JUSTICE DEPT. OFFICIALS AND THE FBI TELL "60 MINUTES" HOW THEY CAUGHT FORMER CIA OFFICER KEVIN MALLORY SPYING FOR THE CHINESE, THIS SUNDAY ON CBS

Video Catches Mallory Preparing Classified Material for Transmission to China

A Rare Look at China's Methods of Recruiting Americans and How U.S. Catches Them

Top National Security and Counterintelligence Officials Say Chinese Espionage Is Increasing and Poses a Greater Threat than Russian Espionage against the U.S.

U.S. national security and counterintelligence officials who investigated and convicted American spy Kevin Mallory tell Anderson Cooper how they caught the former CIA officer in the act of betraying his country for money. John Demers, who leads the Department of Justice's National Security Division, and Bill Evanina, the top counterintelligence official in the U.S. government, say China's spying efforts against the U.S. are vast in scope and scale. FBI Supervisory Special Agent Ryan Gaynor and prosecutor Jennifer Gellie, of the Department of Justice, speak about the Mallory case for the first time outside of court and show Cooper how Mallory was caught on tape and then lied about it to the CIA and FBI. Cooper's report will be broadcast on 60 MINUTES, Sunday, Dec. 23 (7:30-8:30 PM, ET/7:00-8:00 PM, PT) on the CBS Television Network.

Mallory, a down-on-his luck former CIA officer who once had a top-secret security clearance, is captured in the act on a FedEx store security camera, handing classified material to a clerk for scanning onto an SD card - the kind that can be inserted into a mobile phone. "So this is that rare moment in an... espionage case where we actually have video footage of the individual preparing the classified material for transmission to the foreign intelligence service," says Gaynor.

Gaynor and Gellie say Mallory sent national security secrets, including material that could have revealed the identity of a couple who had secretly spied on China for the U.S. to a Chinese spy on a covert communication device. Mallory had been the couple's handler years before and knew they were planning to travel to China. "These were documents that specifically talked about human beings whose lives could be in danger," says Gellie.

Mallory hadn't worked for any U.S. intelligence agency in five years when he was approached by a Chinese headhunter on LinkedIn. His profile listed expertise in national security, counterterrorism and military and said that he had once had security clearance. "He had the type of background the Chinese intelligence services are most interested in... and it led to what you would think," Ryan tells Cooper.

Prosecutors say the Chinese headhunter passed Mallory on to Michael Yang, who said he was a think-tank employee, but the FBI believes he is a Chinese intelligence officer. Yang paid Mallory $25,000 to travel to China twice to meet with him. Says Ryan: "We believe him to be a Chinese intelligence officer, and more importantly, Mr. Mallory when meeting with him believed him to be an intelligence officer."

Prosecutors say Mallory drew suspicion when he asked former CIA colleagues to put him in touch with people who had current intelligence on China. That behavior put him on CIA security's radar. He also used direct, incriminating language in his communications with the Chinese intelligence officer, referring to his pay and the risks he was taking.

Mallory was convicted in June and is awaiting sentencing. Demers says Mallory is just one of several cases they are prosecuting against former U.S. intelligence officers who are accused of spying for China. And China is not just looking for national security secrets. China's pursuit of American economic and industrial secrets has become America's biggest espionage threat. Evanina is the top counterintelligence official in the U.S. government and tells Cooper: "When it comes to espionage against the United States, China is the greatest threat, and it's not even close compared to Russia or Iran."

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