had been monitoring his phones, including conversations about his divorce, and would publicly humiliate him if he didn’t cooperate. The economist reported the incident to Fed officials after being released, the report said.

China’s Foreign Ministry denounced the report, calling it “political disinformation."

In response to the report at the time, Fed Chair Jerome Powell said the central bank maintained robust information-security protocols. Those policies included reviews of foreign travel and personal contacts for staff with access to sensitive economic information, he said then.

The Fed updated its policies in 2021 to prohibit gifts and compensation from entities in countries, including China, that are subject to defense export controls by the State Department.

This account is based on interviews with Rogers’s associates and a review of documents related to the case.

Hotpot and currency policy

With a Ph.D. in economics from the University of Virginia, Rogers joined the Federal Reserve Board as an economist in 1994. He later worked as a senior adviser researching exchange rates and interest-rate policy.

On social media, Rogers aired his fondness for bands such as R.E.M. and the Cure. A lanky figure standing more than 6 feet tall, he sometimes led yoga classes for Fed colleagues.

People familiar with Rogers’s work said his position as senior adviser could oversell to outsiders his involvement in the Fed’s sensitive policymaking discussions. While some officials with the “senior adviser" title help Fed leaders prepare for their highly secret monetary-policy meetings, others have simply been at the Fed a long time or have specialized research backgrounds.

Rogers fell into this latter category. He didn’t attend Federal Open Market Committee meetings or have access to sensitive FOMC materials.

Even so, alleged Chinese intelligence homed in on Rogers when he traveled to China in 2013. He went there to speak at an annual conference hosted by Shanghai’s prestigious Fudan University, Rogers recalled in a podcast interview in 2024.

In 2017, Rogers accepted an invitation from the Chinese man who described himself as a graduate student to visit his university, Shandong University of Economics and Finance, in the eastern city of Ji’nan, according to the indictment. Rogers asked the student to pay for flights and hotels, and the man agreed.

Around that time, Rogers became acquainted with a 31-year-old Shanghainese makeup artist through a Chinese matchmaking service called Sky Love, which caters to Chinese women seeking romantic partners from abroad.

After months of online conversations, Rogers wanted to meet the woman, Liu Yu, in person. He added a stop in Shanghai, where they spent about two days together, sightseeing, enjoying a hotpot meal and exchanging gifts, according to Sky Love, which detailed the romance in online posts publicizing its successes in matchmaking.

Rogers then traveled to Ji’nan, where he delivered a lecture, “Uncertainty, Currency Excess Returns and Risk Reversals," at Shandong University.

The couple wedded in Hong Kong in March 2018, and Liu gave birth to their daughter in Shanghai later that year, the company said.

“A lot of trouble"

About two months after his wedding, Rogers reached out to the Chinese man who said he was a student and asked about an essay the man was writing, according to the indictment. The man sent Rogers questions about Fed policy, purportedly to get help for the essay.

Rogers emailed two Fed colleagues asking for information he could share during a trip to China, including on the Fed’s views on China’s currency. One colleague emailed him two PDF documents, one of which Rogers emailed to his Chinese contact.

After arriving in China, under the guise of teaching classes, Rogers met in hotel rooms with the man and another person—who U.S. prosecutors say was also an intelligence agent—and shared internal Fed information, according to the indictment.

In text exchanges made public by U.S. prosecutors, Rogers said the Fed wouldn’t allow him to discuss policy matters with Chinese contacts unless there was a sound academic reason for doing so.

“There has to be a lot more done to make this legitimate in the eyes of the Fed. Remember, it has to be teaching and not consulting. I am only allowed to teach," he said in one text message in 2018.

If anyone questioned the relationship, “that would cause me a lot of trouble!" he wrote. Under U.S. law, economic espionage can be punished with up to 15 years in prison.

In a February court filing, Rogers’s lawyers said the text message “demonstrates the defendant’s commitment to do the teaching which he was hired to do—not to conspire with anyone."

In the second half of 2018, Rogers took a sabbatical from the Fed, spending time in Shanghai as a visiting professor at Fudan, according to his podcast interview. He continued supplying information to the Chinese persons who described themselves as students, including notes on a briefing to someone awaiting Senate confirmation as a Fed governor around two weeks before a Fed policy meeting.

Attorneys for Rogers would later tell a Washington, D.C., court that the economist’s communications with his Chinese contacts reflected the teacher-student relationship between them. Rogers could answer his students’ questions without revealing trade secrets, the attorneys said.

Hundred-dollar bills

By 2019, Rogers had brought his new wife and daughter to live with him in Washington, according to a Sky Love post. His wife has another daughter in China and continued to spend “significant time" there, prosecutors said.

In 2020, Fed officials raised questions about Rogers’s Chinese ties in an interview with the Fed’s watchdog agency, the Office of Inspector General.

“The Chinese, they’re watching everything that the U.S. does. I don’t mean that in an espionage way, I’m sure they are doing espionage but I don’t confront that," Rogers said, according to a court submission from prosecutors. “They just want to know what’s… the Fed thinking."

Rogers added, “I was offered money, they’d come out with packets of hundred-dollar bills." But he denied sharing restricted Fed information. Prosecutors would later charge Rogers with making a false statement during this interview.

Attorneys for Rogers said he lost access to most Fed documents in May 2020, around three months after the interview. He was forced out of the Fed in May 2021, according to a government filing. A Fed spokesperson, citing privacy rules, declined to comment on the case.

About two months before leaving the Fed, Rogers signed a contract to teach at Fudan, according to government prosecutors. His contract offers a salary of around $150,000 for one semester of teaching per year, according to his lawyers. They said he also received a $300,000 research grant, to be disbursed over three years, from a state-run research institution. Fudan didn’t respond to a request for comment.

The Chinese persons describing themselves as students continued to contact Rogers. In February 2022, one messaged Rogers asking if he and his wife would be interested in traveling to the eastern city of Qingdao, and arranging a class there.

“All related expenses will be covered by us, and we can pay for the class," the agent said. It couldn’t be learned if Rogers made the trip.

Write to Chun Han Wong at chunhan.wong@wsj.com and Nick Timiraos at Nick.Timiraos@wsj.com