Chinese American scientist Sherry Chen, who was wrongfully arrested and fired due to baseless spying claims eight years ago, won a $1.8 million settlement from the US Commerce Department on Wednesday.

Chen, a hydrologist with the National Oceanic and Atmospheric Administration under the National Weather Service, was publicly arrested in front of her colleagues in 2014 for allegedly stealing sensitive information from a database for the nation's dams and lying about the breach.

The lack of evidence led the Justice Department to drop its charges against Chen in March 2015. But her employer still terminated her employment in March 2016 for the same reason in the federal case.

Chen filed a wrongful termination grievance to the Merit Systems Protection Board, which oversees employment cases involving federal employees. A federal administrative judge ruled in April 2018 that Chen's termination was unlawful and she had been the victim of a "gross injustice".

The judge also ordered the US Commerce Department to resume her employment at the National Weather Service and pay her back pay plus benefits. However, she remains on indefinite leave to this day.

In 2019 Chen filed a civil suit against the US government for malicious prosecution and false arrest.

The settlement - $550,000 from the Commerce Department and an annuity from the government valued at $1.25 million over 10 years – marks the end of the lawsuit.

"The government's investigation and prosecution of me was discriminatory and unjustified," said Chen in a statement. "The Commerce Department is finally being held responsible for its wrongdoing and for the conduct of its illegal security unit, which has had a devastating impact on my life and the lives of so many other federal employees. No one else should have to endure this injustice."

"Ms Chen's historic settlement is a victory for her and for Chinese American communities," said Ashley Gorski, senior staff attorney with the American Civil Liberties Union, co-counsel of Chen's case. "It makes clear that profiling and discrimination are unacceptable, and that the government will be held to account," she said in a statement.

In fact, Chen's ordeal started 10 years ago, when the Commerce Department's internal security unit, known as the Investigations and Threat Management Service (ITMS), began unlawfully investigating her as part of a broad pattern of discrimination directed at Chinese Americans.

The ITMS was officially disbanded last year, following a Senate report detailing how the unit had become a "rogue, unaccountable police force" that operated outside the law and "opened frivolous investigations on a variety of employees without evidence suggesting wrongdoing".

While Chen finally received some justice, another professor Xiaoxing Xi is still fighting back to hold the government accountable for the damage caused to him and his family.

Xi, a physics professor at Temple University, was arrested in front of his family in May 2015 on a charge of economic espionage. By September 2015, the Department of Justice dropped the charge for lack of evidence.

Xi initially sued the lead FBI agent in 2017 for his wrongful arrest. The lower courts dismissed his case last year. He brought the case to an appeals court in September in hopes of reinstating the lawsuit. The appeals court has yet to make a decision.

Both Chen and Xi are early instances of a series of prosecutions in which the US government has wrongly profiled Chinese American scientists.

China Initiative, a program launched by former President Donald Trump in 2018, had disproportionately targeted researchers for having ties to China. However, the espionage charges mostly ended up with disclosure or academic integrity issues.

The administration of President Joe Biden dropped the name of the program in February amid accusations that the program criminalized paperwork errors and spread anti-Asian sentiment. But prosecutions continue against Chinese researchers and experts said the chilling effect still affects academia.

Chen said she still struggled to sleep through night and her emotional well-being suffered from the trauma inflicted by the government.

Xi told a recent webinar that he was a respected researcher and department chair and enjoyed family time like any ordinary American but overnight his life was upended.

His ordeal drives him to seek accountability from the government. "If we are not able to hold the government accountable, they're going to do more of this," he said.