KMAX: News of the West

Judge sets $2 million bail for woman jailed in LA spy case

By LINDA DEUTSCH
AP Special Correspondent

LOS ANGELES (AP) A woman accused of stealing classified information from her lover and FBI handler and passing it to the Chinese could be released from jail after a federal judge set her bail Thursday at $2 million.

U.S. District Judge Florence-Marie Cooper made the ruling in the case of Katrina Leung, a socially active, politically connected businesswoman from the wealthy suburb of San Marino who was recruited to work for the FBI .

With extensive paperwork needed to post property and secure the bond, Leung's lawyers said it could be two weeks before she walks out of jail.

In setting bail, Cooper noted that during a one-year period when Leung knew she was under investigation, she did not try to flee the country.

The judge ordered the Chinese-American woman to be confined to her home, wear an electronic monitoring device with a global positioning system at all time, and only travel to the offices of her lawyers and to the courthouse.

Leung, 49, broke into a smile as the ruling was announced. Her attorney, Janet Levine, said outside court that her client was gratified.

``She will be home with her family and able to assist us in fighting her case,'' Levine said. ``She's going to stay home. She's not going anywhere.''

The government has alleged that Leung carried on a sexual relationship with FBI agent James J. Smith.

She is charged with obtaining classified documents from the briefcase of Smith and copying them with the intent of using them to benefit a foreign nation. A government brief said she could face 11 to 14 years in prison if convicted.

Smith, 59, is charged with fraud for allegedly filing false reports to FBI headquarters about Leung's reliability and with gross negligence for allegedly allowing her access to classified materials. He could be sentenced to as many as 40 years.

Both defendants have pleaded innocent.

Smith has retired from the FBI and is free on $250,000 bail. He attended Thursday's hearing.

Prosecutors and defense attorneys filed competing motions this week arguing whether Leung is a flight risk.

Prosecutors said government agents found documents in her home that showed 16 foreign bank accounts in various names.

They also said Leung, a naturalized U.S. citizen, has pledged her loyalty to China in a letter also found at her home to a Chinese government official seeking to invest in that country and saying she ``will never let my motherland down.''

Leung also has potential tax problems involving an alleged scheme to take mortgage interest deductions on her home when her company was the actual mortgage holder, according to prosecutors. They said the mansion where she lived with her family has just been sold for $1.8 million and is in escrow.

Leung's lawyers countered that she was actually a double agent working for the United States and has no intention of fleeing. They said she probably would not be accepted by the People's Republic of China if she tried to return there.

If she was somehow admitted to that country, she could be imprisoned or even put to death, they said.

(