Former GE Engineer and Chinese Businessman Charged with Economic Espionage and Theft of GE’s Trade Secrets

WASHINGTON – An indictment unsealed today charges Xiaoqing Zheng, age 56, of Niskayuna, New York, and Zhaoxi Zhang, age 47, of Liaoning Province, China, with economic espionage and conspiring to steal General Electric’s (GE’s) trade secrets surrounding turbine technologies, knowing and intending that those stolen trade secrets would be used to benefit the People’s Republic of China.

According to the 14-count indictment, Zheng, while employed at GE Power & Water in Schenectady, New York, as an engineer specializing in sealing technology, exploited his access to GE’s files 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 located 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 alleges that Zheng and Zhang conspired to commit economic espionage, as the thefts of GE’s trade secrets surrounding various turbine technologies 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 today in Albany before United States Magistrate Judge Christian F. Hummel, and released with conditions pending a trial before United States District Judge Mae A. D’Agostino.

The economic espionage counts (Counts One, Three, Four, Seven, Eight and Eleven) 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 (Counts Two, Five, Six, Nine, Ten, Twelve and Thirteen) 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.  Count Fourteen of the indictment, which charges Zheng with making false statements to the FBI during a voluntary interview, 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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