US Charges Chinese Man, A Former IBM Employee, With ‘Economic Espionage’

A Chinese national has been charged by the U.S. Department of Justice (DOJ) on six counts of “economic espionage and theft of trade secrets,” over six months after he was first arrested by the FBI. Xu Jiaqiang has been accused of stealing “proprietary source code” of software “from his former employer, with the intent to benefit the National Health and Family Planning Commission of the People’s Republic of China.”

U.S. Attorney Preet Bharara of the Southern District of New York said in a statement Tuesday: “As alleged, Xu Jiaqiang is charged with stealing valuable, proprietary software from his former employer, an American company, that he intended to share with an agency within the Chinese government.”

In the same statement, available on the DOJ website, Assistant Attorney General for National Security John P. Carlin said: “Those who steal America’s trade secrets for the benefit of foreign nations pose a threat to our economic and national security interests.”

The DOJ has not identified the U.S. company Xu worked for, but it has been widely reported that IBM was Xu’s former employer. On its website, IBM lists a Xu Jiaqiang as a developer and there is also a LinkedIn profile of a Xu Jiaqiang employed with IBM for the same dates as mentioned in the DOJ statement, but International Business Times could not verify if it is the same person.

According to the DOJ, Xu worked for the unidentified company as a developer from November 2010 to May 2014, when he resigned. Subsequently, two undercover law enforcement agents were in communication with Xu, who provided them with software that was confirmed by the victim company’s employees to contain or be based on the company’s proprietary software.

In December 2015, Xu met with the two undercover FBI agents at a hotel in White Plains, New York. During the meeting, he told the agents he knew the software was property of his former employer, and that he had taken steps to prevent the detection of the software’s origins. On the same day, Xu was arrested by the FBI and initially charged with one count of theft of trade secrets.

The current “superseding indictment charges Xu with three counts of economic espionage, which each carry a maximum sentence of 15 years in prison. He was also charged with three counts of theft of a trade secret, which each carry a maximum sentence of 10 years in prison,” the DOJ said.

Xu will be arraigned before U.S. District Judge Kenneth M. Karas of the Southern District of New York at noon EDT on Thursday.