The most significant part of the indictment is that this is the first time that the United States has tied these economic and intellectual property thefts to the Chinese government.
In a significant development, as per an indictment unsealed by the U.S. Justice Department, a Chinese businessman as well as a former engineer working at General Electric Co, have been charged with economic espionage and conspiring to steal trade secrets from GE in order to benefit China.
The indictment against the former GE engineer, Xiaoqing Zheng, and Chinese businessman Zhaoxi Zhang, comes in the wake of Zheng being charged with the alleged theft in August 2018.
The development assumes significance since it is the first time that the U.S. government has formally stated that the scheme was carried out to benefit China and that the Chinese government provided “financial and other support.”
As per the indictment, Zheng stole proprietary data related to GE’s turbine technology by encrypting the files on his computer and secretly embedding them into a digital photograph of a sunset before emailing the photograph to his personal email.
Zheng, 56, has pleaded not guilty on and has been allowed to remain free on bond.
Kevin Luibrand, his attorney, declined comment.
This is not the only such case in the United States
Since 2018, the Justice Department has vowed to fight Chinese theft of U.S. corporate secrets, intellectual property thefts, illegal corporate subsidies and the usage of rules that hamper U.S. companies to sell their wares in China.
According to the FBI, since 2018 nearly every one of its 56 field offices in the country has investigations into economic espionage tied to China.
According to the 14-count indictment, Zheng, who worked at GE Power & Water in Schenectady, New York, stole multiple electronic files containing details on design models, engineering drawings and other specifications related to the company’s gas and steam turbines. Having done so he emailed the files to Zhang who was located in China.
In a statement GE said, it has “been in close cooperation with the FBI and the U.S. Attorney’s Office for some time on this matter.”
The two men allegedly used the stolen information to advance their own business interests in two turbine research and development companies – Liaoning Tianyi Aviation Technology Co Ltd and Nanjing Tianyi Avi Tech Co Ltd.
The indictment also states, the pair received financial and other support from the Chinese government through those two companies; it also states that the two coordinated with Chinese government officials.
In August 2018, in interviews with the FBI, Zheng admitted to taking GE files. He also told agents his companies in China had received grant money from the Chinese government, said prosecutors.
Zheng and Zhang, 46, were formally indicted on April 18, 2019.
A jury trial has been set for June 24 in Albany, New York.
Zhang was believed to be in China, said the Justice Department.