Former GE engineer arraigned on economic espionage, theft of trade secrets charges

Local

An indictment unsealed Tuesday charged Xiaoqing Zheng, 56, of Niskayuna, and Zhaoxi Zhang, 47, of Liaoning Province, China, with economic espionage and conspiring to steal General Electric’s trade secrets.

The indictement accused the pair intended for the stolen trade secrets, concerning turbine technologies, would be used to benefit the People’s Republic of China.

According to the 14-count indictment, Zheng exploited his position as an engineer at GE Power & Water by stealing multiple electronic files including proprietary files involving design models, engineering drawings, configuration files, and material specifications having to do with various components and testing systems associated with GE gas and steam turbines.

Zheng e-mailed and transferred many of the stolen GE files to his business partner, Chinese businessman Zhaoxi Zhang, who was in China.

Zheng and Zhang used the stolen GE trade secrets to advance their own business interests in two Chinese companies, Liaoning Tianyi Aviation Technology Co., Ltd. (LTAT) and Nanjing Tianyi Avi Tech Co. Ltd. (NTAT), companies that research, develop, and manufacture parts for turbines.

The indictment also alleged that the pair conspired to commit economic espionage, as the thefts of GE’s trade secrets were done knowing and intending that the thefts would benefit the People’s Republic of China and one or more foreign instrumentalities, including LTAT, NTAT, Shenyang Aerospace University, Shenyang Aeroengine Research Institute, and Huaihai Institute of Technology.

The defendants, through LTAT and NTAT, received financial and other support from the Chinese government and coordinated with Chinese government officials to enter into research agreements with Chinese state-owned institutions to develop turbine technologies.

Zheng was arraigned Tuesday in federal court in Albany.

The economic espionage counts carry a maximum sentence of 15 years in prison, a fine of up to $5,000,000, and a term of supervised release of up to three years.

The trade secrets theft counts carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to three years.

The indictment also charged Zheng with making false statements to the FBI during a voluntary interview, which carries a maximum sentence of 5 years in prison, a fine of up to $250,000, and a term of supervised release of up to three years.

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