US federal prosecutors said on Tuesday (March 19) that two men were accused of using stolen trade secrets from electric car maker Tesla to do business in China and of conspiring to sell the stolen technology to undercover law enforcement officers.
Prosecutors said a 58-year-old Canadian citizen living in Ningbo, China, was arrested while traveling to Long Island to meet with an undercover agent posing as a businessperson. According to media reports, the other business partner who was also charged is still at large.
Why was he arrested?
Prosecutors said the man and his partner used the trade secrets of “a leading US-based electric vehicle company” to start their own business.
The prosecutors did not disclose the name of the US company, but said the company acquired a battery assembly line manufacturing company in Canada in 2019, and the two men had previously been employed by the Canadian company. Tesla subsequently became the sole owner of this technology.
This description coincides with Tesla’s acquisition of Hibar Systems, a battery manufacturing company in Richmond Hill, Ontario, Canada, in 2019.
In the US, a conviction on the charge of “conspiracy to transmit trade secrets” can carry a maximum sentence of 10 years in prison.
Breon Peace, the federal prosecutor in the Eastern District of New York, said in a statement with US Department of Justice and FBI officials, “The two defendants established a company in China and blatantly stole the trade secrets of the US company and sold products developed with the stolen trade secrets. These trade secrets are essential for the manufacture of electric vehicles and cost millions of dollars to develop.”
