© Reuters. FILE PHOTO: The logo of US conglomerate Basic Electric is pictured at the company’s website of its power branch in Belfort
By Sarah N. Lynch and David Shepardson
WASHINGTON (Reuters) – A former engineer and a Chinese businessman have been charged with financial espionage and conspiring to steal trade secrets from Basic Electric (NYSE:) Co to advantage China, according to an indictment unsealed by the U.S. Justice Division on Tuesday.
Xiaoqing Zheng, formerly an engineer at GE, was previously charged by the Justice Division in August in connection with the alleged theft.
The indictment unsealed on Tuesday against the former engineer and Chinese businessman Zhaoxi Zhang marks the very first time that the U.S. government has formally alleged that the scheme was carried out to advantage China, and that the Chinese government offered “monetary and other help.”
The 14-count indictment against the pair charges that Zheng, who worked at GE Energy & Water in Schenectady, New York, stole many electronic files containing facts about style models, engineering drawings and other specifications connected to the company’s gas and steam turbines.
Prosecutors say he emailed the files to Zhang, who was situated in China.
GE stated in a statement it has “been in close cooperation with the FBI and the U.S. Attorney’s Workplace for some time on this matter. At GE, we aggressively safeguard and defend our intellectual home and have strict processes in location for identifying these troubles and partnering with law enforcement.”
The two males allegedly utilized the stolen facts to advance their personal small business interests in two turbine analysis and improvement firms – Liaoning Tianyi Aviation Technologies Co Ltd and Nanjing Tianyi Avi Tech Co Ltd.
The indictment also says that Zheng and Zhang knew the trade secrets would advantage the People’s Republic of China.
The indictment adds that the pair received monetary and other help from the Chinese government by means of these two firms, and they coordinated with Chinese government officials.
Zheng and Zhang had been formally indicted on April 18.
Zheng was arraigned on Tuesday and pleaded not guilty. He was permitted to stay free of charge on bond. A jury trial has been set for June 24 in Albany, New York. Zhang was believed to be in China, the Justice Division stated.
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