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Xu Zewei arrested in Italy last week at U.S. request

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U.S. wants him extradited, alleges he is part of group

tied to

Chinese government

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Xu's lawyer says he is victim of mistaken identity

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China denies involvement

(Updates story from July 8, adds comment from China's foreign

ministry in paragraphs 6-7)

By Kanishka Singh and Jasper Ward

WASHINGTON, July 8 (Reuters) - The U.S. Department of

Justice said on Tuesday a Chinese state-sponsored contract

hacker was arrested last week in Italy at the request of

Washington, but the arrested man claimed he is a victim of

mistaken identity.

Xu Zewei, 33, was arrested on July 3, the Justice Department

said, adding a nine-count indictment was unsealed on Tuesday in

the Southern District of Texas alleging the involvement of that

individual and a co-defendant in computer intrusions between

February 2020 and June 2021.

Xu was arrested in Milan, Italy, and will face extradition

proceedings, the DOJ said in a statement.

It alleged China's ministry of state security had directed

theft of COVID-19 research and the exploitation of Microsoft ( MSFT )

email software vulnerabilities.

The Chinese government has previously denied allegations of

being involved. Liu Pengyu, a spokesperson for China's embassy

in Washington, said on Tuesday China opposes all forms of cyber

crimes, adding that "China has neither the need nor the

intention to acquire vaccines through so-called theft."

Mao Ning, a spokesperson for China's foreign ministry, said

on Thursday that China opposed "the use of so-called cyber

issues to maliciously smear China" when asked about the case in

a regular press briefing.

China opposes the extradition of Chinese citizens through a

third country, Mao said, accusing the U.S. of "abusing long-arm

jurisdiction."

Xu's lawyer said on Tuesday that he is a victim of mistaken

identity, that his surname is quite common in China and that his

mobile phone had been stolen in 2020.

The 33-year-old IT manager at a Shanghai company appeared on

Tuesday before an appeals court in Milan, which will decide

whether to send him to the United States. The man was arrested

last week after he arrived at Milan's Malpensa airport for a

holiday in Italy with his wife.

U.S. authorities allege that he was part of a team of

hackers who in 2020 hacked and otherwise targeted U.S.-based

universities, immunologist, and virologists conducting research

into COVID-19 vaccines, treatment, and testing. The U.S. Justice

Department says a research university located in the Southern

District of Texas was also targeted.

The DOJ also says that in 2021, he was part of a

cyber-espionage group known as Hafnium, which has alleged ties

to the Chinese government and which "exploited zero-day

vulnerabilities in U.S. systems to steal additional research."

Hafnium targeted over 60,000 U.S. entities, according to the

DOJ.

The charges listed on the arrest warrant were wire fraud and

aggravated identity theft, conspiracy to commit wire fraud and

unauthorized access to protected computers.