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GE engineer tied to China charged with theft of company secrets

FBI says technology stolen for use in foreign commerce

The FBI is currently investigating Xiaoqing Zheng for alleged theft of GE trade secrets.   © Reuters

NEW YORK -- A General Electric engineer in New York state with ties to businesses in China was arrested on Wednesday for allegedly stealing trade secrets related to GE turbine technology, according to the U.S. Department of Justice.

Xiaoqing Zheng, an American citizen believed to also hold Chinese citizenship, is accused of using a technique called steganography to conceal the GE data inside the binary code of an innocuous-looking "digital picture of a sunset" that he then sent to his personal email address.

He told FBI agents on Wednesday that he owns or works for companies in China that work on the same technologies that he does for GE, according to an agent's affidavit posted online by Schenectady newspaper The Daily Gazette. These businesses are not yet profitable but have received grant money or funding from the Chinese government, the affidavit quoted Zheng as saying.

Zheng allegedly acknowledged stealing GE data on multiple occasions. Though the affidavit's primary focus is on an incident dated July 5, he is also believed to have copied more than 19,000 files from a GE-issued computer to an external storage device in 2014.

The FBI agent behind the affidavit, M.D. McDonald, wrote that there is probable cause to believe that Zheng acted on July 5 knowingly "with the intent to convert a trade secret that is related to a product and service used in and intended for use in interstate and foreign commerce."

During a federal search of Zheng's home in Niskayuna, New York, FBI agents found and confiscated a handbook detailing resources the Chinese government will give to individuals or entities for the provision of certain technologies. Agents also found five trips to China over the past two years on Zheng's passport, the affidavit said.

"We have been in close cooperation with the FBI for some time on this matter," a GE spokesperson said in a statement to the Nikkei Asian Review. "At GE, we aggressively protect and defend our Intellectual Property and have strict processes in place for identifying these issues and partnering with law enforcement." The company declined to comment further on the ongoing investigation.

At a Thursday hearing, bond was set at $100,000 for Zheng's release, the Times Union reported. "This is not state secrets," his attorney, Kevin A. Luibrand, was quoted as saying by the Albany newspaper. "This is not espionage. ... GE fully knew that he had another business." The copied data was programs of patented information Zheng had created, Luibrand said.

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