China Resident Sentenced to 24 Months for Conspiring to Send a U.S. EV Company's Trade Secrets to an Undercover Agent
The U.S. Department of Justice announced on December 16 that Klaus Pflugbeil, 59, a citizen of Canada and Germany residing in Ningbo, China, was sentenced by Judge Joan M. Azrack in federal court in Central Islip, in Suffolk County, New York, to 24 months in prison for conspiring to send trade secrets belonging to a leading U.S.-based electric vehicle company. The Justice Department said he made over $1.3 million on the stolen trade secrets; his co-defendant, Yilong Shao, remains at large. Pflugbeil pleaded guilty in June 2024.
According to the Justice Department, the victim company acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly lines in 2019, and both Pflugbeil and Shao are former employees of that Canadian manufacturer. By no later than 2019, the two planned to use the victim company's trade secrets for their own business: Pflugbeil told Shao he had "a lot of original documents," and Shao confirmed that "we have all of original assembly drawings by PDF." To obfuscate the theft, Pflugbeil wrote of one document he created that it was "in a different format, so it looks very original and not like a copy."
In or about July 2020, Pflugbeil joined the company Shao had previously established, which has since expanded to locations in China, Canada, Germany and Brazil, making the same precision dispensing pumps and battery assembly lines the Canadian manufacturer developed and marketing itself as an alternative source for the victim company's products, with advertisements on Google, YouTube and LinkedIn shown tens of thousands of times in any given week.
On September 11, 2023, undercover FBI agents posing as businesspeople interested in buying a battery assembly line for a facility on Long Island, New York, attended a packaging and processing trade show in Las Vegas, Nevada, and were introduced to Shao and later to Pflugbeil by email. On or about November 17, 2023, Pflugbeil sent a detailed 66-page technical documentation proposal to an undercover agent; at least half a dozen drawings in it were in fact the victim company's battery assembly trade secret information, and the proposal quoted the battery assembly line at over $15 million.
The sentencing was announced by Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General for National Security, and James E. Dennehy, Assistant Director in Charge of the FBI's New York Field Office. Peace said the defendant built a business in China to sell sensitive technology belonging to a U.S. company, believing incorrectly that he was outside the reach of U.S. prosecutors. The case, docket number 24-CR-238, was coordinated through the Justice and Commerce Departments' Disruptive Technology Strike Force.
Source: U.S. Department of Justice
Published by GSM · USA (original Chinese edition)
Photo: 图：位于纽约州苏福克县 Central Islip 的 Alfonse M. D'Amato 联邦法院大楼，本案在此宣判。Americasroof 摄，CC BY-SA 3.0，经 Wikimedia Commons。 / Photo: The Alfonse M. D'Amato United States Courthouse in Central Islip, Suffolk County, New York, where the sentence was imposed. Photo by Americasroof, CC BY-SA 3.0, via Wikimedia Commons.
