Former Ford Motor engineer pleads guilty to stealing trade secrets

A former Ford Motor Company product engineer, who has pleaded guilty to two counts of stealing trade secrets in a federal court, is likely to face six years prison term.

Xiang Dong Yu, also known as Mike Yu, of Beijing, China, is expected to be sentenced on February 23, 2011, in Detroit court. According to his plea agreement, Yu, 49, would face a prison term of anywhere between 63-78 months based on an agreed loss amount of more than $50 million and less than $100 million. He may also be asked to pay up a fine of up to $150,000.

As per the plea agreement, Yu will also be deported from the United States after completing any term of incarceration.

Yu was a product engineer for Ford from 1997 to 2007 and had access to Ford trade secrets, including its design documents.

In December 2006, Yu accepted a job at the China branch of a U.S. company. However, Yu did not inform Ford about his new job and on the eve of his departure from Ford, he copied some 4,000 Ford documents onto an external hard drive, including sensitive Ford design documents such as system design specifications for the engine/transmission mounting subsystem, electrical distribution system, electric power supply, and electrical subsystem and generic body module.

According to the plea agreement, the majority of the design documents copied by Yu did not relate to his work at Ford. On December 20, 2006, Yu traveled to the location of his new employer in Shenzhen, China, taking the Ford trade secrets with him and on January 2, 2007, he informed Ford via email that he was leaving Ford’s employment.

In November 2008, the defendant began working for Beijing Automotive Company, a direct competitor of Ford, the plea agreement said.

On October 19, 2009, Yu returned to the U.S. flying from China to Chicago and he was promptly arrested on a warrant issued upon the indictment in this case. At the time of his arrest Yu had in his possession his Beijing Automotive Company work computer and the FBI discovered that 41 Ford system design specifications documents had been copied on that computer. The FBI also discovered that each of those design documents had been accessed by the defendant during the time of his employment with Beijing Automotive Company.

We will vigilantly protect the intellectual property of our U.S. automakers, who invest millions of dollars and decades of time in research and development to compete in a global economy, said Barbara L. McQuade, United States Attorney for the Eastern District of Michigan. Those who do not play by the rules will be brought to justice.

Theft of trade secrets is a threat to national security and investigating allegations involving theft of trade secrets is a priority for the FBI. The FBI will continue to aggressively pursue these cases, FBI Special Agent in Charge Andrew G. Arena said.